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Most RV Owners Fail to Obtain Standalone Coverage

Purchasing an RV has become an increasingly popular way to vacation, especially for families. Models are available to fit most budgets, from folding travel trailers that cost, on average, close to $7,000, to conventional Class-A motor homes with an average price tag of over $140,000.

The one characteristic all RVs share is that they represent a sizeable investment for the purchaser. Despite this fact, according to a 2007 Progressive Insurance survey, most RV owners cover their vehicle under an auto policy, rather than secure standalone insurance coverage.

In the survey of more than 1,000 RV owners, researchers found that just 28 percent bought a standalone insurance policy with specialized RV coverage. Fifty-four percent of the respondents said they added the RV to their auto policy, and 14 percent said they didn’t obtain any coverage for their RV.

An RV is a hybrid vehicle that serves as both a home and method of transportation. As a result, it requires specialized coverage that combines the protections offered by both auto and homeowner’s policies. Rather than add your RV to your auto policy, consider insuring your RV under its own insurance policy. Without standalone coverage, you’ll have major gaps in your coverage. Consider the following:

·   You may keep personal items in your RV that you would never keep in your car, such as clothing, jewelry, binoculars, VCRs, satellite dishes, laptops, camcorders or outdoor gear.

·   When you park your RV at a campsite, you may be liable for the area around your RV. If someone is injured, you may be responsible.

·   If your RV is damaged while you’re traveling, you’ll need a place to stay and a way to get there.

If you insure your RV under a standard auto policy, none of these scenarios would be covered in the event of a loss, which could cost you a considerable amount of money.

When you insure your RV with its own policy, you can rest assured knowing that you have a broad range of coverage for a wide range of possible incidents.

Five Workplace Trends That Can Lead to Employee Lawsuits

Employers in today’s marketplace face many formidable competitive and legal pressures. In addition to holding onto market share, they must comply with environmental, safety, and trade practice regulations. Increasingly, they must also worry about legal challenges from their own employees. The job security that employers offered for decades has given way to a dynamic and sometimes unsettling work environment. Rising job insecurity has brought with it more frequent lawsuits from employees sensitive to perceived discrimination. Several trends in the workplace indicate that this will continue.

The baby boomer generation is reaching retirement age in rapidly increasing numbers; the youngest boomers are now in their mid-forties. The sheer size of this aging portion of the workforce, coupled with increased corporate downsizing, is producing accelerating numbers of age discrimination claims. The Equal Employment Opportunity Commission reported that the number of age discrimination complaints increased 15 percent in 2007. Employers that focus on hiring and promoting young people to keep themselves innovative may become targets for discrimination lawsuits from older workers.

The U.S. economy lost 1.2 million jobs in the first ten months of 2008, and economists expect the job market to remain weak for the foreseeable future. The end of a recession does not necessarily mean a return to a strong job market; job losses continued for almost two years after the 2001 recession ended. Mass layoffs invariably produce lawsuits from workers who feel they were treated unfairly. A sustained period of falling employment should increase the number of such actions.

Computer technology and Internet applications have had major positive effects on firms’ productivity. They have also created new ways for employees to suffer harassment (sexual and otherwise), privacy invasions, discrimination, and hostile work environments. Uncontrolled Internet access can allow workers to download offensive material that’s then used to harass colleagues. Vulnerable computer networks can permit unauthorized access to private employee information. Modern software and equipment can allow employers to monitor virtually every move employees make. As a result, more workers will take legal action against their employers when they feel their privacy has been invaded or when they believe that technology was used to discriminate against them.

In recent years, gay and lesbian workers have sought increased protections against workplace discrimination. Newly enacted state and federal laws and local ordinances have made it easier for these workers to pursue claims against employers. At least 17 states have statutes or court precedents that prohibit discrimination in private workplaces on the basis of sexual orientation. Continuing success in the legislatures and the courts will encourage more discrimination suits.

