Five Ways to Control Workers’ Comp Costs

Most businesses are required by law to provide workers’ compensation insurance. It protects employees, providing income and medical care if they’re injured on the job. It also protects employers; the liability portion provides coverage for lawsuits filed as a result of a work-related injury.

As an employer, the amount you pay for workers’ compensation coverage varies according to your industry and claim history. Workers’ compensation insurance for companies that engage in office-based work is generally much less expensive than insurance for industries like construction or trucking.

Regardless of your industry, there are proactive steps you can take to keep workers’ compensation costs under control. Here are some tips:

Thoroughly train new employees: Surveys show that nearly a third of workers’ compensation claims result from accidents involving newly hired employees. Take a look at your orientation program and see if you can improve overall safety by beefing up new employee training.

Make safety a top priority: The best way to keep costs down is to not incur claims in the first place. Create a safety culture throughout the company, and engage employees directly in the effort. For example, you could establish safety councils and solicit ideas from employees on how to create a safer workplace.

Pre-screen employees: Another preventive action you can take is to make sure you hire the right employees in the first place. Statistics show that workers who are substance abusers are far more likely to have an on-the-job accident. An investment in pre-employment drug screening can save a significant amount in claims down the road.

Manage claims proactively: When an employee is injured, make sure you keep tabs on the worker’s condition and plan for their return to work as quickly as possible. In some cases, injured employees can rejoin your workforce on light duty, which can reduce the amount of the claim.

Make sure employees are classified properly: There are hundreds of classification codes used to determine the appropriate level of workers’ compensation coverage. If employees are misclassified, you may not have the coverage you need, and misclassifications can result in fines.

Workers’ compensation is essential to protect your employees ― and your company. To sharpen your company’s competitive edge, it’s important to control costs. Take a fresh look at your company’s approach to safety, hiring, classification and claims management. You may find new ways to keep costs under control.

Market Value – How Much is My Home Actually Worth?

Homeowners always seem to have a ballpark estimate of their home’s worth, but when it comes down to the real value, they can be a little off target. People tend to view their home through rose-colored glasses as they calculate its value, remembering all of the tender moments that happened over the years. The open market, however, removes sentimental value from the formula and only assesses value based on features and characteristics.

In order to talk about how houses get rated, you must first understand what the term “market value” means. To real estate agents, it refers to the price a house can be bought and sold for within a practical time frame. This would be at a price that is considered fair by both the seller and buyer, and within a time frame ranging up to three months.

If you are interested in figuring out your home’s market value, you must concentrate on the types of things buyers look for when browsing around. Remember that the housing market can change in the blink of an eye and that the value of houses can vary drastically from one neighborhood to another. To establish a good starting point, take a look at the asking price of similar homes for sale in your area.

What to look for when doing a market value analysis of your home:

Location, Location, Location – What school district is the home located in? How desirable is the neighborhood? Is it near local parks, shopping centers, or public transportation?

Design and Overall Appeal – Is the layout of the home aesthetically pleasing? Does the home look nice or like a fixer-upper? Is there landscaping?

Quality of Construction – Does the house appear to be in good condition? Are there visible and obvious repairs?

Maintenance – Has the wiring and plumbing been maintained or updated? Does the home need new shingles or siding? Is there peeling or faded paint on the back porch?

Home Improvements – Is the back patio enclosed or has the bathroom recently been remodeled?

Distinguishing Features – Is there an in-ground pool for swimming or is the basement finished? Is there room in the backyard to plant a garden?

Another way real estate agents measure market value is by looking at the home’s price per square foot. This figure is calculated by taking the amount of livable square feet in the home and dividing it into the home’s most current appraised value, which can usually be found in your property tax paperwork. Look in the newspaper to see what similar houses in your neighborhood are selling for and determine their price per square foot. To prime your house to sell, you will want to price your house at a comparable rate.

Finally, you must take into consideration the current condition of the housing market. Thousands of dollars can be gained or lost depending on real estate trends. Changes in interest rates, the local economy, and even national issues have an effect each home’s market value. A booming economy improves interest rates and leads to higher home values, and on the other hand, in times of recession, home values sink below what owners think is fair. By completing a market value assessment on your home each year, you will have a better idea whether or not your home is properly insured. Be proactive, as an undersized policy will not offer much protection if something terrible would happen.

