March 2016 - Get Your Commercial Insurance Questions Answered by Licensed Professionals at My Insurance Question.com

Simple Ideas that can Create a Safe Work Environment

There are several safety procedures a business owner can implement into their business without setting up an official safety program. Official safety programs frequently cost a large amount of additional money. As a workers’ compensation professional one common reason for increasing workers comp premiums is bad management or lack of safety procedures causing unnecessary claims. In a society where it’s becoming increasingly difficult to prove a claim to be fraudulent, it’s more important than ever to prevent unnecessary claims from occurring in the first place. When a business has suffered a claim or several claims in the past (frequency or severity), those claims will follow a businesses workers comp experience rating for several years to follow. This factor is referred to as a businesses work comp experience modification rating.

Find out how to provide a Safe Work Environment at your small business via MyInsuranceQuestion.com

Frequent safety meetings are needed to keep this experience modification rating down. Monday morning meetings are typically the easiest for a business owner and they get the employees on the right track for the upcoming week. Actually a large portion of fraudulent claims occur on Monday? Here are a few things many successful businesses require of their employees.

Talk with your employees about proper lifting procedures
Ensure all employees have proper safety gear
Purchase and require employees to wear basic safety gear
Talk with employees about how to handle tools within the trade properly

As far as the weekly meetings go, if you have trouble coming up with topics to discuss simply ask your employees. They may be able to contribute topics based on their day to day job duties. They can help you analyze what areas they think will cause claims and how the organization can minimize the exposure. These meetings can be short, but they do need to be documented. Your employees need to start the work week off on the correct foot. This can also show you care as a business owner about the safety of your employees.

Business owners being active in the day to day operations are important to the success of any safety program. Being present on the job-site and communicating with the employees help the owners to understand what the employees actually do on a day to day. Being active int he day-to-day operations helps to quickly identify when an employee is doing something that increases their chances of being injured. Being an active owner typically results in the employees paying closer attention to doing the job the right way instead of cutting corners.

Identifying reasons for prior claims and correcting those problems going forward can also help your business control the experience modification rating. If your a business that suffered claims in the past, use the insurance carriers loss report to identify all claims (believe it or not some business owners are not aware a claim even occurred.) Think about and discuss with your staff ways that particular injury could be prevented from happening in the future.

Appoint someone on your crew or within each department as the leader or foreman. Have those key employees assist in the monitoring of the safety program within the workplace. Have those key employees assist with safety meetings, but hold them accountable for their responsibilities. Reward them when they make a difference.

Another good tactic to promote safety is to put up a sign within the workplace in a highly visible area. Remind employees daily that the job place is X days injury free. Give the employees an incentive to reach a certain number of days with no job place injuries. These little things make the employees think about being safe and make a difference.

4 ways your Small Business can prevent a Data Breach

In today’s day and age, there are many ways businesses take and face risks. Some businesses are in industries where they take risks just in the fact that they are open for business. That can be a roofing company who has employees who climb on top of a house on a daily basis. Other businesses face risks in hiring and firing employees, generating enough revenue to stay afloat and most importantly the risk of becoming victim to a data breach. Most business owners do not think twice about purchasing commercial property insurance, but many still hesitate to secure small business data breach insurance. This is a mistake because it does not matter the size nor the scope of your business, every business is a target for being hacked and every business is at risk for a data breach.

Obtain the best information about how to protect your small business from a cyber attack and where to buy small business data breach insurance at myinsurancequestion.com

Two of the largest data breaches in history were Target and Home Depot. Both of those breaches were accessed by first hacking in to a smaller company before gaining access to the larger company. Niether of these businesses had Small Business Data Breach Insurance. In the case of Target, the company was Fazio Mechanical Services and in the case of Home Depot, the company provided credit and debit card processing. These companies had been hacked weeks if not months prior to accessing the system of the larger company. If your business works for any larger business than you could be at risk of being a target for hackers. If you choose to protect your business with data breach insurance this may not be as damaging. Even if your business does not partner with larger companies you could still be a target for hackers just to get the information of your customers. This is a costly risk that you are taking without properly insuring your business and without taking precautions to protect your business. According to the Ponemon Institute it costs a business on average $174 per record. Other studies show it costing more. Taking these numbers in to consideration it would cost your business more than $17,000 for just 100 records being compromised. if that were 1,000 records it would cost $174,000. If that is not a cost your business can withstand than you need to have Small Business Data Breach Insurance Coverage and on top of that you need to be taking the proper steps to preventing this from happening. Here are four simple things your business can do to prevent a data breach.