In 2007, the EEOC issued guidance on how federal laws apply to workers with caregiving responsibilities. Working parents may be subject to a variety of unfair treatments, including assumptions about pregnant employees; discrimination against working fathers and mothers; and sex-based stereotyping about working mothers. The agency and courts expect employers to make reasonable accommodations for working parents. Perceived failures to do so or perceived discrimination in hiring and promotions may cause affected employees to take legal action.

To reduce the likelihood of employee lawsuits, employers must implement policies and enforced procedures to prevent unfair discrimination. Another essential component is employment practices liability insurance from a financially sound insurance company. Employers face enormous challenges to survival and prosperity in the modern economy. With careful attention to their employment practices and the right insurance, they can make those challenges a little more manageable.

Hiring a Public Claims Adjuster to Handle Your Homeowner’s Insurance Claim

Imagine that your house has just been badly damaged by an earthquake, fire, hurricane, or other disaster. Not only can you not find your policy, but you can’t remember the last time you reviewed your coverage. Not that it matters, since most people don’t understand the terms of their policies because they are written in legalese. The good news is that with home or property damage, consumers can turn to public claims adjusters to interpret their policies and obtain a fair settlement from their insurance company.

You don’t need to hire an adjuster for minor damage, such as negligible smoke damage from a stovetop fire. However, you should hire an adjuster if your lifestyle is significantly disrupted. That is, bring in a public adjuster when you can’t handle finding new living arrangements, filing a large claim, and arranging for a survey of extensive damage to your property.

Public claims adjusters know the insurance process inside and out, so they can minimize the hassle that comes with collecting documents and evidence, and then negotiating with the insurance company. The adjuster will file all your pertinent paperwork with the insurance company, arrange for the inspections of your damaged property if needed, and haggle with the insurance company if it refuses to pay your full claim.

If you do decide to have a public claims adjuster help you out with your claim, expect to pay them between 5 and 50 percent of your claim settlement. As the settlement amount increases, the adjuster’s cut generally goes down.  Adjusters’ fees also depend on the nature of the claim and your marketplace.

What you should look for when hiring an adjuster:

-Experience is a must

-Check the adjuster’s certifications

-Do a background check

-Ask for a referral from a friend

-Confirm the adjuster is licensed in your state (if applicable)

How do you know if you need an adjuster? Depending on who you talk to, you may or may not need a public adjuster. One piece of advice is to seek a public adjuster’s service as soon as possible. Often it’s nearly impossible for consumers to know what to expect from an insurer in a homeowner’s claim situation, even after they read their policies. In addition, it’s difficult for an adjuster to come in after a claim is already being processed. On the other hand, insurers contend that their claims staffs are professionals who make the claims process easy for their policyholders, and they assert that it’s questionable whether a policyholder comes out ahead when the adjuster’s fee is subtracted.

Responding to Reports of Sexual Harassment

Sexual harassment is a serious issue for all organizations. It demeans and humiliates the targets, lowers workplace morale and reduces productivity as employees spend energy worrying about the latest offense rather than furthering the business. It can also inspire employee lawsuits, bad publicity for the organization, and criminal charges. Even the best of organizations may face incidents of sexual harassment at some point. If it happens, how the organization responds is of the utmost importance.

The organization must take every report of harassment seriously. Brushing off a worker complaint as frivolous could be the basis for future legal action. The person receiving the complaint must judge it by two standards. First, would a reasonable person be offended by the alleged conduct? Second, did the person making the complaint actually take offense at the alleged conduct? If the answer to both questions is yes, the organization should conduct a more in-depth investigation.

Harassment complaints fall into three general categories. In full-fledged complaints, the complainer firmly believes she has been harassed, wants it stopped, and is willing to provide details as to what happened. “For your information” complaints involve employees who don’t necessarily want the employer to do anything, and are unwilling to provide details. Anonymous complaints may provide great detail or none, may be legitimate or complete fiction, and may or may not be from employees. Regardless of the type of complaint, the organization should take it seriously and investigate thoroughly.

