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Insurance Company Financial Stability

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Insurance companies are rated for financial strength.  Why does that matter?

Insurance is a promise to pay future losses.  If the company does not have a future, no payments.  And some losses are going to happen years down the line.

Property losses tend to be settled shortly after they occur.  You owned a building, it burned, the value is usually relatively easy to establish, you are paid for the loss.  The solvency of your insurance company is not of concern because of time, but because property is exposed to catastrophic threats such as hurricanes, which might bankrupt a small insurance carrier which has not prepared properly.

Liability losses, especially large losses, are usually litigated.  That can take years.  If an insurance company becomes insolvent, that will at a minimum complicate and delay settlement and payment.  An insurance company which misestimates its average losses far in the future will be in trouble.

So, how do you assess the strength of your insurance company?  While states review the strength of insurance companies within their supervision, day to day the best measurement is available from private companies that specialize in rating insurance carriers.

Without getting into a long discussion of the relative merits of the rating companies, one of the best is A.M. Best.  Ratings run from A++ to F, with additional notes for the future (stable, negative, favorable).  Here’s a link to Best’s explanation of their financial strength ratings.    You can sign into Best for free to get basic rating information on most insurance carriers.  (Some decline to submit their results for rating.  Not a great sign about the company.)

Or call GBW Insurance at 1-800-548-2329 and we can give you the information.  We are also paid subscribers and are therefore able to access detailed information as well.  www.GBWinsurance.com

Mold environmental issues from Sandy – What’s coming now?

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Here’s a link to a NY Real Estate Journal by Lee Wasserman.  #moldremediation In it he addresses some of the legal issues coming up as responses to the growing concern about mold clean-up and the delayed clean up here at the 6 month mark since Sandy hit.

Lee Wasserman in the NY Real Estate Journal click here

Responding to Slip and Fall Incidents

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Our thanks to CNA Insurance Risk Control for much of this advice.  You can call us at 1-800-548-2329 for more information or skip to the bottom of this page for CNA’s web site.

BE PREPARED FOR A SLIP-AND-FALL INCIDENT
It might be a visitor.
It might be a customer.
It might be your own employee.
But, chances are, you won’t be there to see it should someone slip and fall in a building you maintain.
Sound Planning Can Help
A well thought out plan ensures that injured persons will be treated promptly and puts you in control of the process. CNA has developed these guidelines to help you efficiently manage slip and fall accidents. When a slip and fall happens…
Immediately
1. Offer medical attention.
• Administer first aid at the scene.
• Call for emergency service if needed.
• Suggest a medical provider for follow-up care.
(For employee injuries, refer or suggest a medical provider if doing so is allowed by your state.)
2. Gather and document information.
• Name, address, phone number of injured person.
• Names, addresses, phone numbers of witnesses.
• Injured person’s description of what happened.
• Pictures of accident (floor, spill, etc.).
3. Report the accident.
• Ask your customers to notify you immediately of any slip and falls on floor surfaces you maintain.
• Notify your insurance company of all losses, even if the information you have is incomplete.
Within 24 Hours
1. Contact the injured person (or parent of minor).
• Communicate your concern and verify whether treatment was received.
• In all cases, avoid discussion of “blame.” Assure the injured person that the accident will be investigated.
• Be alert for claimant’s “expectations.” Communicate them to your insurance company.
• Make sure injured employees understand that a claim will be processed for Workers’ Compensation benefits with regard to medical bills and time off from work (if applicable).
2. For injured employees, work closely with the claim department at your insurance company.
• To provide the physician with the injury report that includes all the information you reported.
• To provide the physician with a detailed description of the injured employee’s current job duties.
• To communicate your support in returning the injured employee to work, and to light duty as necessary.
3. For all accidents, determine facts and circumstances.
• Identify specific materials, equipment, or tools involved in the accident and keep evidence in a safe place.
• Do not discard damaged or broken equipment involved in an accident. Keep it in a secure place where it will not be inadvertently put into use or destroyed. Altering, destroying, or discarding it could lead to an adverse finding.
• Develop a plan of action to prevent similar incidents.
• Notify customers of potentially hazardous conditions, which require action on their part for accident prevention.
After the Accident Occurs
1. Maintain an accident injury management record (Call us at 1-800-548-2329 for more information).
Whatever format you choose – a paper filing system or a computer database – your records should include:
• Injury report – include all information reported to the insurance company.
• Log of all communication related to claim
• Dates
• Contacts
• Documentation of discussion
• For employees, information on return-to-work status
2. Notify your insurance company of any new information you may receive or develop.
• About the accident
• About the injury
• About employee work status
• About legal representation or suit filings
Don’t let claims “slip and fall” between the cracks!
Loss Reporting Tips
• These same slip and fall guidelines apply to your customers – you can help by educating them on reporting slips and falls.
• Ask customers to notify you immediately of any incident involving a fall, no matter how minor.
• Make sure your employees know what to do when a fall occurs or if they themselves are injured.
• When an employee does not report for work due to illness, always inquire to see if the absence may be work related.
• Make sure one person is responsible for reporting all losses to your insurance company. Cross train a back-up for that person.
A Note About Fraud

