Do Your Employees Drive Personal Vehicles for Business-Related Purposes?

If an accident occurs while an employee or volunteer is operating their personal vehicle for company business, your company could be held liable.  Even when an employee is just running an errand, such as making a bank deposit, dropping off a proposal or picking up a part, if an accident occurs your company could suffer as a result.   

While you cannot insure a non-owned vehicle, there are other steps you can take to protect your company before a loss occurs. If your employees or volunteers use personal vehicles for company business, even if just occasionally, the following guidelines can help reduce your risk:

1.   Determine a minimum level of auto liability insurance your employees and/or volunteers must carry.  Also consider what documentation should be provided to your company to demonstrate that proper insurance coverage is in effect.  For example, you might require that employees or volunteers submit a certificate of insurance each year that verifies coverage limits.

2.   Driving records should be checked prior to an employee’s hiring.  Validate driving credentials and check for accidents and moving violations over the past 5 years.  All recruiters, managers and human resource people should be aware of this policy.

3.   Avoid having youthful drivers, those with little driving experience, or drivers with more than one moving violation or accident use their vehicle for business-related purposes.

4.   Periodically check driving records for new offenses and moving violations.  Introduce a procedure for how discovery of new offenses will be handled.

5.   Develop a written policy on business use of personal vehicles and communicate to all employees. Managers, human resource personnel and recruiters should share this information with any potential new hires.

6.   Be sure you remain in compliance with local, state and federal statutes while obtaining private information about your employees. 

Insurance can play a role in helping to protect your business from this exposure. Non-owned auto liability insurance may be obtained on a stand-alone basis or in conjunction with your general liability coverage.  Coverage for hired vehicles may also be available, if needed.

Insurance premiums for non-owned automobile liability depend on the frequency of personal vehicle use and how employees use their vehicles for your business. Premiums for this line of coverage are generally fairly reasonable.

Another way to reduce risk is to eliminate the exposure.  If employees or volunteers are prohibited from using their personal vehicles for business-related purposes, it eliminates the possibility of an accident that will affect your company.

In the meantime, while you are mapping out your risk reduction strategy, maybe you should consider making that bank deposit yourself…

Do I Need to Make an Accident Report?

The first few moments following an auto accident can be an extremely confusing, emotional, and frightening time. As such, it may be difficult to know what accidents need to be reported and what your insurance may require.

There are some types of accidents that will always need a response from one of the local law enforcement departments, such as Highway Patrol, Police, or Sheriff. Each law enforcement department will have a jurisdiction, meaning that which department responds and takes the report will depend on where the accident occurred. For example, an accident within the city limits will most always be handled by the Police. Regardless of the responding department, you should always make a report when an auto accident involves elements like an injured person, severe damage to any vehicle, and/or a driver flees the scene of the accident.

Your insurance company may also require you stay on the scene and report the accident, even in cases where the other driver flees the scene of the accident. Some insurers will accept a counter report. A counter report may be provided by the responding officer for you to fill out, or you might need to go to the nearest station to complete the form off scene. Counter reports are fairly commonplace in larger jurisdictions when the responding officer sees that the vehicles involved are still in working order and no one is injured. In any event, just make sure to remember to get a copy of the counter report for your insurance carrier.

Even if the accident doesn’t involve one of the above elements, there are certain situations where it can be very helpful to have a law enforcement response and accident report. For example, the other driver might admit blame and offer you cash for your damages, but refuse to give you his/her insurance information or contact information. Even if the other driver does offer you his personal contact information in such a situation, you still have no way of knowing if the information being provided is factual. Another example would be you forgetting to collect all the important information and crucial details of the accident because you’re stressed or confused from the accident.

Making a police report can be very helpful in any of these situations since it will involve the law enforcement officer collecting/verifying the driver’s name, address, phone number, car tag, insurance information, accident details, injury details, and so forth. Basically, most any detail that would be needed in court or by the insurance adjuster will be documented in the police report.

