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Monthly Archives

August 2015

Aug 05
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How To Review Your Life Insurance Policy

By Life and Health

Whether you recently bought a life insurance policy or have had one for several years, now’s the time to review it. Make sure you have adequate coverage and know exactly what’s covered.

Understand the Summary

Your paper policy or online life insurance account will include a one-page summary that outlines the type, amount and coverage your policy offers. Look at it and make sure you understand each line. If you don’t, contact your insurance agent for an explanation.

Verify the Death Benefit or Cash Value

Because life circumstances change, verify that the death benefit is adequate. You might need to increase coverage, and now’s a good time to do that.

You’ll also want to verify the accuracy of the policy’s cash value. Also, understand how it’s calculated as you prepare for the future.

Check the Term

Let’s say you bought your 15-year term life insurance policy five years ago when your kids were young. Now, though, your family has grown or your health has changed, and you need a longer term. Use this review to make sure the policy’s term is long enough for your needs.

Read the Restrictions

Does your policy require a waiting period before benefits can be paid or must you undergo an annual health exam? Know the restrictions to reduce surprises, ensure you’re following the guidelines and not inadvertently doing something to void the policy.

Drop or Add Riders

Spousal benefits and a premium waiver if you become disabled are two of several life insurance riders. Update the riders on your policy and drop or add them as needed.

Change the Beneficiaries

Has your life insurance policy beneficiary changed? If so, update the policy to ensure the right person gets the money from your policy.

Reviewing your life insurance policy should be something you do at least once a year. This task ensures your policy is current and accurate. For help meeting your life insurance needs, talk to your agent today.

Aug 05
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Is Your Business At Risk of a Data Breach?

By Risk Management Bulletin

303 entyty (1)Data breaches are reported daily and are an increasing concern for businesses that collect and store personal information from clients. However, it isn’t just large retailers and credit card companies that are at risk, so are small to medium size businesses. Even more concerning is that smaller businesses typically don’t have the controls or technology in place to properly protect data. All employers should know their risk for a data breach, how to prevent one and what to do if one occurs.

Types of Data at Risk
Many businesses are at risk of a breach simply by the activities that they perform. Businesses that sell items or services on their website can easily be hacked. Storing personal information for employees or clients either in unlocked filing cabinets, or on laptops or tablets that may be stolen is another risk factor. Even businesses that use cloud storage capabilities are at risk of attack. The type of information that is most at risk of being stolen are user account numbers, social security numbers, drivers license numbers, credit card numbers, bank routing numbers and any type of password protected account information. Names, addresses and phone numbers are typically not hacked and businesses are not legally responsible if this information is stolen.

Stop Breaches
Businesses are required to protect personal data no matter where it resides, which requires a multi-prong approach. First, businesses must invest in the latest security features for all software and hardware that it uses. This includes mobile devices such as smart phones and tablets. Additionally, employees who have access to personal information must be thoroughly trained on the proper handling of both the data itself and the systems on which it resides.

Responding to Data Breaches
47 U.S. states have laws requiring businesses to contact individuals if their data is accessed or stolen during a breach. The laws in your state will define what constitutes a breach, who must be contacted in case of a breach and how they must be contacted. It’s also a good idea for businesses at high risk of a data breach to purchase cyber insurance to protect against financial losses.

Aug 05
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Hiring Hazards to Avoid

By Risk Management Bulletin

job-interview (1)Maintaining adequate staffing levels at a business inevitably means that employers must go through the interviewing and hiring process. While many employers, especially small business owners, rely mainly on intuition to select the right employee, there is far more to the process. In fact, in today’s litigious society, there are some strict rules to abide by when it comes to interviewing potential candidates. Here are the hazards to avoid during the hiring process that will avoid placing your business in legal hot water.