Driving Risk: When Employees Run Business Errands

Have you ever sent an employee out to pick up needed supplies? Offered to buy lunch for the crew and asked an employee to pick it up? Unless you only send employees who are insured to drive your company vehicles, you may be putting your business at risk. Your business may also incur liability if you travel on company business and have an accident in a rented car while traveling to meet a client or for other business-related purposes.

Why would your business be at risk? Because if there is an accident that causes damage to a third party and the driver’s insurance doesn’t cover the full costs, your company may be sued to recover the excess amount. Employees who use their personal cars are generally required by law to have insurance. But unless you hire them as drivers, you probably have no idea how much insurance coverage employees actually carry ― or even if they have insurance at all.

If you’re traveling on company business in a rental car, you’re probably covered by your personal insurance or by a policy purchased through the rental agency. But if you’re in an accident and cause damage that exceeds the amount of personal coverage you have, an attorney for the injured party would almost certainly seek damages from your company.

The Solution

The good news is that there’s a simple and relatively inexpensive solution: a non-owned auto insurance policy. This type of policy protects your business if an employee gets in an accident and causes damage while running a company errand. It also protects your company if you cause damage in an accident while driving a rental car on company business.

Keep in mind that non-owned auto insurance generally doesn’t cover drivers ― its purpose is to protect the organization. Non-owned auto insurance generally does not function as primary insurance; it is designed as excess liability protection. In other words, if your employee causes damage in an accident while driving a personal car on company business, the employee’s insurance would generally pay first. But if the liability exceeds the amount of the employee’s coverage, non-owned auto insurance would protect your business from being responsible for damage costs not covered by the employee’s coverage.

The Bottom Line

Liability claims caused by vehicular damage can run into the millions of dollars. Your business could be at risk if an employee has an accident while traveling on company business. Your company could also be at risk if you or an employee has an accident while driving a rental car on business. Non-owner auto insurance can provide peace of mind ― and vital protection.

Identity Thieves: They Play, You Pay

It’s hard to tell exactly how they do it. Maybe you threw away some papers with your account number on them, somebody watched you put in your PIN number, or maybe you fell victim to an email phishing scam. Identity thieves don’t care where they get your information, they are just out take your money and ruin your credit in the process. Because there are so many different ways for identity theft to occur, it is important to know how to protect yourself and your assets.

Identity thieves are criminals who prey on other people’s personal information, for instance their social security number, credit card information, bank account information, and online account log-in information. Thieves even want to know your pet’s name or mother’s maiden name to help them steal passwords. Using this critical information, thieves are able to make unauthorized transactions and transfer funds behind your back. Before you ever find out, an identity thief could be enjoying a Caribbean vacation at your expense. While these damages can be repaired, it will cost you plenty of headaches and potentially thousands of dollars.

The threat of identity theft is ever present, but there are some things you can do to keep your credit protected. The first thing you should do is prevent yourself from revealing personal information over the phone and on the Internet. If you do not understand why a business would need your social security number or similar information, then do not give it out. Junk mail and credit card offers are also potential threats and should always go through a paper shredder before being thrown out.

Bank receipts and discarded deposit slips are a goldmine for thieves and should never get tossed in a public trash bin. When ordering new checks, request to have your first initial printed in the corner instead of your full name, to make it harder for forgeries to occur. Checks should never be printed with your social security number on them.

In your free time, take a trip to the library or use your office copier to make paper copies of everything in your wallet. Keep these duplicates in a strongbox or other safe spot at home so you can reference your driver’s license and credit card numbers if you ever lose your wallet or have it stolen. Make sure to photocopy the backs of your credit cards too, which contain the customer service phone numbers to call to deactivate the cards. Having these numbers handy will get your cards suspended quickly and cut down the amount of time the thief can access your accounts.