Once it has determined that harassment occurred, the nature of the organization’s response depends on the seriousness of the offense. Less serious offenses include jokes, teasing, off-color comments, cartoons and photos, and profanity. The offender may not have intended harm toward anyone. Unless he has habitually done these things despite warnings, a reprimand may be in order. More serious are uninvited and unwelcome physical contacts (hugs, kisses, pats on the butt, etc.), acts directed at a particular person or group of people (repeated comments about a woman’s clothing), and intentionally harmful actions or words (insults about a person’s sexual preference.) Some may require disciplinary action at the first offense (touching a woman’s breast), while others may deserve a reprimand unless repeated (insults).

The most serious offenses involve deliberate physical, mean-spirited and possibly criminal acts. Grabbing, forcible kissing, lewd exposure and attempted rape are all examples of this kind of conduct. These may warrant immediate disciplinary action and may require involvement from law enforcement officials.

The organization should assign the investigator based on the seriousness of the alleged offense. A supervisor may be sufficient for less serious offenses like e-mailed jokes or suggestive calendars. Acts like sexual insults, unwelcome advances and demands for sexual favors call for the involvement of upper management. The most serious offenses may require hiring an outside investigator or attorney; alleged criminal conduct will necessitate getting the police involved. In addition, the worker making the complaint may prefer speaking to someone of the same sex, of a certain age, or who shares the worker’s background. Organizations may want to have a group of people prepared to investigate claims so they can deal with such requests. However, all investigators must remain objective and free from bias toward either party.

A response appropriate to the situation is vital to an organization’s reputation, future employee relations, and vulnerability to lawsuits. The organization’s advance preparation will make this easier and may make it more attractive to insurance companies that provide employment practices liability insurance. Ultimately, the seriousness with which an organization treats the possibility of sexual harassment may discourage it from happening in the first place.

Keep Track of What You Own with a Home Inventory

If you suddenly experienced a catastrophic incident where all of your possessions were destroyed, would you be able to remember everything you’ve accumulated over the years? Like most people, your answer is probably “no.” That’s why having an up-to-date home inventory is so important. It can help you settle your insurance claim faster, because it represents an accurate and immediate accounting of what you lost. A home inventory can also be used to determine if you have enough insurance to replace the items you own, as well as verify losses for your income tax return.

To help you create an accurate home inventory, the Ohio Insurance Institute offers the following guidelines:

·   Use your wedding registries to document new possessions if you have just been married.

·   Update your inventory regularly, adding new items when you buy them. Be sure to keep receipts and take photos.

·   Take close-up shots of expensive items such as jewelry, fine art, stamp collections, china, furs, antiques and silver. Items, like artwork, antiques and collectibles may increase in value over time. They may require appraisals for authentication and value.

·   Don’t forget to inventory the contents of closets, drawers, the basement, the garage and outbuildings.

·   Include toys and CDs in your inventory.

·   Copy the inventory onto a disk/CD and store it off-premises in a safety deposit box or at a friend or relative’s house.

·   Be sure to delete items from your inventory when they are no longer in your possession.

·   Update your inventory every few years, when you move, or when you make a major home improvement.

Home inventory software is available that allows you to add digital photographs of your items. If you only own a film camera, you can scan print photographs or have the film developer save the images to a disk. The software also allows you to scan in copies of your receipts.

Another way to create an inventory is with a video camera. Walk through your house or apartment videotaping the contents and describing the items as you go, including information like the make and model of home electronics and appliances, or the type of upholstery fabric used for expensive furniture. You can do the same task using a tape recorder; however, be sure to have detailed photographs that serve as a backup to the verbal descriptions.

A third way to create a home inventory is to use a personal finance software package. These often include a homeowners room-by-room inventory program.

Does Contractual Liability Coverage = Additional Insured Coverage?

