Workers’ Comp System Faces Many of the Same Problems As Health Care

Many of the same problems that plague the U.S. health care system are spilling over into workers’ compensation, including rising costs, an increased incidence of potential injuries brought on by an aging workforce and the obesity epidemic, and regulatory uncertainties. In a speech at the 62nd Workers’ Compensation Educational Conference, Robert Hartwig, president of the Insurance Information Institute (I.I.I.), outlined these and other challenges facing the workers’ compensation system over the next 10 to 20 years.

Hartwig first applauded businesses’ efforts that have radically reduced the frequency of workplace injuries in America. Successes on this front have-

·   Helped companies remain productive, by lowering the number of future lost workdays that result from permanently disabling injuries or fatalities.

·   Increased and preserved worker incomes-Seriously injured workers have lower lifetime earnings, a higher incidence of bankruptcy, and increased dependency on public assistance.

·   Maintained and improved the quality of workers’ home life-Seriously injured workers experience a higher incidence of divorce, substance abuse and depression.

Hartwig then turned his remarks to problems facing the workers’ compensation system-

·   The never-ending cycle of reform, fraud and abuse, which will be an endless driver of costs in the future.

·   The shift in balance between medical benefits and wage replacement-In 20 years, he predicted, 80-85 percent of workers’ compensation benefits will be medical, and only about 15 percent will be for wage replacement. As a result, the workers’ compensation system will face the same problems as the health care system, but even more so, because the workers’ compensation system doesn’t have the same tools to control costs, such as deductibles and copayments.

·   The aging workforce-Fatality rates for workers ages 65 and older are triple that of workers ages 35-44. The workplace of the future will require a complete redesign to accommodate the surge in the number of older workers.

·   The obesity epidemic-In 2006, the most obese workers filed twice as many workers’ compensation claims and had 13 times more lost workdays than healthy-weight workers.

·   Regulatory issues-Health care reform will be a major theme in the 2008 elections, as it was in 1992, when proposals surfaced that workers compensation be rolled into the general health care system. This could happen again.

Though this information is sobering, Hartwig urged businesses to use it to their competitive advantage and work to head off problems before they occur, and not wait until injury patterns emerge to take action. 

Internet Usage Spells Trouble for Drivers

Driving distractions come in many shapes and sizes. Between phone calls, text messages, Internet, television screens, unruly children, and distractions on the road, it is a wonder we ever arrive safely from Point A to Point B.

In November of 2010, State Farm created an online survey to gain a better understanding of what distracts drivers from their most important task at hand – driving. The survey went to 912 drivers who reported that they drive at least an hour per week, own a smartphone, and have a valid driver’s license.

Of those surveyed, 19% admitted to Internet usage while driving. Here are the top five internet activities that driver’s engage in:

1) Searching for and reading driving directions

2) Reading E-mail

3) Looking for specific information of immediate interest, such as where to find a restaurant

4) Reading/Updating social networking sites such as Twitter and Facebook

5) Writing/sending an e-mail

When asked about when their internet usage occurs, drivers responded:

*When stopped at traffic lights

*During heavy traffic

*When driving alone

*During daylight hours only

*On long highway drives

The survey further reports that about 40% of the U.S. population currently owns a smartphone, and this statistic equates to many distracted drivers on the road at any given time. Studies show that the increasing use of smartphones, especially among young adults, increases the risk of crashes. And there is an ever-growing need to remind yourself and the ones you love to put the phone away while driving.

Driver Survey Identifies Practices That Can Significantly Lower On-The-Job Injury Frequency Rates

The best way to prevent fleet crashes and in the process lower injury frequency rates is to hire drivers based on their ability and past performance. This discovery comes from Liberty Mutual Group, which recently released the results of its annual trucker survey.

As part of the study, the company identified practices in seven key areas that contributed to lower injury frequency rates:

1.   Management Programs

·              Most companies that measure injury frequency rates have lower frequency rates.

·              Those companies that conduct driver surveys had frequency rates 18 percent lower than those that didn’t conduct surveys.

·              While most companies conduct injury investigations, those that use written injury investigation forms, ask for prevention recommendations, calculate injury rates, set injury rate goals and track injury rates by customer had a 13 percent lower injury frequency rate.