Train your employees

The prevention of data breaches starts with your new hire training. If an employee is going to be using a computer they need to be trained on how to protect the company from being at risk. Do not assume employees know how to do this. Many employees may be very capable of doing a job for your business that is necessary. This does not mean they are computer savy and are properly trained to protect your business from intruders. Take the time and effort on the front end to properly prepare your employees to defend your business against hackers and it will provide dividends on the back end.

Help each employee protect their work space

Logging out and locking up your desk when away and over night are crucial. Even if the employee is just stepping away to the restroom it is crucial to lock up their devices. In most business environments, there are customers, vendors and other employees who may gain access to your computer while you are away. You do not have to create a culture of mistrust to do this. On top of locking down your devices it is also important to not write down passwords on a post it note or some other piece of paper. It may be rare, but if these passwords fall in to the wrong hands it can cost your business immensely.

Require long passwords

Passwords need to have certain requirements to be allowed. The best way to make this easier for your employees is to give them examples of what you want. here are a few examples of how someone can make a password strong and still make them rather easy to remember.

6h1fl,j2Oc49=

This would be an example of a password that is extremely secure.

BaSeBaLl_2345+6789

This would be an example of a password that is a little less secure, but easier to remember.

JoeSmith or password

These are examples of terrible passwords that should not be allowed.

I like using something similar to the middle password because I can change the word Baseball with the time of the year. In the Fall I might use Football or Autumn, in the Winter I might use basketball or Thanksgiving. This allows me to change the password frequently but not having to remember an entirely new password. There should also be a time period for how frequently a password must be changed. Every 90 days is a good rule of thumb, but many businesses have different requirements based on the needs of their organizations.

Shred everything

In today’s day and age, there is no reason any personal information should ever be disposed of without first being shred. There are outside businesses that can dispose of the shredded material. Some of these businesses will even recycle this paper, which is something you can share with your employees, customers and vendor partners. If any of these groups are environmentally conscious this can be a bonus to them and will add to your credibility as a business.

Workers Comp Opt-Out Programs

In recent years, a small number of states have considered implementing an opt-out option for workers’ compensation insurance for certain employers. Workers’ comp insurance is compulsory in every state except Texas (some states have exceptions for employers with just a few employees). Essentially, opt-out programs allow generally large employers to provide an alternative form of work comp benefits from the statutory defined benefits enacted in a given state. Oklahoma enacted their current workers comp opt-out law in 2013. There is at least some consideration in Tennessee and South Carolina to adopt similar programs (however, these alternative plans are currently on hold in both Tennessee and South Carolina due to concerns raised in other states such as Oklahoma).

Stay up to date on the South Carolina Workers Compensation System at myinsurancequestion.com

As recently reported in the below story, the Oklahoma Workers’ Compensation Commission ruled part of Oklahoma’s current law to be unconstitutional:

There will likely be a final determination of this ruling by the Oklahoma Supreme Court.

Workers’ comp insurance is designed to be an ‘exclusive remedy’ for employees injured on the job. This is generally the case when employers’ carry workers comp insurance (where as employers without workers’ comp insurance bear the risk of being financially responsible to employees injured at work). This system is designed to control costs for employers with respect to workplace injuries, whereas without statutorily defined benefits, employers would be routinely subject to litigation related to on the job injuries.

Most opt-out programs are conditioned on the premise that workers injured on the job will receive equal or better benefits under the alternative program as they would if their employer participated in the traditional workers’ comp system in a given state. In Oklahoma, there is criticism that the definition of workplace injury is varied by companies that decide the workers comp opt-out option from the traditional workers’ comp system. For example, the article above indicates the Dillard’s department store’s alternative benefits plan considers injuries arising from exposure to asbestos on the job as a non-covered injury. On the other hand, statutory worker’s comp laws cover injuries arising from workplace asbestos exposure.