Lastly, even though a police report will be necessary or needed for many accidents, you should still always try to remember to write down all the information yourself. Depending on the jurisdiction, it can often take weeks to months for the insurance adjuster to request and obtain a copy of the accident report. On the other hand, the adjuster can initiate the investigation immediately when you’re able to provide the insurance information on the other driver(s).

Longevity Is Key When It Comes to Lawyer’s Professional Liability Claims

Retirement usually means not only leaving your job, but everything associated with that job. However, when a lawyer retires, this isn’t necessarily the case. Whether they are no longer practicing law, or starting an entirely new career, lawyers may find themselves haunted by liability claims arising from their past work.

For this reason, it’s important for departing lawyers to confirm that liability coverage will remain intact for past work. To accomplish this goal, you should review the partnership agreement, the firm’s professional liability insurance, and any recent claims. Keep in mind that partnership agreements and insurance coverage vary from firm to firm. When you review the agreement, you may find an absence of provisions for the firm’s ongoing indemnity or insurance obligations towards former members.

When reviewing the firm’s professional liability policy you’ll probably find that is written on a “claims made” basis. This means that coverage is provided for any claims made during the policy term, even if the events that precipitated the claim happened before the policy’s effective date. Even if your firm has a claims made policy, it can still have coverage gaps that significantly affect you once you decide to leave. For example, the insurer may have included provisions that limit or exclude coverage of the firm’s activities in certain practice areas. Or with claims made policies, if an exclusion is added in the future, it is applicable to all past and future work in that practice area.

Your policy review should also include an examination of its coverage limits. Since these limits cover all claims made and reported within the policy term, there may not be funds available to cover a retiring lawyer if the firm has already submitted a substantial number of claims or even just one large one.

The next step in your evaluation is a determination of how the policy defines “insured.” In some attorney-client relationships, a lawyer may be considered an employee or independent contractor. Under some policies, coverage for employees and independent contractors is either limited or non-existent.

You should also review the conditions regarding the firm’s responsibilities for policy renewal and reporting claims. Don’t assume that the firm will continue to operate as a going concern after you are gone, or that it will continue to renew its liability policy. In fact, in the case of smaller firms, dissolution is often the outcome after a key partner retires.

If the practice is dissolved, it is important that the firm and its former partners maintain insurance coverage. And since time is a crucial factor in a dissolution scenario when it comes to coverage, it is important that you meet as soon as possible with your insurance representative to discuss your coverage status and appropriate options.

Four Rules of Thumb to Follow When Purchasing an Auto Insurance Policy

There probably aren’t very many, if any, drivers that look forward to buying auto insurance. If you’re like most people, you feel that you have an overwhelming task when it comes to sifting through dozens of companies and agents to find the ideal insurer for your vehicle and unique financial situation. The process can leave you feeling unrewarded and irritated as you think about writing a check for a policy that you hope you’ll never need to use.

On the other hand, you know that having auto insurance is a necessity that can be the difference between a financial catastrophe and enduring a minor inconvenience if you were to have an auto accident.  Furthermore, there are steps you can take that make the act of buying insurance less painful and complicated.

The following four rules of thumb can help you drastically simplify the process, while still getting the best auto insurance policy for your needs:

1. Don’t forget to consider the size and type of vehicle you drive when you choose your limits.

Insurers will not sell you a policy that is less than the minimum requirements for your state. However, that doesn’t mean that you should mistakenly opt for auto insurance limits based on the minimum amount required. Depending on the size and type of vehicle you drive, the bare minimum may not be enough to fully cover you if you should have an auto accident. For example, let’s say that you’ve selected the $10,000 minimum property damage amount set by your state, you drive an SUV or large truck, and you hit and cause $22,000 in damage to a brand new Mercedes. Since you’re only covered for $10,000, you will pay the remaining $12,000 out of your pocket.