Slip and fall scams take advantage of existing hazards and it’s been proven that they can be staged to collect benefits. These claims require careful management and scrutiny. It can be difficult to disprove allegations of a fraudulent slip and fall.
You can help your insurance company get a jump on fraudulent claims by consistently following these steps:
• Immediate notice of all accidents will help identify and deny fraudulent claims.
• Gathering and documenting evidence and facts while they are fresh will help to successfully defend fraudulent claims.
• Having a plan for medical care will help in getting an immediate, objective evaluation and serve as documentation of the alleged injury.
• Following consistent slip and fall management guidelines will help to accurately identify claims that have merit and those that do not.

Go to www.cna.com/riskcontrol for more information.

7 Steps to help an injured worker return to work…

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When someone is injured in the workplace, both the worker and the employer will be better off if there is a plan in place to get the worker the best care and rehab, both sides know what the plan is, and they follow it. You are aiming for fewer lost days, less wage loss, better employee morale, and a better quality of life for the employee.

If you have more questions after looking at the list below, please give us a call at 1-800-548-2329.

Our thanks to CNA Insurance for this list. While they’re not the only company in the Workers Compensation business, they’re a good company.

Seven Key Steps
1. Ensure prompt access to treatment. This includes making
sure the appropriate first-aid kits are available to the injured
worker; promptly referring the injured worker to your
preferred medical provider; or, in the event of an emergency,
quickly placing a 911 call to the local emergency dispatch.

2. Report the loss immediately by calling, e-mailing or
reporting the injury online through http://www.cna.com.

3. Establish a return-to-work record, which includes: a copy
of the accident report, a job description, initial treatment
documentation, copies of medical bills, progress reports
from the physician and a log of your conversations with
your employee and the physician. This will assist you in
tracking the current claim, and establishes a model for
handling future claims.

4. Provide information to the treating physician about the
work-related injury, including details about the incident and
the employee’s job description, and briefly discuss your
company’s return-to-work policy.

5. Follow up with your injured employee within 24 hours of
the injury. Assure him or her of your company’s commitment
to their well-being. Assess the worker’s understanding of
the treatment he or she received, and respond quickly and
appropriately to questions about future treatment plans
or other general questions. Always be considerate of the
employee’s rights of privacy and confidentiality.

6. Contact the physician within 24 hours of the initial
treatment to obtain information about the extent of the
injury and recommended treatment plans. Also determine
timing for returning the employee to work as appropriate.
Where necessary, the goal is to provide temporary modified
jobs that will take into account your employee’s physical
abilities, skill and interests.

7. Maintain contact with your employee at least bi-monthly
to ensure his or her recovery is progressing as anticipated.
Collaborate with the treating physician for updates on your
employee’s recovery, and to facilitate a smooth transition to
the appropriate job duties.

Social media policies and the NLRB…

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The Acting General Counsel of the National Labor Relations Board recently issued guidance on Social Media Policies in relation to the National Labor Relations Act.  You will find the link to the actual document by clicking here to go to the NLRB site and going to document OM 12-59.

Sadly, the guidance appears to be that employers can not restrict employees’ behavior on social media or in disclosing confidential information. 