2.   Expectations

·              Four out of five companies have a written seat belt policy and close to 50 percent have both a written seat belt policy and enforcement activities. Those with both the policy and enforcement had a crash injury frequency rate that was 33 percent lower than those that didn’t use both.

3.   Selection

·              Four out of five companies use a hiring checklist to document each step of the hiring process. Those using a hiring checklist had 30 percent lower injury frequency rates.

·              Four out of five companies have job descriptions that include essential job functions. Companies including essential job functions in the job descriptions had an 11 percent lower injury frequency rate.

·              Four out of five companies designate a medical provider. Those using designated medical providers had slightly lower injury frequency rates.

4.   Monitoring Performance

·              Companies that provide technology for driver managers so they can verify available hours of service for drivers had a 37 percent lower crash injury frequency rate.

·              One out of four companies have GPS and use it to monitor speed. These companies had a 15 percent lower crash injury frequency rate.

·              Two out of three companies conduct road observations. This practice results in a slightly lower injury frequency rate.

5.   Transitional Work Programs

·              One out of four companies had someone responsible for tracking employees out of work and had written transitional work job descriptions. The group using both had a 7 percent lower injury frequency rate.

6.   Injury Prevention

·              Most companies offer some form of injury prevention activities. Those that use an injury prevention manual, provide regular training and have observations for enforcement had an injury frequency rate that was one-third of those that do not.

7.   Training

·              Three out of four companies use written agendas for training. While written agendas are important, the survey found that injury frequency rates went down as the training group size became smaller. Those with written agendas and one-on-one training had a 30 percent lower injury frequency rate.

House Fires do Happen: Take Steps to Prevent a Fire in Your Home

According to the American Red Cross, 80% of Americans don’t realize that home fires are the single most common disaster in our country.  In fact, each year fire kills more U.S. citizens than all other natural disasters combined. However, most people aren’t aware of this because house fires are “silent disasters,” seldom receiving the same publicity as floods, hurricanes and earthquakes.

Another little known fact is that very few fires are caused by natural events such as lightning or static electricity. The American Red Cross says that faulty appliances and faulty wiring cause the greatest number of house fires. The second most common source is heating devices such as kerosene heaters, wood stoves and fireplaces. These devices cause fires when furniture, boxes or clothing are placed too near to them, and the material overheats and bursts into flames. Although human error is often the catalyst for house fires, human preparedness can prevent them.

Here are some tips to keep your family and property safe:

* Purchase only quality household equipment that has been tested by Underwriters’ Laboratories (UL) or other appropriate testing facilities.

*Be certain that  household equipment is installed by a technician who has been trained how to properly install, and also knows the appropriate building code requirements for the installation.

*Have your electrical wiring and heating periodically checked to be sure they are in proper working condition.

*If an appliance is behaving erratically, don’t operate it.  Instead, call a qualified repairman to find the problem and correct it.

*Control the amount of combustible material in your home by removing cardboard boxes, newspapers, old mattresses, rags, leftover paint and other items that are no longer in use. In fact, you should periodically inspect the attic and the cellar to be sure that you aren’t storing any combustible materials that should be discarded.

*Check the type of wall finishes in your home to ensure they aren’t conducive to spreading a fire. Plaster and gypsum board retard fire growth. Plywood paneling made of compressed wood pulp, known as beaverboard, accelerates the spread of fire in dwellings.

*Place fire extinguishers so they are readily available in the event a fire starts. It is important to understand what type of fire extinguisher to use:

-Class A extinguishers can be used to put out fires in wood, rubber, cloth, and paper.

-Class B CO2 or foam-filled extinguishers can be used for fires in flammable liquids, greases and gases.

-Class C CO2 or foam-filled extinguishers can be used for fires in energized electrical equipment.

-Halon can be used on any type of fire.

*It is of utmost importance to put a smoke detector in every room.

*Schedule regular practice fire drills. Be sure children are completely familiar with the correct way to evacuate in the event of a fire.

*Don’t let your family be the victim of this “silent disaster.” Become familiar with these fire prevention tips and put them into practice.