At a minimum, the Oklahoma Workers Compensation Commission’s decision highlights a legitimate concern with respect to opt-out programs. In other words, it seems reasonable to assume that certain employers might at least attempt to provide less benefit than statutorily defined benefits if allowed and they could get away with it.

It will be interesting to see how this trend develops nationally. It is important that injured employees maintain the right to have adequate and efficiently provided benefits. It remains to be seen whether alternative programs can accomplish that or not. Self-insurance has clearly worked in certain situations, so it’s possible the system can still work or even improve with less regulation. However, if not done correctly, there is also substantial opportunity for alternative programs to be manipulated by large employers with substantial negotiating leverage.

Business Loss of Income Coverage

Business Loss of Income Coverage is an addition to a Commercial General Liability Policy. It can be added to a Business Owners Policy (BOP) for as little as a few hundred dollars, depending on the size of your business. It covers the loss of income from damage to your building that results in a slow down or suspension in business. For many business owners; this coverage may not seem all that necessary, but when an incident occurs this coverage can many times be the difference between a business reopening or closing for good.

The most basic way a need for this coverage occurs is when a building catches fire. When this happens, the general liability and commercial property policies will cover a businesses expenses to repair the building to its previous condition. These policies will not pay to cover loss of revenue if your business is slow or suspended for an extended time. This can be thousands of dollars depending on how long your business is closed.

As a business owner it is important to realize that a Business Loss of Income Policy only kicks in if the loss is a covered loss. Meaning that if the loss occurs from something like an earthquake or flood; and the business does not have special coverage for that peril, than the business loss of income policy does not kick in. This is important to note in areas that have natural disaster risks. Examples of this are Florida for hurricanes, California for earthquakes, Missouri for tornadoes, everywhere for flood risks. Another risk that is associated with Business Loss of Income is Data Breach. When a data breach occurs it very likely can cause you to be closed for a certain amount of time while the data breach is dealt with. If you have Data breach Coverage in place than this will be a covered peril. If not the Business Loss of Income will not kick in and you are liable for the additional loss of revenue.

When a business owner decides to add this coverage the important thing to consider is how much risk you are willing to take and determine if that risk is worth the amount you save in premium. For most businesses this coverage can be added for a few hundred dollars. If it is added to a business owners package it can be even less. In most cases this cost is well worth the benefit you get when an occurrence does happen. In most instances, when a devastating accident occurs and a business does not have this coverage, the chances of them ever reopening are far less than if they have this coverage.

Construction Contracting risks for Workers Comp Quotes

Are Construction Contracting Risks hard to quote or impossible?

Working with artisan contractors for commercial insurance can be an exciting struggle. The benefit of working with companies that build or fix our homes and businesses every day is a rewarding challenge. That challenge can be tough to explain. Especially to someone who is just wanting to get their business quoted and move on with their day or with some one who has never experienced a claim. Below are some key things to consider when helping business owners search for commercial insurance.

FInd out just how difficult it is to get Workers Compensation Coverage for some contractors.

Why is contracting so hard to quote?

Contracting companies or Construction firms that perform building work represent some of the highest risk industries. They represent such a high risk because of the nature of work that is being performed. This means the potential for a claim to take place is high and the potential severity of that claim is also extremely high. Meaning the possibility of the claim taking place is high and when the claim happens there is a good chance it would be a severe and expensive claim.

What are the types of things that will cause a claim?

Construction and contracting see a variety of claims causes that make it a little scary for an insurance company. They are unique in that they have the ability to see virtually all types of claims you would see. Slip and falls, lifting strains, repetitive motion claims are ones any basic shop operation could have. Contractors also perform work outside of their shop, so motor vehicle accidents become a concern. Falls form heights can be one of the biggest concerns that can make a huge difference for most contractors wanting to get out of the state fund and with a competitive market carrier.

