Commercial Insurance Tips

Fine Arts Insurance

Fine Arts insurance provides protection against sources of direct physical loss or damage, except for the sources of loss that are specifically excluded. Items that are eligible for coverage include the following:

antique furniture

etchings

art glass windows

pictures

tapestries

marbles

ornamental rugs

statuary

rare books

paintings

bronzes

antique silver

manuscripts

porcelains

rare glass

Fine Arts insurance protects privately owned articles, private collections belong to individuals, firms, corporations, and associations, auction rooms, museums, art galleries, or art institutions ordinarily open to the public. Universities, colleges, schools, and hotels are considered to be private collection risks.

Insurance covers property while it is located in the United States and Canada and protection usually extends to exhibited property (excluding the premises of fair grounds or of any national or international exposition).

Fine Arts policies usually include a schedule (area for describing property) containing the following information:
property class,
detailed property description,
insurance limit,
list of property locations, and
appraised value.

Fine Arts insurance does not cover:

Wear and tear, gradual deterioration, insects, vermin, or inherent vice
Damage caused by exposure to harmful levels of light, humidity or temperatures.
Damage caused by any repairing, restoration, or retouching process,
Damage caused by an electronic or mechanical fault or breakdown.
Breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains, and similar fragile articles
loss or damage to property while it is either in or on an unattended vehicle.

Because of the nature of fine art and the special exposure to loss they represent, there are a number of conditions that must be met such as:

The insured agreeing to use professionals to pack and/or move their property
The insurance will not be extended to protect other parties (such as professional movers) who should have their own source of insurance
The insured agreeing to special claims handling for articles that belong to a pair or set.

Documenting property value is important. It is the only way to secure the right amount of coverage. Documents such as bills of sale, receipts, or appraisals are often required. If an appraisal isn’t provided, an insurance company may reject the request for coverage, or offer limited protection (such as a flat dollar amount or taking a discount for appreciation).

If you are not sure about how adequately your prized possessions are protected, discuss the matter with an insurance professional.

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The Businessowners Policy

If you own and/or run a smaller business, your insurance needs may be properly handled by a businessowner policy (BOP). A BOP is a single form that offers both property and liability protection. Retailers, wholesalers, small contractors, artisan contractors, dry cleaners, restaurants, offices and convenience stores (including those with gas pumps) are eligible for BOP coverage. All such operations may be insured by a BOP as long as they do not exceed the square foot or annual sales limits established for the program. Cooking operations, due to the higher fire and other accident exposures, have significantly more restrictive guidelines.

Property Coverage – BOPs protect buildings as well as the following:

Building additions (completed or being built)

Indoor and outdoor fixtures

Clothes Dryers

Machinery and equipment

Landlord furnishings,

Mowers, ladder, snow blowers, and similar maintenance property

Outdoor furniture

Floor coverings

Refrigerating appliances

Ventilating appliances

Cooking appliances

Dishwashing/Drying appliances

Clothes washers

Materials, equipment, and supplies

Temporary structures located near the insured premises

The policy’s protection for business personal property (such as office equipment, copiers, desks, etc.) applies whether the property is located inside or immediately outside the covered buildings. The category also includes property you own, lease or control (i.e., borrow or control) as long as the property is used by the business.

One item of importance, the BOP does NOT provide coverage for loss of use of damaged or destroyed property, nor for loss created by an actual or perceived loss in value of goods after a loss takes place.

Please see part 2 of this discussion on BOPs.

Liability Coverage – A BOP’s liability coverage provides comprehensive protection for claims or suits made by other parties. Specifically it covers losses involving injury to other persons or damage to property that belongs to others. It also provides limited protection against personal injury (slander or libel), advertising injury and losses involving an operation’s products or services.

Naturally, there are certain situations that are not covered by a BOP. For instance, there is no coverage for losses involving most vehicles, money and securities; illegal property (contraband), land, water, growing crops or lawns; or watercraft.

Enhancing Coverage – A BOP may be supplemented to provide additional protection. Property coverage options include adding insurance for accounts receivable, valuable papers and records, earthquake, spoilage, etc. Liability coverage can be expanded to handle additional business interests, limited vehicle liability, losses related to personnel situations, liquor liability and injuries to leased employees.

A BOP may be the answer to your company’s coverage needs and it may be worthwhile to get more information on the BOP from the nearest insurance professional.

The Businessowners Policy – Part 2

The BOP provides other coverage than the protection mentioned in part 1. The following protection can be selected under the BOP.

