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Get the Injured Worker Back on the Job the Right Way

Workers’ compensation premiums represent a major personnel expense for most organizations. Injuries that cause employees to miss work are especially costly, in terms of both lost wage compensation and lost productivity. Also, the longer a worker is disabled and unable to work, the more his future earning power decreases and the more likely it becomes that he will hire an attorney. For these reasons, it is advantageous to both employer and employee to get the injured worker back on the job as soon as possible. As a result, many employers have implemented return to work programs.

Under a return to work program, the injured employee performs a different job while receiving his prior level of pay. The new job should be matched to his current physical capability, reflecting his state of recovery from the injury. To succeed, this requires a good working relationship between the employer and treating physician. The employer needs accurate information as to the tasks the worker can safely perform; otherwise, the result may be a second, more severe injury. If the worker’s physician will not cooperate or provide a realistic estimate, the employer or insurance company may have to require a physical examination by an independent physician.

A return to work program should be one piece of a comprehensive and coordinated loss management program. The elements of the program should include:

* Immediate reporting and investigation of accidents

* Arrangement of primary medical care

* Return to work program

* Regular communications with the injured worker

To assist in the arrangement of primary care, the employer should provide the treating physician with job descriptions that explain each job’s physical tasks in detail. Meetings with the physician to explain the nature of the employer’s operation will help match a job to the worker’s capabilities. Communications between the physician and the employer are vitally important. The employer may want to arrange for direct reports from the physician or regular reports delivered by the employee. The ideal situation is one where the employee can assume light duties without missing any time. Barring that, limiting lost time to a week or two will still keep the claim’s cost down, resulting in premium savings for the employer. The experience modification formula, which adjusts the premium based on loss history, gives the most weight to losses of $5,000 or less. Getting the injured worker back on the job quickly will help keep the loss well under that limit. Since losses remain in the calculation for three years, the effect of holding down claim costs is long lasting.

Of course, return to work programs have pros and cons. The pros include:

* Limiting or eliminating lost work time

* Keeping the worker involved in the work environment

* Eliminating the need to locate, hire and train a replacement

* Increasing the chances of success should the worker refuse the new duties and sue for lost wage benefits, since the employer can show that it made a reasonable job offer

Among the cons are:

* The employer will pay the employee’s full wage for reduced productivity

* An employee with a bad attitude about his alternative duties could lower morale among the other employees

* If the alternative arrangement does not work out, returning the employee to lost wage benefits will wipe out any cost savings

While individual cases might not produce the desired results, employers should realize long-term savings by implementing return to work programs. Beyond the verifiable dollar savings, return to work programs can give the employer a more stable, happier workforce and a good reputation with potential employees.

Cutting the Cost of Your Teenager’s Car Insurance

Auto insurance for teenagers has always been expensive, and that will probably never change. It’s common for most parents to add their teen as a named driver to the family auto policy because it is usually the most affordable alternative.

However, less expensive doesn’t mean cheap. That’s because insurers calculate their rates based on the likelihood of a driver getting into an accident. The National Safety Council says that drivers between the ages of 16 and 17 are three times more likely to be killed in a traffic crash than drivers between the ages of 25 and 64. Statistics like these make drivers under the age of 25 bigger risks in the eyes of auto insurance companies, so expect your premium to increase anywhere from 50 to 75 percent.

There are some other important factors that affect how much you will pay when adding your teen to your insurance:

  • Gender – Teenage boys are considered to be more reckless and bigger risk takers than teenage girls. All of that bravado comes with a price, higher rates than for teenage girls.
  • Experience – Lack of driving experience translates into higher premiums because insurers assume that inexperience makes the driver more prone to accidents.
  • Geography – Driving in a high-traffic geographic area is another rate booster because it increases the probability of getting into an accident.