2. Be forthcoming and honest with insurers.

Even if you think it won’t be favorable on your premiums, it’s extremely important for you to just tell it like it is when you’re asked about your driving history. You can choose to be less than truthful regarding your moving violations and auto accidents, but you won’t be given an accurate quote. This wastes both your time and the insurers, as all insurers will check your driving record themselves and make adjustments to the quote based on your actual driving record. Be honest from the start and you will save time by getting accurate quotes that you’ll be able to compare side-by-side.

3. Look at the whole picture.

It’s tempting to opt for the insurer offering the lowest rate, but cheapest isn’t always the best deal. Know exactly what you’re getting for your insurance dollars and pay careful attention to the fine print in the contract. Unusually low rates have a catch. Would you rather pay low rates with an insurer offering substandard service, or slightly higher rates with an insurer offering an attractive package and reliable 24/7 customer service? Are options on repairs and parts an important option to have? Is it price or convenience that’s at the top of your priorities? These are questions only you can answer in choosing your insurer.

4. Don’t waste insurance dollars on duplicate coverage.

Look at all your auto coverages and ensure options aren’t being paid for twice. For example, AAA members most likely have their towing costs already covered and wouldn’t need a policy with roadside assistance.

Finding the best auto insurance policy isn’t always fun or easy. However, by following a few rules of thumb during the selection process, you can certainly save yourself a lot of money, frustration, time, and regret.

Know Your Commercial General Liability Insurance Limits

A commercial general liability policy (CGL) lists six different limits on the policy’s declarations page. While the limits may be listed separately, it’s important to understand that they are all interrelated. That means that payment of damages for one limit will affect another limit.

To illustrate how these limits interact, it is necessary to examine each one in detail:

The General Aggregate Limit  – The maximum amount the insurer will pay during the policy period for all damages including bodily injury, property damage, personal and advertising injury except for any amount paid as damages because of bodily injury or property damage included within the products-completed operations hazard. The definition of the products-completed operations hazard is outlined in the policy and a separate aggregate limit applies to this type of claim. Also included within the general aggregate are damages paid for medical payments.

Products-Completed Operations Aggregate Limit – The maximum amount the insurer will pay for damages because of bodily injury or property damage included within the products-completed operations hazard. The specified hazards are those described within the definition of the products-completed operations hazard and are limited to bodily injury or property damage that:

1.             Occurs away from the insured’s premises.

2.             Caused by the insured’s products that are no longer in the insured’s possession or an insured’s work that has been completed.

Personal and Advertising Injury Limit – The maximum amount the insurer will pay if legally obligated to pay damages due to personal and advertising injury offenses. The personal and advertising injury limit applies separately to each person or organization that sustains damages because of a covered offense. However, regardless of the number of persons or organizations claiming damages, or the number of offenses claimed during the policy period, the insurer is only obligated to pay up to the general aggregate limit.

Each Occurrence Limit – The maximum the insurer will pay for the sum of all damages due to bodily injury, property damage and medical payments. Keep in mind that there is an aggregate limit for bodily injury and property damage claims that arise from the products-completed operations hazard and a separate limit for all other bodily injury and property damages. However, the each occurrence limit does apply to all sums paid for medical payments.

Damage to Premises Rented to You Limit – This coverage is actually an exception to certain exclusions found in the bodily injury and property damage coverage. The first exception provides coverage for property damage to a premises and its contents, rented to the insured for 7 or fewer consecutive days if an insured is legally obligated to pay for such damage due to any cause except fire.

The second exception provides coverage for damage to the premises only if an insured is legally obligated to pay for property damage due to fire. However, if an insured is held liable solely due to an agreement to be responsible for the property or for damage to the property, there is no coverage. Liability has to be imposed on the insured as the result of a lawsuit in order for coverage to apply.

The Damage to Premises Rented to You limit applies to any one premises. Any property damage paid under this limit will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.