If you discover or suspect that your identity has been compromised, call the local authorities after you have deactivated your cards. Filing a police report legitimizes your claim and opens an investigation to find and stop the thief. Also, make a report with the fraud department at the Federal Trade Commission and the Social Security Administration. To stop further attacks to your credit, alert the three credit reporting bureaus to block the use of your social security number and name on any new credit applications.

Insurance companies offer identity theft policies to individuals who want added protection. These policies cover the costs of unauthorized purchases and restoring your credit. Sometimes identity theft protection is included with homeowner’s insurance or it can be added as an endorsement to a renter’s or homeowner’s policy.

Nearly 100,000 people each year have their identity stolen, according to Federal Trade Commission statistics. Just one bank slip or piece of mail can lead to having your credit destroyed by an identity crook. By making only a few changes to your lifestyle, you can keep your identity from being targeted by crafty thieves.

Traffic Accidents May Be Biggest Risk to Employee Safety

The International Association of Industrial Accident Boards and Commissions (IAIABC) discovered that not only are highway vehicles the biggest risk of serious injury to employees, but they are also associated with some of the most costly workers’ compensation claims.

The researchers analyzed injury data from the National Council on Compensation Insurance (NCCI) and the National Institute on Occupational Safety and Health (NIOSH). Their findings revealed that only work in construction, agriculture, and certain natural resource industries caused more employee injuries than vehicle accidents. The data also showed that traffic accidents were the source of a large portion of the total number of serious disabilities and fatalities.

The study categorized injuries by industry and occupation. As an occupational class, truck drivers were found to have a substantially high risk of fatalities; however, they had significantly fewer non-serious injuries. The reverse was true for passenger cars. They were found to have fewer fatalities, but almost double the number of non-serious injuries. The researchers concluded that the size and weight of trucks protect occupants in slower-moving collisions with other vehicles. However, because trucks are prone to jackknifing and overturning, truck drivers are more likely to experience a fatal injury. Besides the high fatality rates, trucker drivers were discovered to have workers’ compensation claims of longer duration and higher average cost.

Other occupational categories that generated a high number of expensive workers’ compensation claims as a result of vehicle accidents were salespersons, messengers, and collectors. It is important to realize that these were actual claims, and not rates of injury per worker. This means that jobs that have traditionally been considered unlikely to cause worker injury carry more risk than originally believed.

The data also indicated that employees involved in vehicle accidents had a significantly higher rate of permanent total disability and workers’ compensation death claims than all other types of claims combined. The average severity of temporary total disability, permanent total disability, and fatality was greater for vehicle claims than for non-vehicle claims.

The predominant cause of injury in workers’ compensation claims resulting from vehicle accidents was neck sprain and neck pain, which accounted for 15 percent of all vehicle claims. However, these claims made up less than two percent of the overall number of workers’ compensation claims.

When examining the cost of vehicle accidents to employers, workers’ compensation payouts represent only a small part of the expense. The Network of Employers for Traffic Safety studied the combined cost of motor vehicle accidents to employers in 2000. The researchers found that medical expenses amounted to $7.7 billion, sick leave, life and disability insurance benefits totaled another $8.6 billion, while workers’ compensation claims costs approximately $2 billion for employers.

Totaled Vehicles and Insurance Payouts – What You Need to Know

Car accidents take their toll physically, mentally, and financially on those involved. Take the time now to learn about how insurance companies determine the value of your vehicle and you will have one less thing to worry about if your vehicle is ever “totaled” in an accident.

According to the car insurance industry, the term “totaled” doesn’t have as much to do with damage as you may think. When a vehicle experiences damage from an auto accident, the insurance company is more interested in the cost to repair the vehicle, rather than the overall amount of damage to the car. If the repair costs exceed what the insurance company considers the vehicle to be worth, the insurance company deems the vehicle to be “totaled” and the policyholder is paid the value of the vehicle. While most car owners are familiar will value guides like Kelly Blue Book and the NADA Official Used Car Guide, insurance companies generally refer to their own private databases when determining a vehicle’s value.