While the deck seems to be stacked against you, there are ways you can lower premiums:

  • Buy them an older model car – Older cars cost less to insure than newer models.
  • Avoid the extrasAll of those add ons that teenagers love, like chrome rims and big stereo systems, will increase the rate you’ll pay.
  • Lower/drop collision coverage on older cars – If the value of the car is less than the product of your annual premium times 10, think about dropping the collision and/or comprehensive coverage portion of your policy.
  • Raise your deductible – A higher deductible can lower your auto insurance rate by 15 to 30 percent.
  • Enroll the teen in a defensive-driving class – This could result in a premium decrease.
  • Obtain car insurance from the same company that provides your homeowner’s or renter’s insurance – Many insurers will offer a 10 to 20 percent discount for multiple lines of coverage.
  • Maintain your credit score – Insurers base your premium in part on your credit score; the higher it is, the lower your rate will be.
  • Ask about low mileage discounts – As gas prices increase, many people aren’t driving their car as much. If you drive less than the annual average miles allotted by your insurer, see if you can qualify for a low mileage discount. 

Toxic Torts Can Poison Your Business

In the 1800’s, manufacturers and builders started using a natural resource that vastly improved the quality of their products. It added strength to materials, resisted heat, electrical and chemical damage, and absorbed sound. When mixed with cement and used in building construction, it enhanced fire safety. By the middle of the 1900’s, manufacturers were using it in insulation, automobile brake pads, drywall, lawn furniture, fireplace cement, gaskets, and a host of other products. Unfortunately, this material, asbestos, can cause serious lung disease and even death in those who inhale its fibers. Builders and manufacturers who used it have endured hundreds of thousands of lawsuits from the victims or their survivors.

Claims resulting from exposure to asbestos fall into the category of what is known as “toxic torts” — injury and damage lawsuits stemming from exposure to substances proven to cause illness or injury in people. Other substances that lead to toxic torts include lead paint, toxigenic mold, industrial chemicals, pesticides, and toxic landfill waste. These lawsuits can ravage a company’s balance sheet, ruin a good reputation that took years to build, and divert resources and attention away from normal operations and toward legal defense.

Asbestos has been associated with instances of cancer affecting the protective lining that covers most of the body’s internal organs. This form of cancer was killing 3,000 Americans a year by the late 1990s. Most of the victims had long-term occupational exposure to asbestos; a Rand Corporation study estimated that 27.5 million people in the U.S. were exposed to asbestos in their workplaces between 1940 and 1979. Consequently, by 2002 more than 730,000 people had sued more than 8,400 firms for illnesses caused by the fiber. The cost of asbestos-related litigation in the U.S. has exceeded $250 billion.

Toxigenic molds produce a chemical that can be dangerous to people exposed to large amounts of it over a long period of time. Normally, the mold is not present in large enough quantities to be harmful. However, concern has grown over the last several years about the possible effects of long-term exposure to these molds. Newer energy efficient homes have become air tight, preventing moisture from escaping and creating an environment where mold can grow. A Texas woman who sued her insurance company over its refusal to pay for cleaning up mold that allegedly made her home unlivable won a multi-million dollar damage award; a court later reduced the amount. While health experts have not reached a consensus about the actual harm mold can cause, the increased attention to it makes future litigation likely.

The standard commercial general liability insurance policy does not cover most losses resulting from pollutants. However, alternatives exist — pollution legal liability insurance policies. These policies cover damage to the organization’s own property; injuries or damages that others suffer as a result of a toxic incident for which the organization is liable; and associated cleanup costs. Depending on its terms, such a policy might also cover new injury claims, cleanup, and the discovery of new toxic substances after the organization implements a pollution remediation plan. A professional insurance agent can help locate the appropriate coverage at a reasonable cost.

Toxic torts are likely to remain a financial threat to all organizations for the foreseeable future. Controls to prevent injuries or to make existing ones less severe, coupled with the right insurance company, can help ensure that your organization will survive this threat.

Can Your Car Insurance Survive a Storm?

With winter coming to a close, it’s time for many parts of the country to start preparing for tropical storms. Such storms can cause massive amounts of damage, not only to your home, but also to your car. Do you have enough auto insurance coverage to withstand that kind of destruction?