How can I set my firm apart from the rest?

As an Insurance Agent that specializes in hard to write workers comp, my approach when tasked with quoting a difficult scenario is to focus on the primary concern and risk. As a business owner, the first thing you want to look at is the biggest risk you have to your company which in turn will be the biggest risk to your workers comp carrier. The three biggest concerns being falls from heights, motor vehicle accidents and lifting exposures. This means any way you can limit the exposure or minimize the impact of these the better chance you have of getting quoted. Below are areas that you can look at:

As for height exposures: What is the maximum height in feet you work off ground level? The lower the number the better, but if you are doing work above ground level it is important that you know what the level is. Having a hard cut off point is important. Most importantly, how much opportunity do you have for work higher off the ground. If most of your productive work is less than 10 feet off the ground, but one small job a year is 25 or 30 feet off the ground, You may need to ask the business owner if it is worth paying more for insurance just to work this one job per year? Besides limiting operations, the business owner needs to comply with OSHA tie off requirements and they need to have strict protocols regarding work performed off ground level in their written safety program.

As for Motor vehicle accidents: Are you doing most of your construction work local or long distance? If working outside your local area, do you have multiple locations or crews based in different areas? This can sometimes be a way to limit having employees travel farther and limit your exposure. Besides limiting the travel area, check Motor Vehicle Records on all employees who will drive at time of hire and at least once per year. This is standard for most companies and your Commercial Auto Carrier is likely going to do this anyway. Reviewing and removing higher risk drivers from your driver list can help you with workers comp. Of course, it will save you money on your commercial auto policy ass well if you have one.

Lifting exposures: Generally, are your employees lifting over 50lbs on their own? If so, find a different alternative to lifting like a dolly or something to assist in the lift. That can also be a mechanical hoist or a 2 wheeler to move heavy items. It could also be requiring team lifting for objects over a certain weight. All of these strategies can limit this risk for your business. Safety programs are crucial to have in place for businesses dealing with heavy lifting. Accidents are eventually going to happen and when they do, a well-documented safety program can be the difference in being dropped for your carrier or not.

Working to improve these areas can help with many things for your construction business. Employees will see that you care for their well being, which in itself can be helpful in the quoting process. The safety protocols will help reduce your employees risk of a workplace injury and in most cases this can help the business get better, more aggressive quotes for workers comp insurance. I have seen in many states this savings can be over 50% for a carrier who has to go to the state fund vs the competitive market quotes. That’s like getting a half-off coupon for your workers comp.

Why does my class code matter?

Workers Compensation Insurance is required by law in 48 out of 50 states. It is offered based on a classification code system developed by the National Council for Compensation Insurance. There are more than 700 industry specific classification codes. Some industries have just one, some have many. For this reason, it is very important for business owners to take a few extra moments and speak with their insurance agent when buying or renewing their commercial insurance policy. It is crucial for a business owner to talk to their agent about the daily operations of their business. The key to getting the best policy on the best insurance package is to speak open and honestly with your insurance agent.

Remember that your insurance agent is on your side. They are there to help you get the fullest coverage at the best price possible. Your agent can only do this if you give them all the information possible to negotiate on your behalf with the insurance carriers. This is where having an agency that has the ability to quote your policy with many carriers is important. Some agencies only carry policies with a few select carriers. If your business is in a difficult to quote classification code than this can make it difficult to get a better price or get any coverage altogether. So having a relationship with an agency that can quote from a variety of carriers is important.

Next it is also important to ensure your agent and your carrier are aware of all the operations your business does and does not partake in. This can cause you to overpay or underpay on premium. Regardless of the amount of risk your business takes, it is very important to be classified correctly in the proper NCCI classification code. There is an audit of your business done at the end of every term. Usually if your business is coded incorrectly it gets caught during the audit. If you are actually supposed to be in a riskier code than you will end up owing more in premium. If you should be in a less risky code it can result in a refund, but you have been paying more in premium throughout the year. Typically, that is cash flow you could be using for other more urgent business needs.