Construction contracts usually include many provisions aimed toward transferring legal liability from one party to another. In an agreement between a general contractor and a subcontractor, the sub assumes the general’s liability. The contract does this by inserting an indemnity agreement (also known as a hold harmless agreement) into the contract’s terms. The contract may also require the sub to have the general named as an additional insured on its general liability insurance policy. Though not all contracts do this, it is a mistake for either contractor to assume that the insurance company will provide the same protection to the general without an additional insured endorsement to the policy.

The standard Insurance Services Office Commercial General Liability Coverage Form specifically excludes coverage for liability the insured assumes in a contract. However, it adds coverage back if the contract is an “insured contract,” as the policy defines the term. The policy’s definition includes hold harmless agreements where the insured assumes another’s tort liability. That would appear to take care of the sub’s obligations under the contract, but it is not the whole story. The coverage may still contain a potentially large gap for the general.

It is important to keep in mind that, in any liability insurance claim scenario, the parties fall into three categories: Insurance company; insured; and claimant. A claim may involve multiple insureds, multiple claimants, and even multiple insurance companies, but all parties will fall into one of the three categories. If a party is not an insurance company and is not an insured by virtue of an additional insured endorsement, then it must be a claimant. Therefore, a general contractor in this situation becomes a claimant along with all other claimants seeking damages.

While the general may receive the same recovery for damages that it might have received as an additional insured, it might not fare as well regarding the cost of its legal defense. The CGL policy pays for defense costs incurred by anyone who is an insured under the policy, and coverage for those costs is in addition to the policy limits. If the policy has a limit of $1,000,000 per occurrence and an insured is found liable for $1,000,000 and runs up $500,000 in defense costs, the policy pays for both in full. As a claimant, however, the general can recover defense costs only if the hold harmless agreement with the sub required the sub to indemnify it for defense costs.

Also, it is likely that coverage for those costs will not be in addition to the policy limits. The ISO CGL policy provides defense in addition to the limits for the general only if all of the following conditions are met:

  • The sub assumed the general’s liability in an insured contract;
  • The policy covers the loss;
  • The sub assumed the general’s defense costs in the contract;
  • There is no conflict of interest between the general and the sub;
  • Both parties ask the company to control and conduct the defense and both agree to the same counsel for defense; and
  • The general agrees in writing to cooperate with the insurance company in the settlement of the claim.

If any one of these conditions is not met, the company will pay the general’s defense costs only until the claim exhausts the insurance limits.

Coverage for defense costs is one of the most important benefits of being named as an additional insured on another entity’s liability insurance. An entity that needs this coverage should require the other contractor to provide the additional insured endorsement. Relying on the contractor’s contractual liability coverage is a major financial gamble.

Protect Yourself Before Disaster Strikes

Tornados that have recently devastated parts of the Midwest could pop up anywhere. While there is generally little to no warning before these storms strike, there are some steps you can take to protect your family and your home from disaster.

1: Construct a safe room

Homeowners living in an area known for tornados should consider a safe room, which is built to withstand wind speeds of over 250 miles per hour. Usually, a safe room is located in a central, ground-floor area of the home for additional protection as well as accessibility. To find out more about safe room plans, check out the Federal Emergency Management Agency at www.fema.gov.

2: Reinforce the garage

Most residential tornado damage starts when wind enters through the garage, so you should make sure your garage doors are reinforced.

A qualified contractor can determine if the garage door system is able to resist high-speed winds and, if necessary, replace it with a stronger system. If your garage doors are more than eight feet wide, you should consider installing permanent wood or metal stiffeners.

3: Install impact resistant doors and windows

If you are replacing your patio doors or building a new home, consider installing impact-resistant doors made of laminated glass, plastic glazing or a combination of plastic and glass.

Likewise, if you’re thinking about replacing your home’s windows, be sure to install impact-resistant windows.