Optional Coverages

Outdoor Signs–Payment is available for direct physical loss or damage to outdoor signs at the described premises. Eligible signs may be owned by the named insured or owned by others but be in the named insured’s care, custody, or control.

Money and Securities–Coverage applies to loss of only the named insured’s money and securities used in its business while that property is at banks or savings institutions, inside the named insured’s living quarters, inside the living quarters of a partner or employee, at the described premises or while in transit between the places referenced.

Employee Dishonesty–The policy pays for direct loss of business personal property and money and securities due to dishonest acts its employees commit, whether they act alone or collude with others to do so.

Equipment Breakdown Protection Coverage–Coverage is available for loss or damage directly caused by or that results from electrical failure or mechanical breakdown to covered property. Covered property is electrical, mechanical, or pressure machinery and equipment

Liability Coverage – A BOP’s liability coverage provides comprehensive protection for claims or suits made by other parties. Specifically it covers losses involving injury to other persons or damage to property that belongs to others. It also provides limited protection against personal injury (slander or libel), advertising injury and losses involving an operation’s products or services.

A BOP may be the answer to your company’s coverage needs and it may be worthwhile to get more information on the BOP from the nearest insurance professional.

Insurance Fraud – Part 1

Fraud is a major, ongoing plague for the insurance sector. Consumers often view the problem far less seriously than do insurance companies. There are various reasons why the two groups perceive fraud so differently. There is a similarity with how individuals view tax fraud. Regardless any justification, many feel that “cheating” on taxes or insurance claims may be acceptable because they may consider both as unnecessary and unwelcome financial burdens.

However, insurance fraud victimizes both insurance companies and their customers. Fraud saddles both groups with substantial, measurable costs. On the insurance company side, fraud drains time and resources. Every insurance company has to commit a high level of its resources to combat fraud. It takes time and personnel to investigate suspicious claims, it has to pay out losses on claims that it can’t prove invalid, it often has to create and maintain special investigative units with related costs, and it must invest in new ways to keep up with new schemes. Customers are hurt by fraud in different ways too. One cost is the increase in premiums caused by insurance company efforts to recoup their higher cost of business. I think that insurance claimants are harmed by the, sometimes, hostile approach that insurers feel they need to use in order to ferret out fraud. That aggressive posture creates tension and problems for those with legitimate claims.

Insurance fraud refers to lying to or deceiving an insurer in order to make money or to illegally secure insurance. Some common fraud schemes include:

“padding” (inflating the true amount of) a claim
lying or hiding (concealing) important information when applying for insurance
lying or hiding (concealing) important information when reporting a loss
submitting false claims
“staging” accidents
failing to report recovered property
faking theft claims
committing (home or vehicular) arson for profit

Because of the costs associated with fraud, consumers should have an interest in the role they can play in reducing the impact of fraud.

Please see part two of this article for information on fighting fraud.

Insurance Fraud – Part 2

Part one of this article introduced the issue and the problems caused by insurance fraud. In this part, we present information on combatting fraud.

Fighting Auto Insurance Fraud

Persons attempting to commit insurance fraud often do so by deceiving innocent drivers during actual accidents or by involving innocent drivers in “staged” accidents. Do the following in order to minimize this risk:

Drive defensively, keeping space between you and surrounding cars.
When traffic slows, begin braking before the car in front of you does.
Be careful when turning into a lane that allows two or more autos to turn left at the same time. Victims of insurance fraud are often people who float across the line when turning and then are intentionally sideswiped by a person who is “staging” an accident.
If you are in an accident, write down license numbers of all cars involved in the accident, get the names and contact information of all persons involved and their insurers. Count the number of passengers in the other cars and get their names, addresses and any other pertinent information.
Call the police and get a police report even if the damage is minimal. DO NOT let another driver talk you out of calling the police.
Carry a disposable camera in your glove compartment or make use of a cell phones camera feature and take pictures of the damage to the vehicles and of all drivers and passengers in the cars.

Fighting Homeowners Insurance Fraud

It is far more difficult to involve an innocent party in homeowner fraud. However, a homeowner can help himself and help deter fraudulent claims by properly maintaining their home, and by removing or repairing items that could create tripping hazards to outside parties. Also, if someone is injured in your home, be certain that you get full information and be sure that an injured person gets any needed treatment. Carefully document any incident, including all impressions about likely injury. It may also be prudent to show healthy skepticism over any information on medical bills or claims.

Report suspicious actions such as a friend who asks you to store valuable property and you then find that they reported to his insurer that the property was stolen.

Think of insurance fraud as money out of your pocket because it is. According to the US Chamber of Commerce, fraud adds 25% to property and casualty insurance rates.