After making an assessment of your vehicle’s damages, the insurance company will make an offer which they feel is fair. The offer is meant to provide you the means to purchase a vehicle of the same style and condition of the one that was “totaled.” Insurance companies call this “making whole.” For example if you were driving a 5-year old pickup truck with 65,000 miles on it before the accident, your offer should provide you the money to purchase a similar truck with similar miles on it. As an informed policyholder, it is on your shoulders to make certain that your offer indeed makes your situation whole, putting you back behind the wheel of a comparable vehicle.

At times, insurance companies and policyholders cannot agree on a fair payout and drivers must turn to outside sources to help their case. Car owners can hire an independent appraisal service or take their case before an arbitrator. If considering having your vehicle appraised, factor the cost of the appraisal service into the equation and see if it is still a cost effective option. If you seek arbitration, keep in mind that there are binding and non-binding cases when arbitrating, and non-binding arbitration decisions can be appealed in court if you still consider the offer to be unfair.

In most cases, though, offers are easily agreed upon and your vehicle heads off to its final resting place – the salvage yard. Your vehicle will be dissected and sold for parts and scrap, with the insurance company keeping the profits. If you don’t want your car to meet this demise, you may opt to keep your damaged vehicle and pay for its repairs out-of-pocket, but this is not always the most economically wise decision.

Car owners who decide to keep their vehicle after it has been “totaled” receive a smaller payout from their insurance company. The offer is reduced by the amount of your deductible and the estimated amount of profits that would have been made from the salvage process. Owners who choose to keep their damaged cars run the risk of not receiving an offer large enough to get the vehicle roadworthy again. Re-insuring the vehicle will also be difficult in the future, as most insurance companies will only extend liability coverage to previously “totaled” vehicles, regarding they pass an inspection by the Department of Motor Vehicles.

Whether you choose to make the repairs yourself or have your vehicle salvaged, it is crucial that you understand how auto insurance companies operate before you are ever involved in an accident. By knowing this information, you will be prepared to get the most out of your vehicle, even if it is “totaled.”

Vicarious Liability: Your Employees Could Cost You!

Respondeat superior” is a Latin phrase that translates “let the master answer.” This is legal jargon relating to the breadth of the employer’s responsibility for the actions of his employees. Literally, and in basic terms, any injurious or wrongful act of an employee within the course and scope of his employment creates liability for the employer (the master). This is commonly known as “vicarious liability.”

An employer’s liability for injury or damage caused by employees is considered “vicarious” because the act was not committed by the employer, but by individuals for whom the employer is responsible. Just like a parent is responsible for the actions of a child, even if the parent had no knowledge of what the child was doing, so too is the employer responsible for the employee’s actions.

When crews are spread over several job sites, the employer loses some direct control over the actions of the dispersed employees; however, he is not relieved of his responsibility for the actions or inactions of these workers. The “master” will be required to financially stand up and answer for any injury or damage caused, even though he may not have been aware of those actions.

Within the framework of construction operations, the employer is obviously responsible for any work done incorrectly or poorly. For example, if an employee of a plumbing contractor does not properly cement or solder a pipe, leading to severe water damage from a break at the connection point, the employer is expected to pay for the damages.

Beyond simply being vicariously liable, the employer has the potential to be accused of “negligent entrustment.” Negligent entrustment can be asserted when an employer allows an unqualified person to use a dangerous instrumentality. Construction sites teem with dangerous instrumentalities; from items as simple as nail guns and power saws, to man lifts, grading equipment, and trenching equipment. Employers owe a duty to the employee, others on the job site, and even the general public to affirm an employee’s ability to safely and correctly operate equipment necessary for their job.

To avoid breaching this duty and allegations of negligent entrustment, the employer must test employees to confirm they are adequately trained to operate the equipment they are expected to use. This can be accomplished by observing the employee’s use of the equipment and correcting misuse. Observation and training should be done by a highly trained supervisor or by the supplier. The training must include detailed safety instructions and “what-if” scenarios. Once the employee has been “cleared” to use the equipment, continued observation is necessary to ensure the employee doesn’t become careless.

A common response to recommended training and testing is, “We don’t have time for that.” This may be true, but if you don’t have time to train, do you have time to go to court? Also, do you have the funds to pay the damages? Successful negligent entrustment suits often involve punitive damages that could drastically increase the cost for that particular incident.