CERCLA Rights to Sue for Clean Up Costs Reinstated

In the case of United States v. Atlantic Research Corporation, the Supreme Court ruled that potentially responsible parties (PRPs) that voluntarily clean up contaminated sites may sue other PRPs to recover their cleanup costs under section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The reinstatement of this right comes after many years of federal court battles over the issues of authority and methodology for recovering cleanup costs from other PRPs.

When CERCLA was originally enacted, the courts interpreted section 107(a) as providing a method for PRPs to recover their costs from other PRPs. However, in 1986, Congress enacted the Superfund Amendments and Reauthorization Act (SARA). Section 113(f) of this law outlined explicit means for PRPs to pursue contribution from other PRPs. After the enactment of SARA, some federal courts held that section 113 was the only remedy for cleanup cost recovery. Other courts prevented PRPs from suing under section 107 of CERCLA and expanded section 113 to allow PRPs’ contributions without the need for a suit.

Section 107 makes PRPs liable for “all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe” and “any other necessary costs of response incurred by any other person.” In Atlantic Research, the United States argued that the section 107 use of “any other person” was limited to suits brought by “non-PRPs.”  That meant that Atlantic Research, a PRP, was barred from filing suit. The Supreme Court held that all the words of the statute must be “read as a whole.” They added that using the United States’ reading of the language would decrease the number of plaintiffs permitted to sue to almost zero, which would make Section 107 worthless.

Section 113 prohibits claims against PRPs who have satisfied their liability to the United States or a state in an administrative or court approved settlement. In Atlantic Research, the United States argued that permitting PRPs to seek recovery under section 107 negates the protection offered to PRPs who have settled under section 113. The Supreme Court conceded this. However, the Court stated that this “supposed loophole” would not discourage settlements because district courts would take into account any earlier settlements when assigning the level of liability to the various PRPs involved.

The Supreme Court also ruled that section 107 and 113 provide two “clearly distinct” remedies. Section 107 permits PRPs to recover cleanup costs they have incurred from other PRPs. A PRP that has satisfied a settlement agreement or court judgment under CERCLA may pursue contribution from other PRPs through section 113. The Court made clear that simultaneous recovery under section 107 and section 113 is not allowed. PRPs can’t choose their method of recovery. The appropriate remedy will depend on the circumstances in each case.

Four Tips to Keep Your Teen Driver Safe when You Aren’t in the Car

Newspaper columnist and author Erma Bombeck once humorously advised parents to never lend a vehicle to anyone to whom they’ve given birth. If only life could be that simple. Most parents don’t find deflating the tires and locking away the keys from their teen driver a feasible approach and will eventually let their teen driver borrow the car.

Just because you’ve decided to let your teen get behind the wheel doesn’t mean that you want to hand the keys over haphazardly. There are several things that you can do to prepare your child and help relieve some of the uneasiness you might feel.

1. Enroll in a motor club.

One of the most important features is that the emergency roadside service you pick offers 24/7 roadside assistance. Your teen will then be able call for professional help whenever he/she might need it. You may also consider asking your motor club if they offer emergency roadside services for when your teen is riding in a friend’s car.

2. Have a candid conversation with your teen about driving.

You’ll never know your teen’s knowledge and attitude about driving if you don’t talk to them. Although the graphic details of what can happen when speed limits, stop signs, signal lights, and roadwork cautions are ignored might not be fun topics, it’s important for kids to know the consequences of their driving actions.

You’ll also want to establish ground rules for using the car, such as how many passengers will be allowed, what time it should be returned, and where it can and can’t be taken. Keep in mind that some state laws will dictate the answers to some of these questions.

Another topic of discussion should be drinking and driving. No parent wants to believe that their sweet and levelheaded child would be the type to drive intoxicated, but the reality is that even good kids can be foolish or succumb to peer pressure. Make it clear that you’ll have zero tolerance for both drinking and driving -and- riding with someone else drinking alcohol. At the same time, you’ll want your teen to know beyond a doubt that they can call you anytime they get into a bad situation and you’ll be there to come pick them up.