If you are involved in an accident and you are suspicious that fraud may be involved, report it to the authorities and your insurer.

Unfair Claims Practice – Part 1

Faithfully handling your premium payments creates the expectation that your insurance company will investigate and, if applicable, pay for a loss. Loss payment includes taking care of expenses associated with settling a loss or handling the defense costs of a lawsuit.

In most instances, disputes with an insurance company are legitimate disagreements. Parties may, justifiably, hold different positions on whether a certain loss is covered or, if covered, the amount of the loss. It is unfortunate, but sometimes an insurance company may have an attitude toward paying claims that fails to meet your expectations. In fact, a company may actually deal with you unfairly. Your right to fair treatment is, generally, protected under state law. States agencies, typically via a special insurance or commerce division, are responsible for seeing that insurance companies and agents are true to the commitment represented by the insurance policy.

Most states actively enforce the requirement that insurers fairly settle valid claims against their policies. Insurance companies and agents operating within a state are also provided with complete information regarding unacceptable claims practices. A state’s rules on settling claims are based on the National Association of Insurance Commissioners (NAIC) Unfair Trade Practices Model Act. The guidelines, developed from the original act and other regulations (which vary by state) are meant to shield you from practices that are misleading, unfair or deceptive.

For more information on such practices, please see part two of this article.

Unfair Claims Practice – Part 2

Part one of this article explained that policyholder have the right to expect their insurers to handle valid claims in a fair manner. We also mentioned that most states have rules that prohibit unfair claim practices. Here are some examples of such practices:

Attempting to settle a claim based on an application which the company has changed without the insured’s knowledge or permission
Delaying a claim investigation by requiring unnecessary reports or documents
Failing to act promptly after receiving information concerning an insurance claim
Failing to comply with prompt claims investigation standards
When applicable, failing to pay a claim quickly, fairly and equitably
Failing to promptly settle claims where liability is reasonably clear under one portion of the policy to influence settlement under any other portion of the insurance policy coverage
Make it a standard practice to file judicial appeals on trial judgments
Failing to promptly and clearly explain the basis in the policy or the law for either denying a claim or offering a compromise settlement
Require policyholders to travel unreasonable distances to use specific repair shops (for estimates and/or repairs)
Discouraging a policyholder from using arbitration
Misrepresenting significant facts or insurance policy provisions
Refusing to keep an insured informed of claim developments within a reasonable time after receiving a completed proof of loss statement
Denying claims without a reasonable loss investigation
Offering very low settlements to encourage policyholder to sue
Settling claims for amounts that are lower than a reasonable person would expect

The best way to avoid problems is to deal with reputable agents and companies who are committed to properly serving their customers. Your insurance agent would be happy to discuss your concerns and/or expectations about making an insurance claim. Take advantage of his or her expertise.

For more information on claims practices, please see part one of this article.

Valuable Papers And Records

Whether a business is a restaurant, a television station, a steel mill, a toy manufacturer or an accounting firm, they have one thing in common; they all have various types of important papers and records.

Often documents are routine and their loss would not create a problem. In other cases, loss of certain papers and records can be disastrous; affecting a given organization’s ability to continue operations. When such documents are particularly important; it may be necessary to arrange for special protection, such as Valuable Papers and Records (VPR) Coverage. This protection may be included as a supplement in other types of policies or it may exist as a separate policy. In either case, it protects items such as the following:

inscribed, printed or written documents
manuscripts
records and abstracts
books
deeds
drawings
films
maps and
mortgages

Some types of property are ineligible for coverage including money and securities or any data, programs and instructions used in electronic data processing operations. Materials that store such data are also ineligible for coverage. Further, there’s no protection in the following situations:

Property not specifically described within the policy and which cannot be replaced with property of similar kind or quality
Property consisting of samples or for items held for delivery after it is sold
Property stored at locations other than those described in the applicable VPR policy
Contraband or illegal property, or legal property that is used in illegal activities
VPR coverage assists with the expense of replacing valuable papers, such as the research necessary to rebuild customer account and billing information or to replace important loan information or documents that prove ownership of property. In some cases, a business may have to severely curtail or stop its operations until such replacements are made. Loss of valuable papers and records can easily result in loss of income and customers. Valuable Papers and Records coverage provides a vital source of important protection.

Electronically Stored Information

All businesses deal with Electronically Stored Information (ESI). It consists of documents that are kept in a paperless rather than a paper format. Therefore, it can consist of, well, nearly anything such as bills, receipts, contracts, correspondence, orders, internal memos (e-mails), payroll records, tax records, and so on. For various reasons, you may be required to reproduce and share information. The requirement may come from a customer, the IRS or, from someone who is suing you. It is the latter circumstance that has made ESI so prominent.

