Commercial Auto Insurance 101

May 11

Nearly six million traffic accidents occur in the U.S. every year – more than 16,000 a day (or one every 10 seconds).

If your company owns, operates, or uses motor vehicles – or if you have employees who use their cars for business purposes – you need Commercial Auto Insurance to provide financial protection against losses from mishaps that occur behind the wheel.

This valuable policy provides these coverages:

  • Bodily Injury Liability pays the cost of bodily injury to others from accidents for which you are responsible. If you’re sued, it also pays your defense and court costs.
  • Property Damage Liability picks up the tab for property damage to others for which you are responsible, as well as defense and court expenses.
  • Personal Injury/Medical Payments usually covers medical and funeral expenses for bodily injury from an accident that involves an insured vehicle.
  • Collision pays for a covered vehicle that is damaged by a collision with another vehicle or object.
  • Comprehensive Coverage pays for a covered auto that is stolen or that is damaged by causes other than collision or reckless driving.
  • Uninsured/Underinsured Motorists covers injuries and, in some cases, property damage, when you’re involved in an accident with another person who either doesn’t have Auto Insurance or carry enough coverage.

Before you purchase or renew your Commercial Auto Insurance ask yourself these questions: 1) how much Liability Coverage you should buy, and 2) how large of a deductible should you choose?

We’d be happy to help you choose the most cost effective policy for your needs. Just give us a call.



Cybercrime: A Growing Threat

May 04


The more heavily your business relies on electronic technology, the greater your vulnerability to cyber criminals.

Criminal activity conducted through the Internet impacts businesses of all sizes. One study found that companies with 100 or fewer employees accounted for 72% of data breaches worldwide.

Today’s cybercrimes put your grandmothers’ spam email list to shame. According to a nationwide study by Ponemon Institute, the median annual cost of cybercrime for a large company in 2011 came to $5.9 million.

Cybercrime covers a variety of activities, from malicious codes and hacks in which private client or company information is made public or stolen, to disruption of normal operations. Perpetrators include rogue employees, “hacktivists” seeking to make a political statement, or third parties seeking financial gain.

Businesses, such as coffee shops, that allow customers on their premises to use Wi-Fi face unique risks. In one case, a Hollywood producer sued the owner of a restaurant offering Wi-Fi access after a customer used the network to download a film for bootlegging.

To help protect your business against potential losses from cybercrime, here are some recommendations:

  1. Review your specific exposures. For example, if you allow people outside the company to use your WiFi, this can increase your exposure.
  2. Focus on the human element in data security by offering employees effective training and specific guidelines.
  3. Re-evaluate your guidelines frequently.
  4. Evaluate the potential risks of adopting new technology.

Last, but not least, make sure that you carry adequate Cyber Liability Insurance.

Our agency would be happy to tailor cost-effective coverage to your needs, and help you develop and implement a comprehensive program for managing your exposure to cybercrime.



Side Job Doesn’t Prevent FMLA Claim

Feb 24

In the California case, Richie v. AutoNation, an employee out on CFRA (FMLA) was fired by his employer when he was found to have been working at a restaurant he owned during his leave period. The company’s leave policy prohibited outside employment during leave. The court ruled in favor of the plaintiff, stating that FMLA/CFRA (the California equivalent) has a process to follow in shortening FMLA leave if you believe that an employee no longer qualifies for it. You cannot create your own rule or process and, in a sense, do an end run around FMLA protections. The court ruled that because job reinstatement is mandatory, the only way to stop leave properly is by following the CFRA process and questioning the medical opinion of the employee’s doctor.

This decision reminds us that ignorance of legal requirements is no excuse. In this case, the company argued that it had a good faith defense because it was not aware of this limitation on managing leave. The court essentially said “So what? It’s a mandatory statutory obligation, which you can’t avoid.” As a different court stated, “A showing that an employee is unable to work in the employee’s current job due to a serious health condition is enough to demonstrate incapacity. The fact that an employee is working for a second employer does not mean that he or she is not incapacitated from working in his or her current job.”