Presumably you can carve out a safe policy by making it clear that your restrictions don’t apply to issues subject to the National Labor Relations Act.   You should see your labor legal counsel if you have one, making sure your employee handbook and any other documents are in compliance.  But employers are on the spot with this since the NLRB (especially recently) takes the path of the negative Socratic dialectic in issuing guidance.  That is, you advance an idea and I tell you what’s wrong with it, but I never tell you what would be right.  (Many philosophers have argued that there were some good reasons to kill Socrates.)  

We’re not going to give you labor law advice.  There’s an excellent legal summary of this mess, available through the link at the bottom of this article.  But you should also take a look at your employment practices liability insurance (EPLI) and talk with your insurance advisor about what’s covered.  Or call us at 1-800-548-2329.

Here is the link to an alert from Bressler, Amery, & Ross. Excellent write-up of the problem.  Bressler Social Media and NLRB

Workers Compensation Insurance and taxes: Independent Contractor (1099) or Employee?

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Business owners can hire people as employees or pay them as independent contractors. Getting that distinction right can save you taxes, protect you during insurance audits, keep you out of trouble with your state’s Department or Labor, and help you survive an IRS audit.  Getting it wrong can take you into a nightmare.  

As a business owner or hiring manager, here are seven points to keep in mind when you classify people as independent contractors or employees:

1. Getting it wrong, even unintentionally misclassifying people, can draw penalties and additional taxes due, state labor law penalties.  You can also be audited by your Workers Compensation Insurance company, with additional insurance premium going back three years.

2. Take a look at how the Internal Revenue Service  decides whether a worker is an employee or contractor.  They look at the relationship between a worker and a business. The IRS starts with three factors in determining this relationship:

  a) Type of relationship, which means how both your business and the worker view the relationship.

  b) Financial control; how do you pay the worker? Do you pay by the hour, do you pay by a task or project, do they work for any other company, do you pay the worker directly or do you pay another company for their time?  For Workers Compensation Insurance, the insurance company is going to look at whether you can prove that the worker has Workers Compensation coverage somewhere else.

  c)  Behavioral control; do you set hours, each task, provide tools and computers, starting times, hours worked on a project, provide training?  These and other control questions will be used to decide whether you owe employment taxes and withholding.

3.  Did the worker bid for the job or fill out an application?  Do you have a contract with the worker?  Does the contract refer to a single project or is it open-ended? 

4. Remember that calling someone an independent contractor does not make them an independent contractor, even if they agree with you.  If you direct and control their exact hours, methods, provide the only workplace and equipment they use, you should plan on having to pay them as employees, file tax forms, and withhold taxes as required by law.   Either the business or a worker can ask the IRS to determine whether the relationship is independent contractor or employee.  Take a look at IRS Form SS8 to see what you might have to provide to prove your point. 

5, A worker is likely be classified as an independent contractor if the business directs or controls only the result of the work, not the manner, means, or methods being used to accomplish the end result.

6. Make sure that workers are aware of their classification. This will help them plan for their tax obligations.  Keep in mind that you are trying to avoid the situation where they call the IRS and state Department of Labor to try to claim employment status.   Many workers are happy to be independent contractors until they have a tax problem, or get hurt.

7. You can use the IRS forms, or your state Department of Labor, a labor attorney or, for the Workers Compensation issues, your insurance advisor, to gather information to make a decision on how to classify a worker.  

Here’s the NJ Department of Labor FAQ page which can give you an idea of how they handle classification and eligibility for Workers Compensation benefits.  Give us a call at 973-426-1500 if you’d like advice about New Jersey issues. 

What’s the state of Workers’ Compensation?

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Here’s a link to a presentation by the National Council on Compensation Insurance (NCCI) Chief Actuary in May 2012.  In a word, nationally results are bad for the insurance companies and Workers’ Compensation rates will be rising.  https://www.ncci.com/Documents/AIS-2012-SOL-Presentation.pdf 

In summary, losses are rising, expenses are not improving, medical costs keep rising even though lost time claims are not, and even with price increases insurance companies are losing money.

If you have questions about Workers Compensation in New Jersey, see our primary site at http://www.gbwinsurance.com/workers_compensation or call us at 1-800-548-2329