Regardless what a lawsuit may be about, each party to the suit has rights of discovery, a right to see information held by the other party that is considered relevant to the dispute. Typically the information may be for an extended period, such as months or even years. The parameters that control the discovery process are found in a set of legal rules called the Federal Rules of Civil Procedure (FRCP).

As recently as a few years ago, the discovery process handled electronically stored data along the same lines as traditionally stored data. However, it quickly became obvious that electronic or digital data is a far more complex creature than non-digital data. Therefore, rather than relying on regular rules of discovery, new and separate rules are evolving on E-discovery and they are radically different.

Electronic communication has taken the place of various other modes of contact. By the very nature of computers, this information never, truly, is ever destroyed. Even when information is “deleted”, the only change is that its access has been moved from an active to an inactive access status. This is much like the case of a library book having its catalog card destroyed, but the book is not taken off the shelf. It can’t be looked up in a regular manner, but it can be found if one knows where to look.

Requests for information during litigation have created issues that were never contemplated by the non-digital information world. In the past, an entity that had a document handling/retention/destruction system could manage (as well as explain) what happened with its information. No legal consequence was likely if paper information that seemed routine was destroyed after, say, five to ten years of storage. However, digital information can become inaccessible, but not destroyed.

Businesses routinely back-up data and store it on tapes or other media. Computers themselves replicate and keep many copies of information, storing it randomly according to its software programming. However, older information may become extremely difficult to access or analyze because of obsolescence of software and changes and upgrades to software and hardware.

A defendant to a lawsuit may be found liable for producing information yet, while having the information in backups, they may be unable to actually provide the data, or to provide it in a meaningful form. Now requests for data may be under increasing control of judges who may be responsible for making technologically-laden decisions on how data searches are to be performed and on the parameters of such searches.

Businesses may have to totally reconsider their procedures on handling and storing their information. This becomes a daunting task considering the unprecedented volume in which electronic data is created.

However, as conditions and requirements are shaped in the courts, information and a business’ responsibilities can no longer be considered normal or mundane.

Niche Or Not

There are risks associated with every business, whether the business involves one person, hundreds or thousands. These risks are often handled by commercial insurance. Different types of insurance cover many aspects of operating a business, such as accidents that may injure employees or customers, losses that may involve business furnishings, equipment or housing, or incidents that create loss because of work-related agreements. It is sometimes difficult for businessowners to make the right choices about insurance, especially when there are so many insurance products, including specialty or niche products.

Niche insurance policies exist, in most instances as a way to simplify insurance decisions for insurance companies and their customers. A custom policy is usually designed for a large operation that has enough special coverage needs and offers enough potential premium revenue to justify specialized service. A niche product is often a policy that offers a combination of coverage that meet the need of a defined market, such as small contractors, offices, restaurants, appliance repair, etc.

Niche insurance products are attractive because they may offer proper coverage at an affordable cost. However, care has to be taken when insurers sell and businesses decide to buy such policies. In essence, they are designed for the typical bundle of exposures in a given market. Business owners and key decision-makers place a priority on areas other than insurance needs, so an operation may be attracted to buying a niche product assuming that it will take care of everything. That’s dangerous because a particular business may have issues that won’t be fully handled by that policy. The sensible act is to consider a niche product as a starting point and making use of a competent insurance professional. Together you must evaluate your operation and determine your coverage needs, what issues can be handled by insurance, what type of insurance would best handle the need and what amount of insurance can affordably be purchased. Another key is to discuss how an operation may be altered or run differently to reduce chances of loss that can’t be handled by insurance. Remember, a niche product is a sensible choice only when it fits a customer’s needs.

Loss (Reporting) Control

Insurance consumers experience all types of property losses and, depending upon how serious the loss is, property owners have to decide what to do. Typically, the next move is to get an insurance company involved. When a loss amount is high, this may be the only practical thing to do. However, when a loss involves a more modest amount, it may be smart to carefully consider if it is appropriate to file a claim.

If you carry insurance, it’s important to think about the consequences of filing minor claims. Insurers are focusing more of their attention on loss history. They closely scrutinize how past losses affect a given business that they insure or are considering insuring. In the current insurance environment, reporting a minor loss could make you a two-time loser. First, depending upon loss circumstances, coverage may be denied. Second, the fact that the loss occurred may cause your insurer to take a closer look at you.