Vicarious liability and charges of negligent entrustment aren’t limited to your employees. You may also face liability for the actions of entities or individuals to whom you sub-contract work. Making sure you hire qualified and properly insured subcontractors is of vital importance.

You, as the saying goes, are your employee’s keeper. Not due to lack of trust, but because you are ultimately responsible for the results and consequences of their actions. Choosing, training, and monitoring your employees and subcontractors will allow you to avoid or at least minimize many of the potential problems.

The Data is in – Distracted Driving is Dangerous!

In our high-tech world, there are more and more instances of driver distractions that contribute to car accidents, some of them fatal.   According to the National Highway Traffic Safety Administration, in 2008, there were an estimated 6,000 deaths and 500,000 injuries attributable to distracted driving. If anything, the actual number is likely higher because distractions can be hard to quantify and the true number of accidents caused by driver distractions is difficult to define.

Our changing driving habits and increased dependence on technology have steadily raised the number of potentially dangerous distractions. Consider the attention-diverters in your own car – radio and climate controls, cell phones and navigation systems. Matters are complicated further when there is more than one distraction, such as eating while trying to discipline a child in the backseat.

Furthermore, the National Safety Council released a white paper in early 2010, discussing the effects of cell phone usage while driving, and the news is not good.  The white paper pulled information from at least 30 different scientific studies, and the results showed that cell phones have quickly become one of the leading driver distractions, even when drivers opted for “hands-free” devices.  The NSC reveals that cell-phone usage causes the driver to multi-task and weakens the brain’s ability to capture driving cues.  The overwhelming result is impaired driving performance.  

Because of the grim data, many states have placed restrictions on drivers’ use of cell phones. The number of wireless phone users in the U.S. has grown from five million in 1990 to more than 200 million today, and surveys show that 85 percent of these people use cell phones when behind the wheel. In fact, calls from moving vehicles account for half of all cellular air time use.

So what can you do to avoid falling into this trap?  Below are some important anti-distraction tips:

* Keep your eyes on the road. Consider the possibility of turning your cell phone off while behind the wheel.

* NEVER text while driving.

* Keep your hands on the wheel by programming your favorite radio stations, and arranging tapes and CDs in an easily accessible spot. Don’t attempt to retrieve objects that have fallen on the floor while driving.

* Teach your children the importance of good behavior in the car.

* Avoid eating and drinking while driving. If you must, choose easy-to-handle foods and keep beverages in a nearby cup-holder.

* Designate the front-seat passenger to serve as navigator rather than fumbling with maps and navigation systems yourself.

* Take a break if you find yourself lost in thought.

* Avoid stressful or confrontational conversation while driving.

Limiting Your Liability for Summer Employees

According to the U.S. Department of Labor, 2.3 million workers between the ages of 16-24 years of age were hired for summer employment. On average, one of these summer employees will be injured on the job every five seconds. Most of these work related injuries are both needless and costly to the employer.

The three main causes for the majority of these injuries are due to inexperience, lack of training and inadequate supervision. There are a number of proactive steps that employers can take to limit their exposure and reduce their liability.

Steps to Take Beforehand

Business owners would be wise to develop safe working practices for summer help. Here are some simple but practical steps you can employ to reduce your costs from job related injuries this summer:

  • Ask yourself what hazards the summer worker will be exposed to, including any pertinent risks outside the immediate working area.
  • Consider carefully the personnel who are to be involved in the training process and ensure they are well versed in the training procedures.
  • Always try to assign an experienced worker as a supervisor and ensure they keep a watchful eye on the summer worker over the first several days.
  • Make sure that any equipment to be used is examined and operational beforehand. Ensure that all legally required equipment safety guards are in place.