Medical Expense Limit – The medical expenses coverage is a separate insuring agreement that obligates the insurer to pay reasonable medical expenses for bodily injury, caused by an accident, without regard to fault. Medical payments are subject to the medical expense limit. The medical expense limit applies separately to each person. However, medical payments will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.

Fire Insurance Coverage: Know What You Have and Understand How it Works

The extensive and costly damage caused by California wildfires over the last couple of years should serve as a reminder on why it’s vital to both know how you should proceed after finding yourself victim to a large-scale fire, and fully understand your fire insurance coverage before you need to call upon it.

Once the immediate danger of a fire is over, you will need to assess the situation and the resulting ramifications. If you find that the disaster has created large-scale destruction, then just the number of people impacted and the vastness of the destruction itself will most likely impact the cost and tempo of your rebuild. For example, available building materials will be depleted quickly and additional materials will be in high demand. Likewise, contractors will be available in limited numbers and be in high demand. The result – premium prices for supplies and contractors.

Given the above circumstances, it’s necessary for you to insist your insurance adjuster and contractor work together and reach an agreed price for your reconstruction. You might ask both parties to meet with you simultaneously at your home during the cost estimate of the reconstruction.

In addition to knowing how to proceed after a disaster, you also need to fully understand your insurance coverage. Do you know how much of the damage your insurance would cover?

If you opted to insure your home for 100% of its estimated replacement cost when you purchased your policy, then it should pay the cost to rebuild up to that estimated replacement cost. You can add at least an additional 25% if you opted for an extended replacement cost endorsement in your policy. Furthermore, a supplemental building ordinance endorsement in your policy will cover between 10% and 100% of the cost to bring your home up to code if there have been any new or changed construction codes since it was first constructed.

You will need to make an inventory of your home’s contents that were destroyed in the fire to receive compensation from your insurer. To make the settlement process go quickly and smoothly, make sure to provide the description; total cost of replacement, including sales tax; life expectancy; and age of each item. Don’t forget to verify the replacement cost by including the retailer’s name and phone number and salesperson’s name -or- the web addresses for any prices you obtained online. The average percentage of depreciation can be figured by dividing the age of the item by its average life expectancy. You will be paid the withheld depreciation difference on your destroyed items when you replace them with comparables if your policy only covers replacement value.

Additional living expenses, such as rent or a comparable furnished living area, may also be paid under your policy. Of course, this will be minus those expenses, such as mortgage payments and utilities, not directly resulting from your home having been destroyed. Coverage is usually a maximum of 20% of your home’s insurance limit and will generally continue for 12 months or less. Even if your home isn’t damaged, your living expenses may still be covered if your home is uninhabitable by government order. This coverage will end when the government allows you to return to your home.

The right coverage can ease some of the trauma a fire disaster causes to your life. However, you must know what you have and how it works to determine if you have the right insurance coverage in place to met your needs.

A Well-Designed Affirmative Action Plan Can Help You Avoid Discrimination Lawsuits

In an article titled Litigation Explosion, which appeared in the December 10, 2006 edition of the Arizona Daily Star, author Becky Pallack discusses a University of Arizona study that says employee lawsuits are on the rise:

“The researchers analyzed data from the U.S. Equal Employment Opportunity Commission and found 95,115 claims of employment discrimination nationwide in 2005.Federal employment discrimination lawsuits are up 268 percent since 1991, rising at a rate nine times as fast as other types of federal civil litigation.”

The financial effect on business from this increase in litigation has been devastating:

“For employers, the fallout from the lawsuit boom is expensive. Employers facing discrimination lawsuits were ordered by courts to pay $101.3 million in 2005, up nearly 600 percent from $14.7 million in 1992; and employers paid another $271.6 million in settlements, up 130 percent since 1992.”