Some additional notes:

  1. The decision reminds us that an employer’s policy on secondary employment during FMLA leave must be the same as that for employees who are not on FMLA leave. Otherwise, the policy itself violates the law.
  2. Second, the court overturned an arbitration decision in this case which allowed the court’s good faith defense. Although review of arbitration is very limited, the court will step in if the arbitrator misapplied the law.
  3. Finally, whether it’s FMLA leave, ADA accommodation leave, use of PTO or sick pay, etc., if you doubt the veracity of any employee’s story (i.e. they were playing soccer or lifting pianos this weekend), you must follow the proper procedures so that you don’t find yourself trapped like AutoNation did in this case.



The Well-Maintained Workplace: A Fall Mini-Guide

Nov 04

insuranceYour workplace is sacred. It’s where you do business, sure, but it’s also where you forge important relationships, where you find your purpose in the world, and where you communicate to others how much they mean to you. Use fall as an opportunity to keep that workplace functioning at a high level with this mini-guide.

1. Check the Roof

Protect your office by keeping your roof sound. Call in a professional to check for problem spots, and advise on maintenance or repairs before winter sets in.

2. Clean Out Communal Spaces

You’ve heard of spring cleaning? Fall cleaning is a good idea too. Before holiday decorations and treats start rolling in, do a thorough sweep of common areas. Remove trash, old decorations and food, and wipe down surfaces. Refresh candles and plants for a clean, healthy vibe.

3. Pick Up Hazards

Pick up equipment and branches from walkways and parking lots before they get disguised by snow and become real hazards.

4. Tune Up the Furnace

Don’t chance a winter burnout. Instead, maintain your furnace ahead of time so you’ll be toasty warm all the way until spring.

5. Check Your Insurance

Your insurance only helps you if it fully covers you in case of emergency. If you’ve recently upgraded your premises, done renovations, added vehicles or otherwise improved your business (i.e. made it worth more), you need your insurance to reflect that. Talk to an agent today.

6. Lay in Emergency Supplies

A radio, space blankets, food, candles and flashlights are all good supplies to have on hand in case of power outage or storm.

7. Stock Up On Shovels

Okay, so you don’t need a whole army of shovels … just enough to efficiently clear off walkways and create paths to the parking lot in the case of a freak snowstorm.

8. Put Plants to Bed

Your landscaping appreciates a turndown. Prune perennials, scatter mulch and give the lawn a final mow before locking up your yard tools for the season.

9. Turn Off Outdoor Faucets

Nobody wants to greet spring with a busted water main. Turn off outdoor faucets so pipes don’t freeze and crack or burst.

10. Say Hi to Clients and Customers

Fall is a great time to connect with clients and customers, especially if you sell products or services that relate to the holidays. Say hi and stay on their radars!


5 Health Tips for Your Company’s Healthiest Fall Yet

Oct 14

woman-sickNothing keeps business humming along and employees happy like a healthy workplace. When people can count on coming to work and staying safe, being covered by great insurance, and having the best chance of fighting off the nasty bugs of the season, your work will blossom. Here are five ways to help make that happen.

1. Encourage People to Get a Flu Shot

When the flu starts going around, it tends to knock a lot of people down all at once. You can help minimize this by encouraging people to get their flu shot. Sometimes you can even have a medical professional in to deliver shots to anyone that wants them, in which case you should model getting one yourself. Some people have strong opinions about the efficacy of the flu shot, however, so don’t be overbearing.

2. Enroll Everyone on Time

Health insurance usually renews every year, and that renewal is preceded by an open enrollment period in the fall. This isn’t the case for all policies, but for most. Whether you’re responsible for enrolling everyone, or you allow employees to pick the plans that suit them best, make sure that everyone knows enrollment is happening and you meet all necessary deadlines.

3. Remove Hazards from Yards and Roads

Pick up fallen branches, put equipment away and rake up slimy leaves and grass trimmings before snow falls. Otherwise, walkways and lots become hazardous precursors to workers’ compensation claims. That’s not what you want, is it?

4. Have Emergency Supplies on Hand

Food, space blankets, candles and a radio are all crucial additions to your emergency kit. Take safety seriously!

5. Prepare for Inclement Weather

Maryland doesn’t have the worst winters around, but neither does it have the easiest. Chances are good we’re going to get considerable rain and at least some snow, as well as ice and sleet. It’s a good idea to have a snow shovel and de-icing agent on hand just in case you get hit with a big storm while at work, and need to clear a path for people to get home.