Take the Time to Give an Adequate Safety Orientation

Even before on the job training begins, give all your new staff a safety orientation. Here are some of the most important points to cover:

  • Appoint someone to act as a safety coordinator to explain the applicable federal and state safety laws.
  • The safety representative should stress and encourage new employees to ask questions about any aspect of the job they don’t understand.
  • Ensure that your summer workers do not hesitate to report unsafe conditions or hazards and to whom.
  • Stress that newly hired workers should not engage in any job activity where they haven’t been properly trained. Emphasize that they must always think safety first.
  • Inform new workers not to leave there work area unless they’ve been told to do so. Describe and show the locations of first aid kits, emergency alarms and exits, fire extinguishers, emergency alarms, eyewash stations, and how and where to obtain medical help.
  • Instruct all workers using hazardous equipment or processes to always use required protective gear such as gloves, hearing protectors, safety visors, and hard hat or safety shoes.

Provide Thorough Training

By taking the time to train your summer workers with good training techniques, you can dramatically reduce the risk of injuries. Here are few points to keep in mind:

  • Assign an experienced worker to give the worker their full attention until fully trained.
  • Provide detailed instructions on how to perform all aspects of the job and encourage them to ask questions.
  • Demonstrate how each task should be performed and repeat it until understood. Observe how the worker performs the task and correct any mistakes.
  • Teach the worker how to properly lift heavy items, use ladders safely and how to avoid injury from activities involving repetitive actions.
  • Monitor the worker’s progress in the first few days as this is the time when most injuries occur.

By being proactive in orienting your summer workers, you can greatly reduce your liability exposure to work related injuries. Training takes a little time but it’s time well spent.

Check Your Homeowner’s Policy for Coverage on Your Special Vehicles

Millions of Americans own special vehicles for recreation, personal assistance, property maintenance, and for other purposes. Residents and visitors in snow belt regions use snowmobiles. Golf carts cruise around golf courses and around many residential communities. Individuals with limited mobility use motorized wheelchairs and scooters. All-terrain vehicles and dune buggies are always popular. These vehicles can be expensive to purchase and can become involved in accidents. Individuals who own and use them need insurance protection when something goes wrong. Fortunately, the standard homeowner’s insurance policy provides some of the coverage users need.

The homeowner’s policy does not cover legal liability resulting from the use of motor vehicles that are registered for use on public roads or property or that the law requires to be registered for use at the place where the accident took place. However, it does provide some coverage for vehicles designed to be used off public roads if either the user does not own them or if the accident occurs on an “insured location,” as the policy defines that term. The term includes the place where the person named on the policy (the named insured) resides, other residences he acquires during the policy term, premises he doesn’t own and where he temporarily resides, vacant land he owns or rents, land he owns or rents where he is building a residence, and other premises he occasionally rents for non-business use.

Therefore, the homeowner’s policy will cover him for liability resulting from the use of:

* A motorized wheelchair at his home and surrounding property

* A dune buggy at a beach house he’s renting for a week

* A snowmobile he owns on vacant land he owns

* An ATV he rents while he uses it on someone else’s property.

It will not cover him if he takes a vehicle he owns off an insured location.

The policy contains special provisions regarding golf carts. It covers the person’s liability for use of a golf cart he owns that is designed to carry at most four people and is not designed to go faster than 25 M.P.H. on level ground. Coverage applies only if the accident occurs at a golfing facility or at a private residential community where golf carts can legally travel on its public roads, subject to the authority of a property owner’s association, and where an insured person has a residence. Therefore, an individual has coverage if he strikes a person with his golf cart while driving from one hole to another or if he lives in a gated community and damages a neighbor’s deck with his golf cart. He does not have coverage if he takes out a mailbox while driving a golf cart down a public road.

The policy covers certain vehicles if the insured person uses them solely to service his premises. For example, he would have coverage for a riding lawn mower that he uses on his own property, but he will not have coverage for it if he also uses it to cut a neighbor’s grass. The policy covers vehicles designed to assist the handicapped, but only while they are being used to assist a handicapped person or while they are parked on an insured location. A healthy 15 year-old who takes a handicapped person’s scooter for a joy ride does not have coverage.

Because coverage for these vehicles is so situation-dependent, people who own them should discuss the best way to insure them with a professional insurance agent. In some cases, policy changes may be available that will improve the coverage for an additional premium. All motorized vehicles carry a risk of accidents, so it is important to have the right insurance protection in place.