3. Purchase a global positioning system.

A GPS is a device that you can install to apprise you on the location of your vehicle and teen. You will establish a radius of operation for the device. The GPS will alert you if the teen takes the vehicle outside of your set radius, is driving the vehicle beyond their curfew, and if they break the speed limit.

4. Purchase a speed-monitoring device.

This device, also called a governor, restricts the fuel injection of the vehicle. This restriction prevents the vehicle from going over a certain speed. In addition to standard GPS and governor devices, there are also much more expensive high-tech options like tiny on-board drive cams that capture risky driving behaviors on video.

If you feel like you’re being intrusive, just keep in mind that NHTSA data shows the crash rates for drivers between 16 and 17 years of age are nine times that of an adult driver. As your teen driver becomes a more experienced driver and develops safe driving habits, you can always reconsider your approach.

Duke Study Says Obese Workers File More Worker Compensation Claims

A Duke University Medical Center study revealed that obese workers filed twice the number of workers’ compensation claims as non-obese workers. In addition the over-weight workers had 7 times higher medical costs from those claims and lost 13 times more days of work from work injury or work illness than did non-obese workers.

The results of the study were published April 23, 2007, in the Archives of Internal Medicine.

The researchers looked at the records of 11,728 employees of Duke University who received health risk appraisals between 1997 and 2004. Duke ordinarily gathers this information anonymously as a way of identifying potential areas of occupational risk in order to develop plans to reduce that risk. The analysis covered a variety of occupational titles, such as administrative assistants, groundskeepers, nurses and professors.

The study compared the relationship between body mass index (BMI) and the rate of workers’ compensation claims. BMI assesses a person’s weight in relationship to their height, which is why it is considered the most accurate measure of obesity. For Americans, a BMI of 18.5 to 24.9 is considered normal; 25 to 29.9 is considered overweight, and 30 and above is considered obese.

The researchers discovered that workers with a BMI greater than 40 had 11.65 claims per 100 workers, compared with 5.8 claims per 100 workers for employees with a normal weight. They also found that obese workers averaged 183.63 lost days of work per 100 workers, compared with 14.19 per 100 workers for employees of normal weight. The average medical claims costs per 100 workers was $51,019 for the obese and $7,503 for the non-obese.

The study showed that the body parts most susceptible to injury among obese workers were the lower extremities, wrist or hand, and back. The most common causes of these injuries were falls or slips, and lifting.

The researchers concluded that their findings were applicable to the community as a whole, since the demographics of Duke closely reflect the local area. They plan to use the Duke population to help the community, so the solutions they devise can benefit the community as a whole.

However, the primary message they hoped to deliver is that the solution to reducing the burden on workers’ compensation involves eliminating both individual risk factors such as obesity and the risk factors within the workplace that cause injury. By targeting obesity and workplace risks simultaneously, businesses can reduce absenteeism, increase the overall health of workers, and decrease the cost of health care.

Know What Red Flags to Look for when Purchasing Your First Home

According to the National Association of Realtors, most average home buyers look at 10 to 12 homes before making a purchase. However, some can painstakingly look for months, even years, before finding the one.

With such a long and tiring process, it’s very easy to get starry-eyed when you finally find the house with the perfect exterior, outdoor space, paint, room sizes, and so forth. Within a month, you’ve bought and moved into your new home. It’s at this point that you discover the roof is leaking and the foundation is cracked; suddenly, everything isn’t as perfect as you imagined.

A lot of homebuyers, especially those buying their first home, get caught up in a situation just like the above by focusing most of their attention on all the pretties and easily fixed dislikes of a home. All the red flags that signal the house might be more expensive or more trouble than it’s worth are overlooked or ignored. That’s not to say that your perfect house should be nixed for having a few flaws, but you do want to avoid having one of the largest purchases you’ll ever make turn out to be a lemon. Here are a few tips on some common problem areas:

1. Foundation

Foundations are one of the most expensive repairs facing a homeowner. Therefore, it should be one of the first things a homebuyer checks. Look for any cracks in the stone or concrete basement walls, brick fireplace wall, around all windows and doors, and along the outside brick veneer. These can be the first sign of an structurally unsound foundation and should be further inspected by a professional before the home is purchased.