Your workplace is about more than simply making money and padding out your bottom line; it’s about protecting the people that matter to you. You can do a better job of that if you follow the above health tips. So good luck, and get going!


Things You Don’t Know About Your Construction Company’s Workers Compensation

Oct 07

Required by law, Workman’s Compensation Insurance, usually, called worker’s comp protects your employees from injury, illness, and even death that is work related.

Shop Around

Using statistics from The National Council on Compensation Insurance (NCCI) insurers determine high and low risk industries. Within the industry, individual employer safety records help when determining a specific insured’s premium. Like everything else, you buy, shopping around pays off as rates do vary from company to company.

Your construction company’s experience part of the premium calculation comes from the three-year rolling average of claims made during the prior four years. The four years comes about, as there is a lag period of one-year.

Employees on a Job Site May Have Other Recourse

Imagine you are a plumbing a subcontractor on a construction job. As the project is multi-stories the general contractor had scaffolding erected. One of your employees was on the second floor running some pipe, and the scaffolding gave way. Your employee fell two stories and severely injured his back. Because of his injury, he suffered three months of no work (lost wages) and required extensive physical and occupational therapy (medical costs). Extended physical labor is out of the question as it causes a great deal of pain (disability claim). It looks like you will take a hit on your workers comp experience rating, as this is a large claim.

But wait, you may want to join with your employee or your insurance company in a lawsuit against the scaffolding company as an investigation proved the scaffold was improperly put up. The scaffolding company had other similar lawsuits against it yet the general contractor hired them. Your employee and your workers comp insurance company can sue the general contractor for negligence in hiring a company with a bad safety record. If the insurance company receives an award because of the lawsuit, the hit on your experience rating is not as bad. The impact on your future premiums is less than if your insurance company paid all expenses related to your employee’s claim.


* Comparison shop for the best rates for your construction company’s worker’s comp insurance.
* Depending on the circumstances of the injury, others parties could be responsible under product liability or third-party liability claims. Work with your insurance company to keep their payout as small as possible to keep your premium low.
* Employers with good safety records pay less than employers who have poor safety records.



Injured Employees: what are your duties under workers compensation?

Sep 23

An employee is injured on the job while carelessly texting their buddy. What are your duties under the workers’ compensation law?

First, you must provide for immediate medical care, including first aid, and/or emergency services. Stop the bleeding, get them breathing. If necessary, call 911 or transport the employee to your pre-arranged medical facility, or directly to the hospital emergency room, whichever is appropriate.

Second, begin an initial investigation by gathering the injured party contact information along with witness contact information, and a brief description of the accident. Forward this information to your insurance carrier.

Upon any receipt of legal papers, lawsuits, or information regarding the loss, forward originals immediately to the insurance company. Keep copies for your records.

Cooperate with your insurance company investigation, settlement, court proceedings, or payments. This coverage is no-fault, don’t create procedural issues which can remove that status.

Do not interfere with the insurance company right to recover from third parties. The insurance company will seek subrogation from at-fault drivers, products manufacturers, or others. Allow them to do their jobs. They deal with these situations everyday.

Do not make payments or assume liability unless doing so at your own cost. Remember: this coverage is no fault. Demonstrating obligation creates confusion over statutory benefits.

Okay, so essentially your obligation is:

  1. Get medical help quickly and to triage the level of medical services needed for the injury.
  2. Report to the company information necessary to initiate a claim and forward legal correspondence.
  3. Get out of the way.

Getting back to the texting issue. Not relevant to the claims procedure for this injury, but think about your rules involving employee cell phone use and texting. Employees need to focus on their tasks to stay safe.



Are You in Compliance with Commercial Vehicle Regulations?

Sep 16

Many businesses use vans, trucks and buses to move their customers, products or equipment. Depending on the size and use of those vehicles, a business and its drivers may be subject to state and federal commercial vehicle regulations. Complying with these regulations is an important part of a fleet safety program.

