Workers Compensation fraud is a widespread and serious problem that’s not only illegal, but leads to higher insurance premiums for all businesses – including yours.
According to industry experts, Comp-related scams often involve one or more of these “red flags.” Although no one sign should necessarily be cause for alarm by itself, two or more should raise suspicions and could trigger an investigation of the claim:
- Monday morning report of injury. The alleged injury occurs first thing on Monday, or late Friday afternoon, but is not reported until Monday.
- Change in employment status. The reported accident occurs immediately before or after a strike, job termination, layoff, end of a major project, or the conclusion of seasonal work.
- Suspicious providers. The claimant’s medical provider or legal consultant has a history of handling dubious claims.
- Lack of witnesses. No one else saw the accident and the employee’s description does not support the cause of the injury.
- Conflicting descriptions. The employee’s account of the accident doesn’t match with the medical history or injury report.
- History of claims. The employee has filed a number of questionable or litigated claims.
- Refusal of treatment. The claimant declines a diagnostic procedure to confirm the nature or extent of the injury.
- Late reporting. The employee delays reporting the incident without a reasonable explanation.
- Elusiveness. The allegedly disabled employee is hard to reach.
- Instability. The claimant changes physicians, addresses, or jobs frequently
If one of your workers files a claim that has some of these warning signs, be sure to let us know. We’ll work with you and your Workers Comp carrier to check it out.
The chances are that your company relies heavily on one or two people – such as a partner, operations manager, or foreperson – whose knowledge, expertise, or overall contributions are essential. If death put this person out of the picture, where would you find the financial resources to keep you up and running?
The answer: a Key Person Life Insurance policy under which your company receives all or most of the proceeds. This term can also apply to other coverages used for business continuation purposes, including: 1) Buy-Sell or Shareholder Insurance, to reimburse partners or investors; 2) Debt Protection; and 3) Revenue Protection. You can use the funds to replace lost income due to the unavailability of the key person and to recruit, develop, and train a replacement.
The policy’s cash value might be available to your business through a withdrawal or loan, if needed. You can also split the premium and death benefit between the firm and the spouse or partner of the key person to ensure that she or he receives replacement for the person’s economic value to the family (However, these premiums are not tax deductible).
What’s more, Key Person coverage provides a financial asset that enhances the creditworthiness of your company for commercial lending, by ensuring that the business will stay up and running if the key person is out of the picture.
The amount of coverage you need will vary – say, from $100,000 to $500,000 – taking into account what your budget allows versus how much the business would need to survive while you’re bringing a replacement up to speed.
As always, our agency stands ready to advise you at any time.
Chances are that you’d never buy a new truck or front-end loader without trying it out to make sure it could do the job. Do you do the same for the vehicle’s operators?
Safety experts recommend that any employee who will be driving a truck should receive a road test of his or her driving skills before being hired. The examiner should be fully qualified to operate the vehicle, and familiar with the prospective operator’s past experience. The test should include all the necessary skills:
- use of all controls; traffic operations (including backing, parking, slowing, stopping, passing, and turning)
- general driving habits, such as alertness, stamina, and patience
- driving rules and regulations pertaining to the vehicle
- handling the necessary actions/equipment for loading and unloading the vehicle
For each skill or knowledge area, the applicant should receive a pass/fail grade. Each area of weakness should lead to further training or a corresponding limitation in the scope of the operator’s approved activities. Keep records and scores of these tests as documentation in the event of an accident or claim resulting from a driver’s actions.
For more suggestions on the format or content of driver exams, contact your trade association, state department of motor vehicles. Don’t forget the benefits of a solid driver training and testing program in keeping your Commercial Auto insurance rates under control.
Your drivers are taking your vehicles and your insurance coverage on the road every time they get behind the wheel. Wouldn’t it be a good idea to make sure that they’re capable of protecting both?
For more information, feel free to get in touch with or one of our agency’s risk management professionals.
Environmentally-friendly construction, also known as “green” construction, is increasing rapidly in the United States. Concerns about global climate change, U.S. dependence on foreign sources of energy, and rising energy costs are inspiring individuals and businesses to construct buildings with a reduced carbon footprint. This trend has important implications for settlement of insurance claims when green buildings suffer damage.
A green building is one that has met the requirements for Leadership in Energy and Environmental Design (LEED) certification. The U.S. Green Building Council developed LEED in 1998 as a way to help building owners identify and use practical and measurable designs, construction, operations and maintenance practices that are environmentally-friendly. Green buildings are, compared to standard buildings, more energy and water efficient, produce less carbon dioxide, and have a healthier indoor environment.