The Insurance Information Institute (I.I.I) says that even with comprehensive auto coverage, you may not be fully protected. Comprehensive coverage will pay for losses caused by fire, falling objects, catastrophic storms, vandalism, or animals. It will also protect your car against flood damage.

What you may not be aware of is that even with comprehensive coverage, your auto insurance does not automatically pay for a replacement rental car while your car is being repaired, or while waiting for an authorization from your insurer to purchase a new one.

That’s why it’s important to review your car insurance annually with your insurance agent to determine the extent of your coverage. It’s also a good time to talk about the need for additional coverages such as rental car reimbursement.

Here are a few more tips if your car suffers storm damage:

  • Report damage as soon as possible. If your car is not drivable, your agent or claims center may be able to save you time and money by having the car towed directly to the repair facility instead of to a temporary storage facility. In addition, arrangements may be made immediately to provide you with a replacement rental car, if your policy includes this coverage.
  • Know what your deductible is, as well as any additional charges you will be expected to pay before you authorize any repairs. Be sure your insurance adjuster, claims representative or repair facility appraiser reviews the damage with you and explains the repair process, including the use of original or generic auto parts.
  • Ask about warranties on repairs. You should also find out if your insurer has a repair facility referral program that offers a written limited or lifetime repair warranty backed both by the repairer and insurer for as long as you own your vehicle.
  • Do business only with a reputable insurer. Obtain insurance from companies that have a proven track record of handling auto insurance claims effectively. Get a referral or contact your local Better Business Bureau or State Department of Insurance.

Employers Vulnerable to Associational Discrimination Claims

Most employers are aware of the employee protections found in Title VII of the Civil Rights Act of 1964. Employers may not discriminate against employees on the basis of race, color, religion, sex or national origin. Also, they may not retaliate against employees who have protested against an illegal employment practice or who participated in an investigation or other activities against the employer for an illegal practice.

Further, recent court decisions have applied Title VII’s protections to an employee’s association with another person whose characteristics fall under those protections. The U.S. Supreme Court held in 2006 that employers cannot discriminate against someone closely related to or associated with a person who is exercising protections under Title VII. Two federal courts earlier this year ruled that employers violated the law by discriminating based on association. One allegedly fired a white basketball coach because his wife was African-American; the other allegedly fired an employee whose coworker’s fiancé filed a complaint with the Equal Employment Opportunity Commission.

All employers are vulnerable to these types of accusations, even those who strive to obey the law. Employment practices liability insurance (EPLI) policies cover many types of losses resulting from employee claims. How will they respond to association discrimination claims?

EPLI policies vary somewhat from one insurance company to another, but most provide coverage for acts such as discrimination, wrongful termination, harassment, retaliation, and inappropriate employment conduct. A typical policy covers discrimination against an employee for termination of the employment relationship, demotion, failure to promote, denial of an employment benefit or other adverse action based on a number of characteristics such as color, race, sex, ethnicity, age and religion. It also covers retaliation claims if the employee engaged in a protected activity, the employee suffered an adverse action, and the protected activity caused the adverse action. Because they specifically apply to employees who have these characteristics or who perform protected activities, these policy provisions do not appear to cover actions against employees because of their association with others.

However, the policies usually also cover “inappropriate employment conduct.” Among the acts that may fall within this category are coercion, wrongful demotion, wrongful discipline, retaliatory treatment, and others. The definition of “inappropriate employment conduct” will be different from one policy to another. One insurance company may cover association discrimination while another may not. As such, employers should discuss specific terms of coverage with their insurance agent.

The policies might cover the employer, but not the employee alleged to have committed the act, if a court determines the employee deliberately acted illegally or with intent to harm the other employee. For example, if a court ruled that a supervisor was acting maliciously when he fired an employee for marrying someone of a different race, the insurance might pay for the employer’s defense and liability but not for that of the supervisor.