Insurance companies want to have as much information as possible in order to decide whether to offer or continue to offer coverage. Loss history has always been important to insurers. However, an increased emphasis is being placed on using past losses as a way to predict the likelihood of future losses. The difference is that insurers have abandoned asking only about losses that exceed a certain amount. They now look for information on every conceivable loss. This increased sensitivity to losses may cause an insurer to raise premiums or even decide to terminate coverage when, in the past, minor or unpaid claims were not treated as problems.

Insurance consumers need to be aware of how they handle losses and of how insurers currently respond to their customers’ (or applicants’) loss activity. You owe it to your organization to manage losses in a manner that is in sync with the new reality. Handling more small losses as an operating expense instead of through your insurer may be good business and could help preserve insurance availability for serious situations. More organizations are becoming aggressive and creative in managing losses, especially as insurers have changed their attitude toward losses and underwriting.

Alternative Risk Techniques

Businesses are vulnerable to having their existence threatened by a multitude of problems. In many instances, a company buys insurance to handle different aspects of their operations such as General Liability, Business Auto, Workers Compensation, Commercial Property, Professional Liability, Commercial Umbrella and other coverages. However, insurance is not always the most appropriate method for managing a particular source of loss. Insurance is just one form of risk management and companies increasingly use alternatives.

Alternative Risk Techniques (ART) is a reference to methods of handling loss exposures that do not involve traditional insurance products. The reasons for seeking other solutions for handling threats of loss are varied. In some instances, the type of loss is not covered by the traditional insurance marketplace; extreme examples include war or nuclear risks. Sometimes, while insurance may be available, it may not be affordable, such as professional liability risks for occupations very vulnerable to litigation. Another instance involves minor losses that cause problems because they occur frequently. They have to be addressed, but are impractical to insure. Common types of ART include:

Captive Insurance Companies
Risk Retention Groups
Financing Techniques
Direct use of Reinsurance Companies
Use of Options (futures)

ART is typically used by larger businesses that increasingly view risk management as an integral part of their operations. ART offers greater control of operation costs from two angles, exercising decisions about the best way to avoid/minimize possible losses and addressing the level of resources devoted to managing sources that could affect an organization’s income and assets. Alternative methods also offer other advantages such as enhancing the level of risk management service, securing a customized program that addresses particular coverage needs, and reaping financial savings more quickly when an effective program is implemented and followed. Another incentive for ART is that companies can gain greater control over their balance sheets and financial statements.

Although Alternative Risk Techniques do not involve traditional insurance, many insurance professionals are an excellent source for providing service in this area, since both insurance and ART are tools to help manage risks faced by all organizations.

Employment Practices Liability

Hiring and firing practices are the legal minefields that are best navigated by the use of Employment Practices Liability Insurance (EPLI). It is important that a business has clear policies that are applied consistently to each employee. Such policies must directly relate to their job. Do you know what type of decisions could trigger a claim? For example, is it legal to terminate employment under the following situations:

a driver with a bad driving record?
an employee who is rude to your customers?
an employee who swears at customers?

The answer is not that simple. A business’s action may depend upon circumstances such as whether an employee’s duties involve driving a company vehicle, or directly involves customers and if the company can prove that such behavior fails to meet the applicable job standards.

One key issue is having access to legal counsel that has expertise in this special area of the law. Another key issue is documenting the essential job functions and establishing measurable standards for each position. Use of regular performance reviews and applying the standards equally to each employee is a smart employment practice. The best defense against employment practice claims is to know the law in your state and then having policies and procedures that meet or exceed its legal standards.

The U.S. Department of Labor offers a Small Business Handbook from their Website. The U.S. Equal Employment Opportunity Commission also offers numerous publications addressing different employment laws from their Website. Contacting an insurance agent regarding Employment Practices Liability Insurance is another avenue to explore.

Policies and premiums for this type of coverage vary tremendously among insurers. Many companies offering the coverage also offer assistance in writing policy and procedure manuals and other ways to reduce the potential for claims involving sexual harassment, wrongful termination or discrimination. No business is immune from these claims.

Certificates Of Insurance

Business transactions frequently require the valuable protection provided by insurance. A Certificate of Insurance is a document that is often requested as proof that adequate insurance exists. A certificate is not the same as a policy and certificates do not affect the coverage provided by a particular insurance policy. Therefore, requests to “endorse the certificate of insurance” are inappropriate and misleading. A certificate is a separate document that is used to comply with a common contract requirement to verify certain types and amounts of insurance.

Certificate holders, the entity or party requiring the certificate, often demand that they appear as “additional insureds.” This requires an endorsement (change) to the policy and it gives them coverage for injury or damage resulting from the contract.