Avoid Focusing on Personal Issues
Legally, an employer is not allowed to obtain personal information about an applicant in order to determine if they are fit for a position. For example, it is illegal to ask a candidate, “How long do you expect to live in the area?” Additionally, it is illegal for an employer to consider personal information that the candidate volunteers. If the employer asks the candidate to “Tell me about yourself” and the candidate reveals personal details, the employer cannot legally use the information as a basis for hiring or not hiring. Instead, employers should phrase the question as, “Tell me about your previous professional accomplishments”

Interview Questions Must be Consistent
Sometimes hiring biases creep into interview questions even when employers don’t mean for them too. For this reason, it’s important to develop a set list of questions before interviewing starts and to ask only those questions to each candidate. Questions must revolve around how the candidate would perform the job they are interviewing for and how they have performed in previous positions. Avoid asking off-the-cuff questions even when a good rapport is established with an interviewee.

Reference Checks
Interviews are only one step of the hiring process. Thorough reference checks are another vital component to hiring the right individual. First, verify that the reference can actually provide you with relevant information. Many candidates use friends who don’t have real insight into their work habits. Next, ask open-ended questions such as, “Why did the candidate leave your organization? These will solicit a more detailed response than simple yes or no questions.

Aug 05
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Legalized Marijuana and Your Business: What You Need to Know

By Risk Management Bulletin

legalThe rapidly changing landscape of legal marijuana use has caused confusion among employers who have a strict no-drug policy in their workforces. After all, the burden is on the employer to provide a safe workplace for the other employees as well as for clients. How are they to do this when states make medical marijuana use legal and some sates even allow its recreational use? First, employers should realize that they are not obligated to allow drug use of any type while an individual is on the clock or at your workplace. However, beyond that, they laws get cloudy. Here are some legal guidelines to help employers navigate the tricky world of marijuana in the workplace.

Drug Testing
When regards to drug testing, employers in states where marijuana is legal have an additional burden. A positive drug test by an employee is typically not enough to take corrective action. Instead, employers must document additional criteria proving that the employee used marijuana while performing their job. As more and more states legalize marijuana use, companies may move away from random drug testing and toward random impairment testing. This would involve testing designed to determine if an employee is fit to perform their job or if some level of drug impairment exists at a given time.

No Tolerance Rules
Employers who have a strict “no drug” policy have nothing to worry about. They still have the ability to discipline or terminate employees who are caught with marijuana on them while at work or who display obvious signs of impairment due to drug use at work. Additionally, court cases thus far have ruled on the side of employers. Judges have consistently ruled that using legal marijuana protects individuals only from legal repercussions not from employer actions.

Hiring
Hiring is another tricky area. Employers who operate in Arizona, Connecticut, Delaware, Maine and Rhode Island are not allowed to disqualify job applicants simply because they use marijuana for medical purposes. However, companies can and should provide applicants who disclose this information with a detailed company drug policy explaining the actions taken if they use marijuana while on the job.

Aug 05
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Chemical Hazard Risks for Employees

By Risk Management Bulletin

Chemicals are abundant in most workplaces, and even those that don’t use or store hazardous chemicals still represent a risk to employees. Even common cleaning supplies can pose a threat if used incorrectly. In fact, 32 million people are injured each year from chemical hazards in the workplace. For this reason, employers must remain vigilant for chemical hazards. Proper storage, labeling and training of employees will help to ensure that workers aren’t injured on the job.

Known Hazardous Chemicals
Workplaces that store, use or transport known hazardous materials must develop a HazCom program by law. The plan must be in writing and available to all employees at all times. It should include a list of all known chemicals, a description of their labeling, how to safely handle these chemicals and emergency contact information.

Common Chemicals Also Pose Risks
One of the easiest ways to prevent injuries from common chemicals is to ensure that all items are properly labeled. Never pour chemicals, such as cleaners, into empty bottles that have other labeling on them. In addition, workplaces that mix their own cleaning solutions should permanently label bottles and dispensers in a font that is easy to read. If the workplace has employees who are not native English speakers, label chemicals in additional languages as well.

Combustibles
Another chemical hazard in the workplace is from combustible chemicals. These are chemicals of any hazard level that are likely to ignite when they encounter a heat source. Many workplace accidents occur when employees store combustible chemicals too close to radiators, heating vents, space heaters or other heat sources. Proper training of employees to never store anything near heat sources will typically prevent accidents like this from occurring.

Employee Training
Employees should be trained in several areas to ensure their safety around chemicals. First, adequate safety gear such as gloves and eye protection must be provided by the employer. Employees must them be trained on how to wear the gear properly and when to wear it. Employees must also be trained on the proper procedures to take if they are exposed to harmful chemicals. This includes flushing the eyes or skin with water and contacting emergency medical professionals.