In this era where job cuts and lawsuits are common, employers face a real exposure to actions against them for the decisions they make. Lawsuits can be costly even if they are groundless; the costs of defending them can mount rapidly. EPLI provided by a financially solid company is an important part of every employer’s risk management program.

EPLI, coupled with a well-executed loss prevention program, will help any employer survive employee accusations.

Using Airbags Without Seat Belts Increases Risk of Spinal Cord Injury

The National Safety Council reports that significant cervical spine injuries can result from car crashes occurring at speeds as low as 5 miles an hour and that result in little or no damage to the car itself. According to a recent study conducted by the University of Pittsburgh, the risk of injury increases when airbags are deployed during a crash and the driver and passengers aren’t wearing seat belts.

The cervical spine is the seven vertebrae of the spinal cord that comprise the neck. It can be damaged when it is compressed against the shoulders during a collision or when the head is violently jerked either backwards or forwards, causing injuries to the muscles and ligaments of the neck. The resulting neck sprain is commonly referred to as whiplash.

The research team, lead by Dr. William F. Donaldson III, used data gathered from a Pennsylvania trauma database to identify crashes resulting in spinal cord injuries from 1990 to 2002. They examined approximately 12,700 spinal injury patient records and of these, 5,500 were identified as either drivers or passengers who experienced fractures of the cervical spine.

After studying the cervical spine injury records, researchers found that drivers who were not wearing a seatbelt had a 54 percent rate of cervical spine fractures. However, drivers who used both an airbag and seatbelt had only a 42 percent rate of injury. After adjusting for other factors, the relative risk of cervical spine fracture was 70 percent higher for drivers using an airbag alone compared to drivers who used an airbag and seat belt.

The risk of cervical fracture was approximately seven times higher for passengers who used only an airbag. For both drivers and passengers, men were more likely than women to be injured when using an airbag alone.

Another important discovery the researchers made was that drivers and passengers who used an airbag alone were more severely injured than those who used both. They also spent more time in the intensive care unit and more total time in the hospital.

The results of the study indicate that drivers and passengers who use airbags without seatbelts have a higher rate of cervical spine fractures and have more severe injuries, including injuries to the chest, abdomen, and head. Dr. Donaldson and his team concluded that using a seatbelt with an airbag and maintaining at least 10 inches between the steering column and the sternum may decrease the severity of injuries in general, in addition to reducing the instances of airbag induced cervical spine injuries.

Tips for Evaluating Contractor’s All Risk Policies

Construction is a high risk industry. Personal injuries and property damage occur frequently, and these events ultimately cost the contractor money. Many times such claims could be covered under a Contractor’s All Risk (CAR) policy.

CAR policies, commonly referred to as Course of Construction or Builder’s Risk policies, insure against physical loss or property damage to works, plant, equipment and materials during the course of construction. Such policies can be complicated so contractors should take care to ensure that any coverage adequately covers the risks of the construction project to be undertaken. Many contractors can be caught short by failing to evaluate their potential liability risks in relation to the policy they are considering.

Here are some important rules to evaluate CAR policies:

* Conduct an insurance audit with a risk manager or broker to determine potential liability and any risk not covered by your current policy.
* Consult with your broker because many insurers can customize the coverage to match the needs of the project. The insurer needs time to do this effectively, so don’t wait till the last minute.
* Take note of exclusions because while most are expressly stated, others can be implied and can radically limit your protection. One frequently implied exclusion is consequential loss relating to loss of profits and expenses as an indirect result of the cause of the claim. Naturally occurring events such as deterioration due to mildew, rust, or obsolescence may also be deemed as implied exclusions.
* Confirm there are no unusual limitations on the measure of damages. The method in which your insurance carrier determines damages can significantly affect your bottom line.
* Carefully consider the period of coverage as it normally only extends to when the contractor is on site and ceases when the client takes possession. Ensure there is extended coverage should problems develop later on.
* Technological changes using business information technology opens many contactors to new risks if they incorporate design management in the construction project. Additionally, construction companies which use BIM also have to consider potential losses due to hacking or data corruption that would not likely be covered under a CAR policy.
* Review the excesses and deductibles to be applied by your insurer to determine if they are reasonable.
* Fully document your damages with the aid of an experienced consultant, as CAR carriers will strive to reduce the cost of damages. Costs stemming from prolongation of the claim may be restricted to maximum excess limitations.
* Use a legal consultant especially when preparing a major claim. They can guide you through any potential red tape and aid in negotiating a proper settlement.