Example: Tenant A leases a building from Property Owner B. Property Owner B demands that the tenant changes its insurance policy to also show the property owner as an additional insured. If a tenant’s customer is injured on the premises and sues both the property owner and the tenant, the tenant’s liability policy would provide coverage for both parties.

Construction contracts require certain forms of insurance, certain insurance limits, a hold harmless agreement and the inclusion on insurance policies as additional insureds. A “hold harmless” agreement is a contract provision that states how much responsibility each party accepts for damages arising out of the agreement.

A certificate of insurance can confirm that the appropriate policies were issued and that other requirements were also met. It is important to have a system for monitoring receipt of certificates BEFORE any sub-contractors are allowed to begin work. If certificates are not obtained or kept up-to-date, when the contractor’s Workers Compensation and General Liability policies are audited, the payroll for the sub-contractors without Certificates will be included with the contractor’s resulting in an additional premium charge.

Ask your insurance agent to help determine if you should be obtaining or providing certificates of insurance in conjunction with your business. In addition, when you’re required to provide a Certificate, send your agent a copy of the contract. The contract allows the agent to assist you in determining what liabilities you are accepting and what can be done to modify your insurance program to best protect your financial well-being.

Business Insurance Costs

Businesses price their products to cover the costs of production as well as their labor, sales marketing and other major expenses. Prices also reflect some post-sales costs such as handling repairs or replacements under warranty. At one time many industries used a pricing strategy for their products that failed to reflect their true costs. A once-popular assumption was that lower prices would promote increased sales and the higher sales volume would make up the cost difference. The strategy wasn’t successful. It hasn’t worked for the auto industry, the computer industry or the insurance industry.

The problems of the insurance industry became apparent within the turn of the century and were drastically exasperated by several natural and financial catastrophes. Events such as terrorist attacks, hurricanes, housing market and banking meltdowns all substantially affected the insurance industry. The insurance industry’s attempts to gradually correct their pricing had to be sped up; substantially!

For much of the 21st Century, insurance companies have had to handle an increasing number of claims being presented many years after their policies have expired. In the case of pollution, asbestos and employment practices; the industry is being asked to handle losses that policies weren’t designed to even cover.

Well, what can a business owner do to minimize their high insurance cost? Before considering sacrificing the amount of protection a business carries just to save money, consider the following strategies:

1. Review your coverage:

a. Take a close look at your insurance. Could you increase the deductibles to lower your premium?

b. Are you carrying physical damage coverage on commercial vehicles that due to age, wear or other characteristics, it is no longer makes financial sense to do?

c. Are you insuring items you could replace out of pocket? Are there pieces of equipment that are insured when they could be replaced from operating funds without submitting a claim?

2. Review your exposures:

a. Could you reduce the premium by installing an alarm system or fire protection system? Would these premium savings offset the cost of the system?

b. Could you implement safety programs that would reduce the cost or make the insurance company more interested in providing coverage? For example: driver safety programs, back to work programs, safety training in proper use of equipment and job functions.

3. Identify your insurance goals:

a. Do you need an insurance company that can provide loss control services?

b. Do you need an insurance company that can provide claim-handling services for your Workers Compensation insurance?

c. Do you need an insurance company that will allow you to make payments by phone or on-line 24/7?

d. Do you need an insurance company that has a local agent/representative that can assist you in your insurance solutions?

Shopping and price are not the only issues in insurance. What you don’t know can cost you more in the long run than you could ever save in premiums. Discuss your situation with an insurance professional and make the choice that works for you.

Worker Safety – Part 1

A major element that defines whether a person is an employee is if their time and actions are under control of another party. Since employers control where and when their employees work, they have a major obligation to make sure they are provided with a work environment that is safe.

Among common sources of worker injury are slips and falls. Information from the National Safety Council reveals that stakes are high since, on average, a slip or fall costs $16,000! Sadly, many businesses are ignorant of this costly danger.

In order to understand what it takes to minimize such accidents, it is critical to be aware of a given business’s danger areas.

Danger Areas

With regard to typical workplaces, the areas of concern involve the following:

Exterior Walkways
Floors
Housekeeping
Miscellaneous
Stairs and Ramps
Weather

It is often smart to inspect a workplace, both interior and exterior spaces, in order to determine slip hazards. The next step is to correct any hazards that are found. Keep in mind that the attitude of managers and employees must be part of any safety plans since safe environments are a direct product of safe procedures and worker behaviors.

There are other important benefits in creating and maintaining a safer work place. Businesses that minimize harm to its employees usually experience fewer interruptions, lower insurance costs and higher levels of productivity.