Aug 05
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Document Your Safety Program-Insurance companies love it

By Business Protection Bulletin

 

Document, in this case, is a verb, it’s action; not a noun, like a few pages clipped together in a drawer.

Man with pen and questionnaire. 3d

Insurance companies receive snapshots of your business. The application, the loss control survey, the claim report, all the moments captured in time; and then the insurance company sets a price to reflect the motion picture that is your business.

Arguably, your credit report tells your story over time. Underwriters consider this an important document for that reason. The past behavior over time predicts the future.
You need to build a safety program(credit report). This report requires documentation.

A written safety plan requires thoughtful reflection on your company values; it answers the question: where does worker safety and liability avoidance rank among your priorities? The written document shows a commitment to safety, the standard operating procedures for a safe work environment.

Safety meeting minutes demonstrate that you hold meetings, that workers attend, the subject matter covered, and rules or procedures implemented.

Injury investigations show your commitment to understanding how an injury occurred and how to avoid the same injury in the future.

The documented plan shows safety program evolution over time. Management has a standard of safety, and manages towards that goal.

Some of the reports which demonstrate your safety culture:
1. All required government paperwork completed, up to date, and organized.
2. Employee safety meetings with updated standard operating procedures.
3. Written and posted evacuation plans, documented fire drills.
4. Contracts to inspect and update fire safety equipment.
5. Vehicle maintenance schedules and logs.
6. Equipment maintenance schedules and logs.
7. Driver documentation with annual physicals and driving records.
8. Quality control and assurance documents for products or completed operations.

These reports put motion to those insurance company snapshots. They show process. Insurance companies reward this behavior with lower premiums. Document your safety culture.

Aug 05
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Inland Flooding and Severe Weather

By Business Protection Bulletin

Inland flooding represents twenty percent of all flood claims.
Much of this statistic is due to development. More area is impervious pavement, so storm water flows as sheet runoff to the next site or the nearest creek. The creeks and rivers collect water much faster than natural flow and the banks overflow more often as a result. Floods occur naturally inland too in just relatively low areas.

Look at the area surrounding your location. Is there any more room for potential development up-gradient from your site? Check for a mile or so. If so, it’s a good idea to look into flood insurance.

Because flooding is less likely, premiums will not be excessive. But, flooding must be written well ahead of predicted flood events.

Flood insurance is written as a building value or a contents value. You can mitigate some flood damage by storing vulnerable goods off the floor.

Hurricanes have forced inland and more northerly in the last few years. Landfall can be anywhere on the east or Gulf coast. The volume of rain carried by hurricanes devastates unprepared communities. Low lying areas receive the majority of the storm water, and it comes fast.

Richmond, Virginia suffered a massive storm impact when one flood came down the James River, which the flood walls repelled. But, a second large storm drenched the land side of the same walls. So flood walls held the storm in. Of course, this two-storm system is rare and impossible to plan prevention.

The lesson learned is to apply the risk management techniques of risk transfer. Figure the largest loss a flood can cause. Remember, you may not be able to get to your property to move goods before the storm.

Investigate flood insurance. It does take time to implement a program, and it must be in place prior to storm warnings. Do not procrastinate.

Aug 05
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Motor Vehicle Reports (MVRs)

By Business Protection Bulletin

MVR (1)Think about MVRs like investigative journalism, the five Ws, who, what, when, where, why.

Who should order the MVRs for employees or potential drivers? On whom should you pull the records?

The fleet manager or operations manager needs a standard operating procedure to request permission from the driver or potential hire. Yes, obtain written permission. Every driver and every new hire should be screened by their driving record. The driving record is like their credit rating. It may not be a perfect mirror of their habits, but it is a good general indicator.

The standard procedure needs to include a maximum number of violations and accidents. Perhaps one moving violation within a year, two in four years and no at-fault accidents make a good hard rule. Major violations should be defined and held to zero tolerance. Be vigilant and consistent. You cannot discriminate in this area without inviting employee practice litigation.