2. HVAC

If the home has HVAC to heat and cool it, then make sure to ask about the system’s age and operation, look for any poorly connected vents, and watch and listen as the unit runs. Minor issues with the system can reduce how energy-efficient the home is and increase electric bills, while a total replacement can cost several thousand dollars in immediate expense.

3. Electrical

A home built in or before the 1930’s could still have knob-and-tube electrical wiring. This can be a problem if it has been tampered with, such as from attic insulation being blown-in atop the wiring. Such tampering can create dangerous fire hazards. Furthermore, most insurers don’t consider this type of electrical system safe and will charge you higher premiums or turn you down entirely. Keep in mind that rewiring the entire home will be a multi-thousand dollar expense.

4. Water Damage

Homes that have had water damage or leak issues might be hiding several expensive fixes and dangerous health issues like mold. Look for the signs of past leaks, such as any brown or white stains along the basement, main level, and upper level walls; mold growth under sinks; and horizontal stains along any bare floors. While fresh paint, especially in a basement, may just be updates, it could also be designed to hide the stains of water damage.

5. Look Twice

The first walkthrough of a home is often with rose-colored glasses. Even if you want to make an offer, take a few days to collect your thoughts and return to view the home at least one more time.

6. Pricing

There’s a big difference between getting a good deal and coming across a home with a price too good to be true. Suspiciously priced homes or sudden large price deductions can be indicators of an undisclosed problem, which is why a home inspection is so important.

7. Home Inspection

Home inspections can be a buyer’s best friend and a seller’s worst nightmare. Never make an offer before getting a home inspection. Get a second opinion anytime a home inspector files an inconclusive report.

Be safe rather than sorry.  First-time homebuyers can avoid many of the pitfalls to buying a home by just knowing what red flags to look for and not ignoring them.

Six Reasons Your Home-Based Business Needs a Small Business Policy

Like most new home-based business owners, you believe your homeowner or renter’s insurance coverage offers sufficient protection.  That is unfortunate, because in most instances these policies offer little to no coverage for business-related losses.

Homeowner’s policies are not designed to cover business losses.  Most offer a small amount of business property coverage, meant to cover incidental items, such as a computer used for office work. 

Depending on your business, you may be able to purchase a homeowner’s endorsement to cover your business property.  Your insurer is naturally going to want to know more about your business.  Questions such as what type of business, how long you have been in business and how many employees are common.

If your business is small with a low risk profile, and with limited client visits to your home, your homeowner’s insurer may offer limited liability protection. This protection would cover slips and falls when a client visits your office, which otherwise would not be covered.

If this option is not available, you may want to consider a small business policy.  Your homeowner’s insurer might offer a home-based business package for a reasonable premium, or another insurer can offer a package policy to cover the liability and property of your business.

Take a look at the following list.  If one or more of the items below apply, you may want to consider a business policy for your business:

o                   Business Property, Stock or Equipment over $10,000 in value

A business policy will allow you to insure your office contents, equipment, and stock. A homeowner’s policy will likely have little, if any, coverage for business-related items.

o                   Clients visit your office/use your product/depend on your service

Liability insurance can help cover your exposure to lawsuits resulting from slip and falls, product liability claims, personal injury claims, etc.  Perhaps even more importantly, it will provide defense costs for such actions.  Homeowner’s policies do not have coverage for business liability.  In a few instances, you may be able to purchase an endorsement to allow coverage for slip and falls due to customer visits, depending on your type of business.

o                   Damage to your office/workspace would require you to relocate/find a temporary substitute

Extra Expense coverage in a business policy will provide funds for a temporary office/workspace or cost of a mobile trailer near your damaged office site.

o                   An Error or Omission could result in a lawsuit that would need to be defended/could seriously damage your business

Errors and Omissions coverage will protect you from judgments and defense costs resulting from past mistakes. 

o                   Damage to your workplace could cause you to lose business, perhaps even lose some customers permanently

Business Interruption Coverage will help pay for expenses until your property is repaired or sales return to normal (depending on the policy form)

o                   Your employees use their vehicles to make deliveries or run errands for your business

Non-owned automobile liability will protect your business in the event that your employee has a serious accident during the course of running an errand for your business.