Please see Worker Safety Parts 2 and three for examples and corrective action.

Worker Safety – Part 2

In Worker Safety Part 1 we discussed the importance of addressing slips and falls by employees. In this part begin sharing examples and ways to improve dangerous situations.

Exterior Walkways

Regardless of weather, all outside areas, such as curbs, lawns, lots and sidewalks merit special attention. Parking areas that are next to sidewalks should be controlled so that vehicles are not allowed to overlap. Sidewalks must be kept in good repair to avoid large cracks (perils for tripping as well as trapping heels), and uneven sections (including heaving portions).

Asphalt areas should also be maintained to avoid dips, cracks and potholes. Use of gravel lots should be avoided because they are prone to uneven areas and pooling of water. If workers are allowed to walk on lawns and landscaped areas, they should be inspected for evenness. Care should be taken to use landscape devices that create trip hazards. It may be most prudent to prohibit use of lawn and landscape areas for walking (especially for shortcuts) when more suitable pathways are available. Plants, shrubs and trees near walkways should be properly trimmed and maintained so that growth and debris don’t hamper walkway use.

Curbs should be maintained as deteriorated curbs are a definite trip hazard. Use of bright paint to make curbs conspicuous is also helpful. Compliance with accessibility laws is a must, such as creating a slope that transitions from a lot to a walkway, also makes things safer for all workers.

Floors

Companies must make sure that any flooring used is properly maintained to keep them safe for use. Carpeting that develops worn or loose areas should be patched or replaced. Floor areas that consist of materials that are vulnerable to becoming slippery when wet can be handled by various methods. Use of mats is a good method. However, mats should be regularly inspected and kept clean and dry in order to remain effective. They should also be properly positioned and not cause uneven areas (inappropriately thick mats).

Floors should not be cleaned or treated with products, such as wax or polish that increase the chance of falling. Wood and vinyl floors should be kept level and free of cracked materials or gaps.

Wet floor areas, whether due to cleaning or spills, should be dried as quickly as possible and floor markers should be used to warn workers. However, markers should also be quickly removed when no longer needed or else workers will start to ignore them.

Please refer to Work Safety Part 3 for additional examples of possible accident sources and corrective action that a company may take to reduce chances of slip and fall losses.

Worker Safety – Part 3

In Worker Safety Part 3 we continue to share examples and ways to improve dangerous situations.

Housekeeping

Housekeeping issues in this area have much to do with hazards caused when work paths are cluttered or are arbitrary. Other problems arise when floors may, due to work or accidents, may be slippery because of work byproducts (such as saw dust, particles left after drilling or spills. Another issue may be incidents where workers are using miscellaneous objects or furniture in order to reach items on higher levels. Use of such items increases the chance of falls because of breaking or loss of balance.

The best ways to approach such problems are to create designated walkways and to keep them free of obstructions. It is also important to quickly clear any particles or substances that cause a slick surface. Regarding the need of workers to elevate them in order to get items that are out of reach, proper step ladders or other climbing apparatus should be made easily available for worker use. Employees must be instructed on their proper use.

Stairs and Ramps

Wet or dry, stairs and ramps present an increased chance for trips and falls. There are several steps that can be taken to make stairs and ramps safer. They should be properly maintained to make sure that they are safe to use. Installation of solid handholds and railings are critical. It is very helpful to use any method that increases traction and visibility, such as treads, traction strips, contrast edging and slip resistant treatments.

Miscellaneous

Other issues can contribute to falls and should be properly handled, such as areas near sinks and, water fountains and water coolers. Fountains should be maintained to prevent pressure that causes water to overshoot and dampen surrounding floors. Mats should be kept on floors next to sinks to combat wet, slippery floors caused by overflows or spills. Workers should be trained to promptly report any hazardous conditions. Work procedures should require use of proper footwear, such as forbidding items such as sandals or flip-flops which are, inherently prone to cause trips and falls. When work processes call for them, require use of slip resistant and/or reinforced footwear.

Weather

A company’s sidewalks and parking lots can cause problems in many conditions, especially when cold and wet. It is important to keep these areas as clear as possible as well as free of slippery conditions. Examples include pathways that are blocked by accumulated snow, icy walkways, refreezing after initial treatment, slippery ramps or curbs.

The tasks are to be sure that all snow is properly cleared and surfaces are treated to prevent the formation of ice. Besides treating and clearing areas, it is also important to use periodic inspections to certify that conditions remain safe. If not, re-clearing and retreatment is necessary.