When Your Adult Kids Move Back Home, Double-Check the Insurance

The slow economy of the past few years has exacerbated a trend that was already underway, that of adult children moving back in with their parents. A 2007 study found that one-third of people aged 18 to 34 were living in their parents’ homes. In addition to the issues this trend raises in households with regard to cost-sharing, work-sharing and personal boundaries, insurance issues arise. Home and auto insurance forms are very clear that minor children have coverage under their parents’ policies. This becomes less clear the older the children get, and it becomes ambiguous when they return home after living on their own for some period of time. Parents and their adult children may be risking thousands of dollars in financial loss if they do not handle the insurance correctly.

The standard homeowner’s policy provides coverage for the person named on the policy’s information page, that person’s spouse if a resident of the household, residents of the household who are that person’s relatives, and a full-time student under age 24 who is a relative and who resided in the household prior to moving out for school. Therefore, the policy covers parents and minor children, and it covers college students while they’re away from home. However, it is questionable whether an adult child moving back in with her parents is a resident of the household. Even courts have had trouble setting a precise definition of residency. For example, suppose a woman and her son relocate to her hometown following a divorce and they move in with her parents while she looks for an apartment. Is she a resident of her parents’ household while she’s living with them? Does it depend on how hard she’s looking for a new place? What if she is looking but falls ill and is unable to actively search for a period of weeks? At what point does she become a resident and not merely a guest? There is no hard and fast rule. In situations like these, the best way to eliminate any doubts about coverage may be for her to buy a renter’s insurance policy.

Auto liability insurance, which insures against a person’s legal responsibility for injury or damage to others, has a few other wrinkles. The standard policy covers the person named on the information page, the resident spouse, and any family member for the use of any auto. The policy defines “family member” as a person related to the named insured person by blood, marriage or adoption and who is a resident of the household. Therefore, the woman in the previous example has coverage for the use of any vehicle if she is a resident of her parents’ household (other policy provisions eliminate coverage for certain vehicles.) However, even if she is not a resident, she has some coverage: The insurance covers any person while using a vehicle listed on the policy if she is using the vehicle with a reasonable belief that she has permission. If she is temporarily living with her parents and her father loans her his car to run to the store, she has coverage. However, she does not have coverage while driving a vehicle she owns if her father’s policy does not list it. Again, the solution here is for her to carry her own auto insurance; this makes moot the question of whether she is a resident of her parents’ household.

Insurance companies have designed policies to easily fit households with parents and minor children, but they did not have returning adult children in mind. Because these situations can be complex, it may be best to consult with a professional insurance agent to determine the right approach. The wrong decision can result in a nasty surprise when a claim occurs.

Do You Have Coverage If You Damage a Customer’s Property?

A plumbing contractor’s employee is soldering two lengths of pipe together when a fellow employee asks him to assist with another task for a moment. The first employee lays the soldering torch on a ceiling joist, forgetting that it is still hot. While he is away, the joist begins to smolder, then small licks of flame form and ignite combustible material in the ceiling. By the time someone notices, fire is consuming the ceiling. Firefighters’ efforts to extinguish the blaze cause water damage to portions of the building and walls near the fire’s starting point suffer smoke damage.

The building owner will most likely hold the contractor responsible for the cost of repairing the damage. In turn, the contractor will look to his general liability insurance policy to cover that cost. Will the insurance company pay for the repairs?