A few industries that give us some perfect examples of industries that have classification codes that could be incorrectly coded are landscaping and commercial vs. residential cleaning companies. For example, landscaping has two class codes 9102 and 0042. 9102 is for businesses that only maintain existing lawns. 0042 is for businesses that install lawns, plants and other beds. 0042 is more dangerous. Because it is a riskier classification code the premium for these types of businesses is higher.

commercial and residential cleaning companies include the classification codes 9102 and 0042.

Another example of an industry that has multiple classification codes is the cleaning industry. Commercial cleaning is classification code 9014 and is the less risky class code. Residential cleaning service companies are class code 0917 and they cost more. The reason for a larger risk in the residential industry is because of the fact the employees are driving to one or more off site locations. Commercial cleaning companies typically have employees come to one location, like a mall, and clean one or more business at that one location. For residential cleaning companies, they are liable for any injuries that occur while the employee is driving to and from the different locations. These types of injuries may not be frequent, but when they do happen they tend to be much more expensive than a simple slip and fall while cleaning a building.

So the most important things any business owner can do to ensure they are classified correctly is to speak open and honestly with their agent about the what their business does and does not partake in. Again, this can prevent both over and under paying on premium. Regardless of whether you are in a a fairly risky class code like landscaping or you have a bunch of employees who sit around an office all year, it is imperative to have your business classified correctly. This can prevent your business from over paying throughout the year or from having a surprise when you are audited at the end of your term.

What are Workers Compensation Credits and Debits?

When purchasing Worker’s Compensation Insurance there are two factors that can change your rate, credits and debits. There are credits, which help lower the price you pay, and then there are debits, which bring up the price you pay. There are a few things you need to understand in order to read a quote and declarations page with a little more confidence. This can help you as a business owner more confidently shop for workers’ comp coverage.

DEBITS

There are a few different reasons that you will find a credit and debit on your account. When a debit appears on your statement, the first has to do with whether or not the insurance carrier actually likes the aspect of the business they are writing. In other words, there are policies that carry greater risks for the insurance company. For example, carriers find it safer to cover a clerical worker than a HVAC contractor. One of the ways that a carrier will become more comfortable offering a quote is to add a debit, thus increasing the amount you pay to potential offset losses from injury.

Credits and Debits are an essential part of your workers compensation insurance policy. The biggest reason you will see a debit added is due to your businesses claims history. Some companies are better at managing injury and promoting safety. For example, companies with safety programs, return to work programs, and prompt reporting of claims generally have less claims than a company that never focuses on how to keep a safe environment for workers. Having these programs in place can help you obtain credits, which we will discuss shortly. Simply put the more claims you have the more you are going to pay in work comp premium.

Finally, another reason for debits has to do with the industry itself or the carrier that is on your policy. If the carrier is hurting from having to pay out a lot of claims all at once they may try to make up for the increased cost by assigning debits to certain classes of business. The other factor is the insurance industry itself. Depending how long you have been in business you may have been through the cycle of premiums going up and down. Multiple carriers and the amount of claims drive this across the entire workers’ compensation landscape. This is common in a state like Florida after a hurricane hits or in the northeast after a year in which there was a lot of damage from winter storms.

CREDITS

Credits are a discount off your policy. An example might be a 15% credit on a $1000 policy would take the annual premium down to $850. Most carriers can offer up to a 40% discount to qualified policyholders. The key to making sure that your business gets all of the credits it is entitled to is by making sure you have a strong safety program and a clean history of losses.

There are automatic discounts that you can see due to premium size as well. These are called premium credits or discounts. This is generally set up in a tier system, such as $0-$5,000 or $5,000-$10,000 etc.

The best way to get credits is to provide as a detailed description as possible about what your business does, but also give detailed examples of your safety programs. Showing how you go about keeping a safe and injury free work environment can go a long way to help you secure the largest credit for your business.

I hope this helps you understand just a little bit more about the declarations page when you are trying to determine the exact breakdown of your premium. It’s not always about rates

6 ways to save when shopping for Workers’ Comp Insurance

Workers’ Compensation is one type of insurance that is required by law in nearly every state in the country. Because of this it is imperative that all business owners take advantage of every way they can to save on this required coverage. There are a few things business owners can change about their daily operations that can have a noticeable effect on what they pay for worker’s compensation insurance.