As if this wasn’t enough, the EEOC has begun a new initiative, E-RACE (Eradicating Racism and Colorism from Employment), which is designed to improve the agency’s efforts to ensure workplaces are free of race and color discrimination. As part of this new strategy, the EEOC has said that it plans to “identify issues, criteria and barriers that contribute to race and color discrimination, explore strategies to improve the administrative processing and the litigation of race and color discrimination claims, and enhance public awareness of race and color discrimination in employment.”

With this increased emphasis on workplace discrimination, it is more important than ever to develop an effective affirmative action plan. Here are some tips to help you design a road map for ending discriminatory practices in your company:

·   Show commitment – Determine your diversity goals, make a plan to reach those goals, and then work the plan to its conclusion.

·   Identify the specific inequities you want to address – Before you create your diversity plan, perform the analysis required by law to identify what imbalances exist between the makeup of your workforce and the diversity of the workforce in the surrounding area. These are the areas your plan needs to address.

·   Perform an analysis of barriers to success – You will need to list what barriers to diversity exist in your business before you can create an effective affirmative action program. Start by asking yourself if individuals from a particular class are underrepresented in a job category. If the answer is “yes,” you need to figure out why. Is it because you recruit through word of mouth, which may be perpetuating your company’s homogeneous workforce? Where do you conduct interviews for new employees? Is it accessible to all types of applicants? If you advertise in newspapers, are they readily available to different ethnic populations?

·   Target the specific practice(s) that need altering – The corrective measures you select must be designed to remedy the imbalances identified in your assessment. If your company’s interview process puts minority candidates at a disadvantage, then focus on recruiting practices. If you have a lack of inclusion in a job category because you cannot find employees with the necessary skill set, then consider a more proactive job-training program.

·   Specify a timetable to accomplish goals – Have a clear picture of what the program needs to accomplish, and when that progress needs to take place. The ultimate success of your program is dependent upon having a quantifiable time line that clearly establishes the date by which each of your goals will be accomplished.

The Impact of Moving Violations and Driver’s License Points on Your Insurance Premiums

Americans love to hear about point systems. After all, many involve us earning desirable rewards, discounts, and freebies. However, not all point systems are about earning something desirable.

In most states, you earn points on your driver’s license after being ticketed for moving violations like running a red light or stop sign, illegal u-turns, unsafe lane changes, and so forth. While no driver relishes the thought of paying moving violation tickets, the financial implications are actually much broader when the points accumulate. This could be in the form of higher insurance premiums or even the suspension of your driving privileges. The details of the point system vary by state. For example, some states assess points to drivers that are at fault in an auto accident. That said, most point systems will assess points one of two ways:

1. One point per basic moving violation, with two points being assessed for speeding violations that involve the driver substantially exceeding the posted speed limit. Drivers assessed either eight points over three years, six points over two years, or four points over one year will have their license suspended.

2. Two points for incidences like slightly breaking the speed limit, an illegal turn, or other minor driving violation. Drivers with more serious moving violations, such as running a red light or stop sign, will be assessed three to five points. Drivers that are assessed 12 points within a three year period will have their license suspended.

Should you get a moving violation ticket, you’ll want to look for the vehicle code violation number on the front of your ticket and contact your state department of motor vehicles. Be sure to ask the number of points, if any, the violation carries; how many points you already have; and how many points will result in a license suspension.

These points can cause your insurance premiums to increase by 20% to 30%. Most insurers will regularly review the driving records for all their customers. Depending on your insurer’s policy and state’s laws, some insurers may be able to raise your premiums for just a single point. Most insurers will allow one moving violation every couple of years before they raise your premiums, but check with your insurer to determine their specific policy.

Can I Avoid/Remove Points?

You can contest the ticket. This may be especially prudent if your points are nearly suspension levels. Keep in mind that contesting the ticket is an iffy proposition in that avoiding the point will depend on you being successful.