Some states and municipalities have begun to adopt building codes that require elements of green construction. California has imposed tougher water efficiency standards on new residential construction; New York City is considering more stringent energy-use standards for large buildings. The impact of these requirements on construction costs will vary by location. Green construction might require specialized materials and methods; in the near term, contractors with expertise in these methods may be relatively scarce.
Therefore, in some places the cost of complying with green building codes could be higher than building with standard materials and methods, and that will impact insurance coverage.
The factors that will influence the claim include:
- Whether the green building code applies to new construction only or also to major renovations.
- What the code defines as a “major renovation.” Some codes might consider renovations affecting more than a specified percentage of the building’s area as a major renovation.
- How will use of green building materials affect the building’s appearance? The property owner might lose enthusiasm for a repair if a change in appearance will lower the building’s market value.
- How will the new materials interact with the existing building components? Will integrating the new materials increase rebuilding time and cost?
- Are qualified contractors available in the area?
- Will wait times for green contractors and materials result in costly project delays?
- How does the building code apply in the event of a large natural catastrophe, such as an earthquake or hurricane? Must property owners meet the higher standards at a time when hundreds of properties have suffered damage.
- After a catastrophe, will there be long wait times for contractors to haul away debris because of overwhelmed landfills and recycling centers? Will there be long wait times for building inspectors to visit and approve all of the effected properties?
Standard personal and commercial property insurance policies provide very limited amounts of coverage for ordinance or law” losses — extra costs incurred to meet local building requirements. Additional coverage is available; property owners in areas with green building codes should speak with our insurance agents about options and costs.
Research and publishing company McGraw-Hill Construction has predicted that the market for non-residential building retrofitting with green construction will grow to $15 billion by 2014. Property owners and insurance companies will have to address these questions much more often in the near future; the time to answer them is before the losses occur.
As your business grows, the risks you face become more complex, potential losses grow, along with your insurance premiums. At some point, you’ll need to decide whether it makes sense to turn over the responsibility for risk management to a full-time professional.
Before making this decision, experts recommend that you weigh two key factors: 1) the cost of paying a full-time risk manager, and 2) the potential savings that this manager can generate.
The first element is relatively easy to determine, it’s the salary and overhead of the manager, plus whatever clerical support that he or she needs.
The second item requires you to analyze the extent which a full-time risk manager can:
- Centralize and compartmentalize responsibility for risk management in a single department. This improvement in efficiency should more than offset the increase in administrative costs.
- reduce losses by providing analysis of loss control needs, careful scrutiny of reports, and knowledge of whom to contact for specialized help. Careful attention to loss reserves and adjusting practices can help cut costs dramatically. For example, adjusting liability and workers compensation claims requires special expertise. Insurance companies generally provide adjusters, it’s always helpful to have someone on your team who can evaluate their conclusions.
- help lower your premiums by paying closer attention to coverage criteria, negotiating with agents, brokers, and insurance companies, and using familiarity with industry terminology.
If you’d like our input on making this key decision, feel free to get in touch with the risk management professionals at our agency at any time. We’re here to serve you.
You want your disaster plan, also known as a “business continuity” plan, to be complete, accurate, functional, up to date, and able to meet your recovery objectives. To ensure that you meet these goals, there’s no better way than a “live test.”
You can create buy-in among managers and staff by providing a test scenario that’s specific, realistic, detailed, and comprehensive.
Consider this real-world example: A television communication company in Miami was completing its disaster plan when it learned that a powerful hurricane was headed straight toward Southeastern Florida. Fortunately, because the business had several days’ warning, it was able to implement the plan rapidly and communicate it to employees. Although the company was prepared for the worst, the storm struck to the south and west, near Key West.
Although there was no significant damage in the Miami area, the exercise tested important components of the plan, such as the ability of the business to:
- protect equipment and strengthen the building in a timely and orderly manner
- activate and maintain an alternate transmission site
- test backup electrical generation and other equipment under adverse weather conditions
- communicate emergency technical instructions to affiliate stations throughout the Spanish and Portuguese speaking world
- sponsor a shelter for emergency storm personnel
- release and recall staff in an orderly basis
A post-disaster meeting led to a number of refinements in the plan. Most important, the exercise confirmed the ability of the company to maintain important business activities at a pre-established acceptable level, with minimal impact to its customers and revenue stream.
If you’d like advice on testing your company’s business continuity plan before disaster strikes, just give us a call.
The American Management Association recently reported that only half of the corporations it surveyed had a disaster plan. What’s more, many respondents felt that the time spent preparing a plan was too costly or that they had just never thought about it.
As insurance professionals, we find such news disappointing. After all, a disaster management plan should be a top priority for every company.
The safety of your employees and the future of your business depend on drafting a disaster management plan now. From the loss of key personnel to physical property damage, everything that can go wrong in a serious situation might very well do so. Are you prepared?