State and Federal Requirements

Commercial motor carriers are regulated by the states in which they operate. If these vehicles operate in interstate commerce, federal regulations also apply. In general, most states follow the Federal Motor Carrier Safety Regulations (FMCSR) or similar rules.¹

the definition of commercial vehicles

Commercial Driver’s License (CDL)

Motor carriers that operate large commercial motor vehicles, or vehicles used to transport hazardous materials, must comply with additional regulations if they operate the following types of commercial vehicles:

  • Class A – Vehicles with a gross combination weight rating of 26,001 pounds or more including a towed trailer over 10,000 pounds.
  • Class B – Single unit vehicles with a GVWR of 26,001 pounds or more (if pulling a trailer, the trailer must not exceed10,000 pounds)
  • Class C – Vehicles under 26,001 pounds used or designed to transport 16 or more passengers, including the driver, and vehicles less than 26,001 pounds required to display hazardous material placards.

Drivers of these vehicles must have a commercial driver’s license and the appropriate endorsements for the vehicles they are driving. Companies that operate these vehicles must also have a drug and alcohol testing program that meets the Department of Transportation (DOT) alcohol and controlled substances testing program requirements.

Registration Requirements

Companies that provide interstate for-hire transportation must obtain federal operating authority by filing the appropriate application with the Federal Motor Carrier Safety Administration (FMCSA). For-hire and private motor carriers must also register with the FMCSA and obtain a U.S. Department of Transportation (DOT) number. This number must be displayed on all commercial vehicles the motor carrier operates.

Organizations operating commercial motor vehicles in interstate commerce may also be required to register and pay fees under the Unified Carrier Registration Act of 2005.²

More than 30 states currently require intrastate motor carriers to obtain a U.S. DOT number as part of their commercial motor vehicle registration process. Other state registration requirements may include complying with International Fuel Tax Agreement and International Registration Plan, if a motor carrier is operating in interstate commerce.

Additional registration requirement may exist. For information about these requirements visit the Federal Motor Carrier Safety Regulations website and contact the agency in your state that regulates commercial motor vehicles.


Skilled Labor Shortages: A Growing Problem?

Sep 09

The good news: the construction economy continues to show signs of recovery. After losing nearly 2.3 million jobs during the recession, an Associated General Contractors of America (AGC) survey reports that 86 percent of companies plan to hire in 2014.* The problem: trade workers with the right skills and capabilities for the job may be getting harder to find. As the industry recovers, less-experienced workers are being used to support increased demand.

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Qualified Workers Can Help Increase the Quality of Workmanship.

Hiring qualified workers — including carpenters, equipment operators and laborers — is one of the most important steps in managing construction defect risk. A lack of skilled labor can affect workmanship, increasing the likelihood of construction defect. Travelers has already seen the number of claims in states such as California and Texas grow as the post-recession pace of construction gains momentum.
Measure twice. Hire right.

One of the best ways to defend against construction defect claims is to pre-qualify potential hires. Double check to make sure they have the proper credentials,
experience and skills to deliver quality work. Effective hiring strategies can help prevent potentially complex and costly construction defect claims down the road.


Sarbanes-Oxley Revisited: environmental impacts and accounting.

Aug 05

Sarbanes-Oxley reinforced the idea that public companies have a duty to be transparent in dealings. No insider trading or enriching corporate executives through questionable perquisites like low interest loans.

But when does transparency become speculation?

Estimating costs accurately for remediation work is difficult. Add to that difficulty the uncertainty that the work will be undertaken, or the property will be sold as is. Complete the estimate in the face of changing regulations and newly discovered contaminants. This defines speculation.

Sarbanes-Oxley combined with new trends in accounting implies these costs must be estimated and property values written down.

Yet, if property values are decreased with an environmental liability, what happens when a company then chooses to remediate the contamination?

The costs associated with the clean up are expensed.

Your books just took a double hit, and there is no provision to reduce the liability until the building is sold.

Good risk management can help avoid this situation.

First, avoid spills and contamination by using proper handling and secondary containment. If spills occur, clean them up immediately.

Perform, or have an environmental professional complete, a survey of all current conditions which could lead to property devaluation. Fix the problems you can.

Review your environmental liability insurance options. In other words, think about pre-funding any contamination loss. Like fire insurance, once the claim occurs, the building is worth less. The fire insurance will either pay the actual cash value (economic loss) or rebuild the structure (physical loss)

If you accept the actual cash value, the building value decreases and your cash position increases for no net gain. If you rebuild, the books do not change.

What happens when the building burns, and you’re uninsured? You still must account for the loss with a reduced property value.

Look at environmental liability with the fire insurance analogy in mind. If you insure against environmental impacts and one occurs, you will then have the option as to how you want to handle the claim.