The Insurance Services Office’s Commercial General Liability Coverage Form states, “This insurance does not apply to…’property damage’ to…(t)hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations…” What does this mean, and how does it apply to an incident like this one? What does the form mean by the phrase, “that particular part”? Several courts have weighed in on this question.

A Tennessee court in 1975 ruled against an electrical contractor whose employee, while installing circuit breakers in a switchboard, caused a short circuit that destroyed the entire switchboard. The court said that the employee was performing operations on the switchboard, not just the individual circuit, and therefore liability coverage did not apply. Similarly, a Massachusetts court ruled against a cleaning contractor in 1989. The contractor was cleaning the bottom of an underground oil storage tank when an explosion occurred, destroying the entire tank. The contractor argued that the insurance should cover all of the damage except that to the bottom of the tank, but the court ruled that the entire tank was “that particular part” on which the contractor was performing operations.

Conversely, a Minnesota court granted coverage for a contractor that had been hired to clear trees and brush from a construction site but that also cut down trees on an adjoining property. The court said that, while the liability policy would not cover damage to property the contractor had been hired to work on, it did cover damage to the property of a third party. A New York court ruled in 1974 that a liability policy covered damage that occurred after the contractor had completed operations.

The courts have not established firm rules about what constitutes “that particular part” of property on which a contractor is performing operations. Case law will vary from one state to another. Because of this, contractors should discuss the exposure with their insurance agents. To reduce the chances of an uninsured loss occurring, an agent may recommend the purchase of a builders risk or installation floater policy. These policies cover property that the contractor is installing on a construction site while it’s in storage, in transit, on the job site and during installation. They also usually cover property of others for which the contractor may be liable. Unlike the general liability policy, there are no standard versions of these policies, so contractors must review them carefully and ask their agents questions about anything that is unclear.

The law of averages suggests that most contractors will accidentally damage a customer’s property at some point. Now is the time to make sure that there will be no insurance surprises when it happens.

Protect Your Child from the Dangers of Electrical Outlets

When bringing a child into the home, parents take many safety precautions. Unfortunately, those precautions do not always ensure that the child will avoid harm. Electrocution may not happen often, but its effects can be deadly.  Household wiring and large and small appliances cause the majority of electrocutions in the U.S each year. In 1997 (which is the most current data available), the CPSC found that 86 percent of reported injuries involved children 1 to 4 years old. The most common foreign objects stuck into electrical outlets were keys and hairpins. There are several options you can implement to help protect your children against this preventable safety hazard.

Most parents know to install plastic outlet protectors for all the outlets within their child’s reach. But do they really protect as well as we assume? A 1997 Temple University study tested the effectiveness of the different types of plastic outlet protectors with 37 children ages 2 to 4 years. For the round, flat face style protector with two prongs, 47% of the 4-year-olds and 31 % of the 2-year-olds were able to remove this protector. Another oval style had a 3/16″ thick oval face with tapered sides. Again, 47% of the 4-year-olds but only 18% of the 2-year-olds could remove this type of protector. Yet another style with a 1/16″ thick face and lacking tapered sides could be removed by all of the 2- and 4-year-olds!

However, you do have other choices. Some manufacturers make a child tamper-resistant outlet, rather than a cover. They resemble regular outlets, but behind the face of the outlet are plastic shutters. The shutters remain closed until something is inserted into both vertical outlet holes at the same time, at which point the shutters open and the plug can be inserted. This design is based upon the premise that most children will not stick two objects in the same two vertical outlet holes at the same time. This type of outlet costs between $6.00 to $8.00 each compared to a typical electrical outlet receptacle that usually costs no more than $5.00 a piece.

Outlet face covers are another option for you to consider. These covers have faces that swivel or slide over the outlet holes, requiring you to push the cover away while inserting the plug for a secure fit. These covers range from $6.00 to $10.00 each. Both the tamper-resistant outlet and the face covers should be available at your local home improvement or electrical supply store. Whatever type of protection you choose, ensure that you take some of these simple steps to protect your children from this very real safety hazard.