The MVRs should be reviewed every six months for current employees, and before employment begins for potential new hires. Again, consistency. Why six months? Driving habits change with personal issues. Your driver may not be concentrating, perhaps they’re on the phone or texting for pressing personal reasons. You want to ban all phone or texting while driving, and intervene with a slipping driver early.

Review the record in privacy with the employee. Pats on the back or some small reward for the good records, intervention for the ones with some issues.

Driving on public roads may be the biggest exposure to risk many companies face. Certainly the greatest chance of a catastrophic claim is vehicle use for most. Trust this risk to drivers with quality habits, sound judgment, and consistent results.

Driver recruitment and retention is the cornerstone to a great risk management program for your fleet. Support these drivers with a maintenance program and up-dated fleet. Make life easier for your drivers and retaining them will follow.

Aug 05
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Combined Umbrellas

By Business Protection Bulletin

umbrella-2What happens to your assets when the liability limits are exceeded? If you have a liability left, your own assets cover the difference. These assets include your ownership in a closely held corporation.

Your co-owners probably don’t want your accident victim who just sued you as a partner.

Proper risk management identifies all exposures to loss. One often overlooked issue is loss of ownership control due to personal liability.

Co-owners often consider divorce scenarios or the death of a shareholder. Life insurance resolves the death issue. First right to purchase will generally resolve divorce cases. Once assets are placed into bankruptcy, however, buyout options will become more difficult to execute.

If the liability issue takes years to resolve, that ownership share may be in limbo for the duration.

Avoid this risk by requiring all shareholders to carry some high minimum limits of personal liability. It’s the responsible approach to ownership.

One way to accomplish this is the combined personal and business umbrella policy. Endorse the umbrella to include shareholders.

This endorsement will require high underlying limits of liability on homeowners-policies and personal automobile.

This endorsement is not offered by every umbrella carrier or in every state. But ask your insurance agent about the option.

The important outcome ties personal liability management to the right to own a piece of a closely held corporate entity or partnership. Fate should not choose the next shareholder.

Use an independent service to review all partners personal risk management situation. Assure adequate limits are in place including truly disastrous scenarios. Add layers of umbrella as needed or endorse the company policy.

Having trouble thinking of possible liability losses for your partner?
1. The daughter, son, foreign exchange student grabs the family car and goes on a drunken joyride.
2. The spouse slanders a local business rival.
3. Your personal computer is hacked and some employee personal information is backed up on the memory stick attached.

Most of the scenarios you cannot think of are the better reasons to manage the owners personal risks.

Aug 05
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Defective Construction Claims and Commercial General Liability

By Construction Insurance Bulletin

Although frequently contested as exclusions, defective construction claims are being scrutinized by the courts using various legal theories.

Traditionally, poor workmanship did not fall under the definition of an occurrence. Poor workmanship is a business risk, poor hiring.

The rules have begun to slide towards coverage now if non-defective materials or installations are damaged as a result of faulty workmanship. In other words, a ceiling collapses onto a newly installed sink and tub, chipping the marble. The tub and sink would be covered, but the ceiling would not. This rule is analogous to a frozen pipe. The damage to the pipe is not covered, but the ensuing water damage is.

In 2013, the Connecticut court found that defective workmanship was not intentional, and therefore could constitute an occurrence. In the same ruling, the court stated that the defect itself would not be covered, but ensuing damage would be.

Since 2013, other courts have broadened the definition of occurrence by ruling the “your work” wording excluded the work of subcontractors. So a subcontractors defective work would be covered as property damage under the prime’s CGL.

With the broadening of coverage for customers complaints, the contractors pick up valuable cost savings – legal representation. If defective workmanship is a covered property damage, then the contractor is entitled to defense from the insurance company.

As the courts broaden these definitions, you can expect consumers to try to broaden the definition of “defective”. Is inadequate soundproofing between walls a defect or a design flaw? What are the subjects of potential defects? Actual installation or functionality?

Of course, no contractor wants the reputation for or problems associated with defective workmanship. Where does design meet implementation to arrive at function? As the definition broadens, contractors will be held more liable. Check the wording of your commercial general liability defective workmanship clause. How broadly could it be interpreted? Ask your professional agent for some expertise in this area.

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