Your plan should also include comprehensive insurance coverage. For example,
Once a disaster happens, if you don’t carry a business income policy with, “Extra Expense,” coverage, you will lose money. Maybe even enough to put your business under for good. This coverage kicks in to help you replace lost revenue and expenses to get up and running fast.
For more information on adding Business Income insurance with Extra Expense coverage to your protection package, call our service team today.
Mobile devices are the mighty double-edged swords of today’s workplace. On the one hand, they provide greater integration of information, on the other, they could be your business’s one-way ticket to a catastrophic security breach. This week we had the amazing opportunity to speak with Anthony Kinney, Microsoft’s Verizon Partner Manager, about mobile security and the ways to mitigate data risk in a BYOD environment.
According to Kinney, the three main security risk areas associated with BYOD are:
- Data loss prevention, which has to do with securing the data on a device in the
case of it being lost or stolen.
- Data in transit, which is most often
protected by encrypting information to ensure that all communications between
the device and backend infrastructure are secure.
- Data leakage, which is
about keeping a user’s work and personal information separate. In other words,
“protecting users from themselves.”
We asked Kinney what Microsoft is doing to make sure that moving to a pocket office doesn’t mean introducing security risk. He discussed how our multilayered approach to security makes adopting a BYOD policy far less of a risk, with solutions like Secure boot technology, remote “wipe” capabilities, and automatic cloud storage (among other security solutions).
What makes the greatest difference, however, are the actions a company takes to ensure that their data is secure. The way Kinney sees it, employees jailbreaking and rooting devices is one of the largest risk factors for companies who allow employees to BYOD. What those companies do is implement third-party services to “containerize the data,” so it never actually goes onto the local device.
According to Kinney, Windows Phone solves for this by protecting the data at the data center level before it even gets to the device. This means each document can have specific edit/view/share settings so that when it’s accessed on a mobile device it can’t be ‘saved as’ or forwarded to another cloud service, depending on what the settings permit. This way the phone fully understands the corporate policies on the document, helping IT to provide security—even at the file level.
This level of device integration with your data allows your company to consider a BYOD or CYOD policy without the need for third-party security solutions—which themselves offer another point of potential failure and risk. By working with your existing desktop OS, email, and other systems, the native Windows Phone OS helps mitigate data loss risk for your pocket office by preventing it in the first place.
More and more companies are restricting employee use of personal cell phone cameras on the job for fear that these ubiquitous devices might create legal headaches, lead to job-related claims, and/or compromise company trade secrets.
For example, employees might take inappropriate photos or videos of co-workers without their permission, leading to accusations of sexual harassment or invasion of privacy. Even if the picture-taking doesn’t create legal problems having these images posted online might well embarrass the employees depicted or make them uncomfortable.
Soured relationships in the workplace can also create problems. A disgruntled employee might want to embarrass a boss or gather evidence for filing a legal claim. All sorts of types of images – from a supervisor getting upset with an employee to overall working conditions – could easily become fodder in an employment dispute.
What’s more, if your company has patented products and closely-protected manufacturing processes, any information leaked to a competitor might be extremely damaging.
The best way to deal with this risk is to develop a written policy that controls employee use of cell phone cameras at work, with clear penalties for violations. Determine which workers need cameras as part of their jobs (for example, truck drivers who might have to photograph an accident for insurance purposes). Make sure that employees permitted to use camera phones at work give you the right to review all images and delete any work-related images. You should also prohibit employees from posting work-related photos on line.
The key to success lies in keeping your workers informed about this policy and enforcing it consistently.
To learn more, feel free to get in touch with our agency’s risk management specialists.
Most states allow company owners and executives to opt out of (or not opt in to) Workers Compensation insurance. But did you know that if you choose this option your Health insurance policy might well not pick up work-related medical claims?
If you carry Health coverage through your company Group plan, you can usually arrange to be covered for work-related injuries under this policy – which then becomes “24-hour” coverage for you. However, many small business owners and managers are insured under the Health Plan of their spouse or parents – which almost always exclude work-related injuries.
Let’s say that you exempt yourself from Workers Compensation and have coverage under your spouse’s Health insurance – and you suffer a serious injury in a work-related, at-fault auto accident. Once you have exhausted the Medical Payments coverage under the company’s Commercial Auto policy, the chances are that you’ll have to pick up the tab for the rest of your medical bills. You might even have to choose between limiting your treatment options or going bankrupt (unpaid medical bills are the nation’s leading cause of bankruptcy).
Even if you have “24-hour” insurance under your own Health policy, this coverage will not reimburse you for income lost during your convalescence.
So, what’s the solution? You might consider buying a Disability income policy – or decide to cover yourself under Workers Compensation, after all.
As always, our agency stands ready to offer our professional advice. Just give us a call.