Wet conditions such as areas where melting or runoff water slicken paths or pools can cause dangerous falls. These are handled by making sure that walkways and lots are kept level and proper drainage exists. Downspouts should be placed correctly, eliminating chances that water affects walkways.

Worker Safety – Part 4

In Worker Safety Part 4 we will discuss the leading cause of injuries and death in the construction industry and ways to improve safety.

According to OSHA, falls are the leading cause of death in the construction industry and many could have been prevented with the right safety equipment.

If an employee is injured or dies because of the absence of proper safety equipment, the negligent employer could go to prison or must pay large fines. Some fines have been in the hundreds of thousands of dollars and can put you out of business. As an employer, it is your responsibility to keep workers safe, educate and train them, implement safety controls, and provide safe equipment.

Being prepared is the best way to keep workers safe. Before anyone begins work, plan out the project, especially if workers will be working at heights. Think about these questions when creating job plans. What does the job entail? How will the workers get the job done safely? Is any special training needed? How many employees will you need to complete the job? What safety equipment is going to be required?

While you are estimating the job, think about what safety equipment and tools are needed to get the job done right and be sure to include these considerations in the price. When you are walking the job site, think about every hazard you see, especially when there are heights. When the right tools and equipment are supplied, you are making sure the job site is safe for workers and help prevent injuries and fatalities. Some of the safety items you may need include fall protection, ladders, scaffolds and safety gear. You may even want to consider using personal fall arrest systems (PFAS) when working on roofs or heights. Some states require using PFAS protection (harnesses, webbing, connectors, lifelines, anchors, etc.) so be sure to check your local and state laws, regulations and employer responsibilities.

Train all your employees on how to set up, attach, secure and operate equipment. Make sure the workers are trained and required to check equipment regularly. This will help make certain the equipment is properly working. When unsafe equipment or conditions are discovered, corrective action must be taken. Workers must take safety seriously or else face serious consequences. Check your local and state laws for more guidance with rules and regulations.

Hold safety meetings on a weekly or monthly basis. This will re-enforce the importance of job site safety and help to minimize or eliminate falls. You may also want to contact your insurance carrier. Some insurers provide Risk Control Services and can assist employers in implementing a formal safety program. Also, visit the United States Department of Labor – Occupational Safety and Health Administration (OSHA) website. There is plenty of information that includes training, safety material, brochures and posters for job site safety. Remember, it’s the law to protect your employees from injuries or death.

A Look at Lloyd’s

The history of Lloyd’s begins at Edward Lloyd’s coffeehouse in 1688. The establishment attracted the custom of merchants, particularly ship owners with vessels and cargoes needing protection and evolved into a meeting place where businessmen sought brokers to place insurance with wealthy, reputable men. Character and integrity were important because the persons (called underwriters) who agreed to invest in the ships and cargoes put their personal fortunes at risk in order to pay their share of any claim. If a ship’s voyage was successful, the underwriter would share in the profits.

Note: The term underwriter came from the practice of persons agreeing to insure a ship and/or its cargo by placing his signature under the name of the vessel he was willing to sponsor.

Lloyd’s of London has long been identified with British history and the growth of worldwide commerce. It is an international insurance market, located in London, whose members cooperate with each other, compete with each other and, of course, compete against other insurance organizations. There are four major markets at Lloyd’s: Marine, Non-Marine, Aviation and Motor. Lloyd’s also has a smaller market that handles short- and long-term life insurance.

Insurance is not placed with the Corporation of Lloyd’s, a society incorporated under Act of Parliament of 1871. The Corporation provides the premises, shipping information services, administrative staff and other facilities that enable the Lloyd’s market to transact insurance business. The actual insurance transactions are handled by thousands of Lloyd’s members. About one-third of the membership is actively engaged in the market. The remaining members provide capital, but do not actively place business in any of Lloyd’s insurance markets. Only the underwriting members may accept insurance business on behalf of a syndicate.

Historically, a policyholder with a valid claim could be certain that the claim would be paid, whatever the cost to the member who accepted the risk. Formerly, every underwriting member was responsible up to the full extent of his personal assets for his share of business losses. If a member’s personal assets were not enough, Lloyd’s would make any deficit out of its reserve funds.

Today, Lloyd’s liability is more conventional, limited in the same manner as traditional insurance companies. The change was necessary due to its long-term problem in handling losses associated with asbestos claims. Lloyd’s created a separate entity to handle that large source of loss and many organization members became inactive (no longer writing new business) in order to meet their payment obligations.

While Lloyds’ number of active memberships has substantially decreased; they are made up of, primarily, corporate entities. Lloyd’s capacity to write business in the global market