4: Remove clutter from the yard

Keeping your yard free of debris can also help to minimize storm damage. Prune weak branches and remove trees that could fall on your house. If you use gravel or rock landscaping material, consider replacing it with mulch.

Minimizing Pollution Liability for Truckers

Motor carriers (or “truckers”) are vulnerable to severe and costly auto accidents due to the size of the loads they often carry. These accidents may result in injury or death to occupants of other vehicles or pedestrians, or they may cause significant property damage. Even more ominous is the possibility of environmental damage caused by the release of dangerous substances that are part of the trucker’s cargo. Federal law regulates how these firms must meet their financial obligations for these accidents.

Congress enacted the Motor Carrier Act of 1980 to deregulate the trucking industry. In addition, the law established minimum limits of liability insurance coverage that certain motor carriers must carry. The coverage must apply to claims for bodily injury, property damage and environmental restoration arising from accidents that occur while the carrier’s vehicles are transporting property. The limits required vary by the type of property the carrier transports and whether or not the carrier operates for hire. For-hire carriers of non-hazardous substances must carry limits no less than $750,000; for-hire and private carriers of certain hazardous substances must carry at least $1,000,000, while other carriers must carry at least $5,000,000.

Unfortunately, standard policies for truckers are inadequate to meet these obligations. A trucker’s insurance policy typically does not cover liability arising out of the escape of pollutants that the insured is transporting. The policy will cover the insured’s liability for damage caused by fuel or fluid leaks from a vehicle’s systems and pollution damage arising from some vehicle maintenance, but this limited coverage does not meet a trucker’s obligations under the MCA.

The MCA, in addition to the minimum limit requirements, mandates that truckers have a special endorsement (form MCS-90, Endorsement for Motor Carrier Policies of Insurance for Public Liability) attached to their policies. This endorsement obligates the insurance company to pay for the trucker’s public liability regardless of whether or not the policy describes each motor vehicle and whether or not a regulator permits the trucker to serve that particular route or territory. The form defines “public liability” as including bodily injury, property damage and environmental restoration. “Environmental restoration” means restitution for the loss, damage, or destruction of natural resources arising out of the accidental release of any commodity transported by a motor carrier on the land, atmosphere, watercourse, or body of water. It includes removal costs and the cost of necessary measures to minimize damage to human health, the natural environment, and animals.

The MCS-90 endorsement does not expand the trucker’s policy’s pollution coverage; in fact, it requires the trucker to reimburse the insurance company for payments it makes that the policy would not require if not for the endorsement. To avoid having to make a large reimbursement to the company, the trucker should ask the company to add another special endorsement to the policy. The endorsement, titled Pollution Liability – Broadened Coverage for Covered Autos, reinstates coverage for the insured’s liability for the release of pollutants that the insured is transporting. Coverage does not apply to liability that the trucker assumed under a contract. However, the additional coverage brings the trucker into compliance with the MCA’s requirements and eliminates the possibility that the trucker will have to reimburse the company for losses.

Due to the potential for very large losses from pollutants, the number of insurance companies willing to offer this endorsement is relatively small. Motor carriers subject to the MCA’s requirements should work with insurance agents who have expertise in this area. They will be familiar with the coverage needs of trucking firms and may represent insurance companies that insure truckers.

FTC Says Credit Scores Are a Valid Risk Predictor for Auto Insurance

A report issued by the Federal Trade Commission (FTC) says that credit scores are an “effective predictor” of risk when underwriting auto insurance. The study titled, Credit-Based Insurance Scores: Impact on Consumers of Automobile Insurance, confirms what industry professionals have always believed, that credit-based insurance scores provide an objective and reliable tool for determining which drivers present a greater risk and should therefore pay higher rates.

Insurance companies have always tried to correlate premium rates as closely as possible to the actual cost of claims. This practice helps insurers stay competitive and keeps them from hemorrhaging money. The majority of consumers also benefit from this correlation because they are not subsidizing people more likely to file claims than themselves.