An option that offers more certainty in avoiding the point is paying the ticket and attending traffic school. However, some jurisdictions will not allow anyone ticketed for driving fifteen m.p.h. or more over the speed limit to attend traffic school. If you’re eligible, then you may need to attend anywhere from once a year to once every two years, depending on your jurisdiction. Some states will require a court appearance or visit to the court’s clerk to enroll in the class, while other traffic schools are completed online. Some traffic schools give you the basic information with a splash of humor to make it less boring, while others may require you to sit through eight hours of lecture and films on gruesome accidents. In any case, it shouldn’t be too big a sacrifice when you consider the alternative higher insurance premiums from the point(s) going on your record.

Driver education courses, such as a defensive driving class, can help you remove existing points from your license. The department of motor vehicles for your state can give you a listing of applicable options.

In closing, insurers typically either avoid risk or charge exorbitant premiums to take it on. Having a number of moving violations is a strong indicator that you have habits that could lead to costly accidents and claims, and would therefore be a risk to insure. Most insurers do understand that humans err occasionally, but you’ll have the best chance at keeping your rates down by avoiding traffic violations altogether.

Ten Tips for Avoiding Legal Malpractice

Statistics show that in any given year, a minimum of five to six insured lawyers out of every 100 in private practice experience a malpractice claim, according to the Colorado Bar Association. In other words, a firm with 20 lawyers could be the recipient of a claim every year. As exposure to legal malpractice claims continues to rise, it is an important function of law office management to establish effective loss prevention practices:

·   Develop a standard calendaring system – This should contain all items to be calendared, deadlines for the various cases being handled, as well as deadlines for critical events. It should also include frequent reminder dates. The most effective calendaring system will have tracking procedures that identify the author of a particular entry.

·   Know the signs of substance abuse and depression – Heavy workloads can often result in an attorney becoming depressed or compensating through substance abuse. Knowing the warning signs associated with each scenario can prevent the firm from being hit with a malpractice suit because of a dysfunctional attorney. Symptoms of substance abuse include Monday morning tiredness, missing deadlines and appointments and neglecting mail and phone calls. Behavioral changes associated with depression include misplaced anger, frequent bouts of crying, self-criticism, becoming easily distracted, and lack of interest in every day activities.

·   Maintain good client relations – When accepting a new client, an attorney should discuss the purpose for which the firm was hired, reporting schedules, fees and billing arrangements, and client obligations. All of this information needs to be documented in writing and given to the client. Also, be sure the lines of communication remain open throughout the attorney-client relationship.

·   Screen clients carefully – Establish a policy of screening clients using a pre-determined set of criteria. Hold each attorney accountable for using those criteria.

·   Conduct thorough research and investigation – Some of the most common errors include failure to correctly apply the law, failure to determine a deadline, inadequate discovery and investigation, poor planning, and errors in the choice of procedure. The attorney of record should review staff work to ensure the accuracy of their work.

·    Avoid conflicts of interest and matter – Avoiding conflicts of interest involves establishing and updating a database of all clients and matters handled. To avoid conflicts of matter, create the practice of circulating a “new matter memo” to all attorneys and support staff whenever the firm accepts a new case. 

·   Never become inappropriately involved in a client’s interests – Accepting a director role in a client’s company, investing in a client’s securities, transacting business deals with a client, agreeing to contingent cash fees, and soliciting investors for a client’s business can result in a host of problems.  For example, the firm could be held liable for the attorney’s activities as the director in a client’s company or face conflict of interest charges because of an attorney’s personal involvement or investment in a client’s business.

·   Document all work – Establish a system for verifying the accuracy and content of all documents such as letters, briefs, contracts and motions. Also create separate files to store all documents prepared or received for each client matter.

·   Avoid fee disputes – Document fees and the scope of work in all matters. Bill on a monthly basis unless the client has asked for a different arrangement. Provide the client with detailed billing statements that include who performed the work and how much time was required.

·   Never delude yourself into believing you are immune from a malpractice suit – Your best defense is to remain acutely aware of how prevalent malpractice suits have become. It is this awareness that will motivate you to establish and maintain effective loss control procedures.