Keep a well-documented safety program.

Keeping a well-documented safety program includes a return to work program for injured workers and a detailed driver safety program if you have workers who will be driving as part of their normal work related duties. Safety programs do not have to take a lot of time away from your normal business routine to help you save your business money. It can be as little as a 15-minute huddle once a week. The meetings do need to be regular, but they can be weekly, bimonthly, monthly, whatever you determine is best for your business. Attendance should be recorded as well as the subjects covered at each meeting. A well-documented safety program can really benefit your company when you do have an injury. If you have a well-documented safety program in place than your agent can speak with your insurance carrier and defend your business as one that is taking the needed steps to limit claims. If you have these programs in place the agent can more easily show the injury as more of an outlier and not a sign of trouble ahead.

Make sure you are in the proper classification code

Being placed in the wrong classification code happens more frequently than one might imagine. This can change what you pay in premium both positive and negative. There is an audit at the end of every term so this can cause unexpected costs at the end of the year for many businesses. Landscaping is a good example of an industry that has two classification codes that are much different in price. The two main classification codes for landscaping are 9102 & 0042. 9102 is for businesses that maintain already existing lawns and garden beds. 0042 is for businesses that design and install lawns and beds. This is a more dangerous undertaking and costs more in premium. If you are not crystal clear with your agent what your business does on a daily basis, they may assume you are in a riskier classification code. This can cause your business to pay more in premium than it has to. This can be a problem even if you pay too little because an audit is run at the end of every term and if you are than classified correctly, any premium that is owed will then be due.

Actively ask your agent for approved credits and discounts.

Credits and discounts are available for many industries. They are offered by the state and the individual carriers to help business owners save on premium. Your agent has to ask for them in order to get the full amount of discount possibly available. If you bring this to their attention as a priority early in your interaction with them they will know to actively seek the best price. Insurance Agents have to deal with many business owners on a daily basis and the priorities of each business owner may be very different. Many business owners value their time above anything else. These business owners may rather pay a little more in order to just have the process over. If price is an important determining factor in your choice to buy commercial insurance, then let your agent know this up front. That way they can actively seek out every credit or discount available.

Price shop, but do it carefully.

You should always shop your policy around to make sure you are getting a competitive rate. This is the first thing to do when you want to save on commercial insurance. Switching for a moderate discount is not advised. This becomes important when your business inevitably has a claim. Your business will have a claim at some point in time. If you are a customer that has been with the carrier for several years, they are less likely to raise your rate on decline coverage of you altogether. If you are a business that switches carriers every year for a modest decline in price than you are much more likely to be dropped from coverage when a claim does occur. If you are dropped from coverage and cannot find insurance from another carrier than you are forced in to what is called the state fund. Policies in the state fund are much more expensive and depending upon your state once you are in the state fund you must remain there for 2-4 years.

Have an informative website.

A website is beneficial to your business in more ways than just marketing. When you are applying for commercial insurance your agent is going to ask several questions about your daily operations. They are going to investigate it and so is the underwriter of the insurance carrier you are getting a quote from. If you tell them, you only do one type of business and your website shows you are doing something else than you better be prepared to explain what you do or do not do on a daily basis. On the contrary if you have a website that confirms what you have told your agent it will strengthen your relationship with them. This will help when and if you have a claim and need them to help you explain what happened to your insurance carrier.

Consider changing the limits to your policy

The limits of your policy are important to protect your business, but they are not set in stone. They are not the same for every business owner either. Some business owners want to protect their business fully. Even protect it beyond what could imaginably happen to their business. Other Business owners are quite comfortable taking on more risk. If you are one of those business owners than lowering your limits is one way to lower what you pay in premium. Now most carriers will have a minimum amount you have to take, but if you are above those limits it may be worth your while to speak with your insurance agent about the pros and cons of lowering those limits. As long as you are making an informed decision and you know the risks you are taking lowering the limits of your policy can be an effective way to save on premium.