Credit information has been used for a number of years to help underwriters decide whether or not to accept insurance applications. Developments in information technology have led to the creation of insurance scores, number rankings based on a person’s credit history, which give insurers a far more accurate way to assess the risk of future claims.

Statistically, people with a poor credit history are more likely to file claims. Insurance scores are used to help underwriters differentiate between lower and higher insurance risks, which enables them to charge a premium appropriate for the level of risk assumed.

However, some in the insurance industry oppose this technique because they feel credit scores don’t always present an accurate picture of a person’s credit history. Credit scores don’t reflect the good payment records of consumers who pay their bills in cash. Credit scores may also provide an incorrect image of consumers who normally have good credit, but have been negatively impacted by one-time unexpected events, such as medical emergencies.

Despite these instances, the FTC report says the use of credit-based insurance scores provides benefits for consumers.Evaluating credit scores allows insurance companies to calculate risk with greater accuracy. This enhanced capability may make them more willing to offer insurance to higher-risk consumers for whom they would otherwise not be able to determine an appropriate premium.Using credit scores also may make the process of granting and pricing insurance quicker and cheaper, cost savings that can be passed on to consumers.

Avoid Lawsuits When Laying Off Workers

With the U.S. economy in recession, companies are trying to make up for declining sales by reducing expenses. Workforce reductions, though they may improve short-run profits, may also cause long-term problems if the firm does not handle them with care. Angry former employees may look for justification for legal action. The employees who remain will take on extra work with no additional compensation, while they deal emotionally with the loss of colleagues and fear that the job cutting will eventually hit them. Consequently, companies must approach layoffs with caution.

The company must first determine whether a layoff is the best option. While it may quickly reduce costs, it may also cause the company to dismiss valuable workers. This will hurt long-term productivity, lower the morale of the survivors, and wipe out valuable institutional knowledge. There is also a risk that a layoff will unfairly affect older or minority workers, which could lead to discrimination complaints. Therefore, the company should look at alternatives such as hiring and wage freezes, adjustments to employee benefits, not replacing workers who leave or retire, and job sharing.

If the company decides that it must reduce its workforce, several careful steps are required;

 

  • Establish a specific goal for the layoff to achieve, such as a dollar amount of savings or number of positions.
  • Identify those job functions and skills that it will need to operate successfully after the layoff.
  • Set a timetable so that the reduction has a clear end.
  • Comply with federal and state labor laws.
  • Determine which jobs are unnecessary and eliminate them.

When determining which employees to dismiss, the company may legally use criteria such as length of service with the company, the necessity of a certain job classification, employee status (i.e., part-time or temporary), or employees’ performance records. Management should review candidates for dismissal to ensure that the cutback does not disproportionately impact classes of employees protected by law. If managers can find no other compelling business reason for terminating those employees, they must seek out alternatives.

Once managers have made selections and the decision to proceed, they must inform the affected workers in a professional manner. They should be able to clearly explain the reasons for the action; workers’ entitlement to benefits such as severance, health coverage, and others; and post-employment services available to the workers, such as outplacement. The workers may express emotions ranging from stunned silence to rage; the managers must be prepared to deal with their reactions in a businesslike manner. Remaining employees will have concerns about their own futures and the firm’s outlook. Management should, to the extent possible, explain the reasons for the layoff, the likelihood of additional job cuts, and the business goals the firm seeks to achieve through the layoffs.

The company must take particular care when the layoff involves older employees. Severance packages usually require the employee to waive his right to press a claim under federal law. However, regulations impose procedural requirements that an employer must meet before a court will consider the waivers valid. Companies must take special care to meet those requirements.

Shrinking a company is an unpleasant prospect that no manager relishes. Employee lawsuits may well result from a workforce reduction. However, if the firm handles the action with care and sensitivity, it can make such claims less likely and will be in a better position to defend itself against claims that do arise.