Employer Liability for Employee Cell Phone Use on the Rise

Employers are facing increasing liability as a direct result from their employees’ cell phone use. So why is this the next legal frontier? The number of lawsuits involving employer liability for traffic accidents caused by employee cell phone usage is steadily growing, as well as lawsuits based on health problems associated with cell phone use.

The principal of vicarious liability states that an employer is responsible for the harm caused by its employees if the employees are acting within the scope of their employment at the time an accident happened. In this situation, a company can be held accountable by a third party for auto accidents caused by an employee’s cell phone use if the company provided the phone or if the cell phone is an integral part of the employee’s job. The company can even be held liable for incidents resulting from personal calls made by employees on company-issued cell phones, or phones inside company cars.

There is also an emerging trend establishing that an employer can be found directly negligent if it allowed employees to use cell phones for business without proper training or in spite of safety issues, and an accident results.

Another exposure resulting from employee cell phone use is the rise in the number of claims brought by employees for health problems associated with their cell phones. Employees who consistently use cell phones as part of their job are filing workers’ compensation claims and lawsuits alleging that radio frequency radiation from cell phones causes brain cancer.

The scientific evidence concerning whether or not cell phone use increases the risk of cancer is inconclusive. There are two studies that are most frequently quoted, and their results are contradictory. A study conducted at the Danish Institute of Cancer Epidemiology, whose results were released in December 2006, followed the health of over 420,000 cell phone users over the course of 21 years to determine if cell phone use causes cancer. The researchers concluded that the radio frequency energy produced by cell phones did not increase the risk of contracting brain cancer. However, a April 2006 study conducted by the Swedish National Institute for Working Life, examined the cell phone usage of 905 adults who developed malignant brain tumors. They found that people with more than 2,000 hours of total talk time had 3.7 times the risk of developing brain cancer as compared with non-users. The study also found an increase for tumors specifically on the side of the head where the cell phone was used.

While there is no way to alleviate all potential liability arising from cell phones in the workplace, companies can offer employees training on the safety issues and possible health risks associated with using cell phones. Promoting a safe workplace is a simple way to reduce the number of accidents and health risks associated with cell phones.

When You Shop for a New Car, Consider Safety Ratings

Most people know that the federal government enforces certain safety standards for new cars. However, these are only the minimum standards a car manufacturer must satisfy in order to have its vehicles considered safe. Many automakers offer safety features beyond the required federal minimums. When shopping for a new car, you should look for a vehicle that offers the maximum safety features in your price range.

The following list of safety features should be considered when you are shopping:

·   Crashworthiness – This rating indicates the level of risk of death or serious injury if a crash occurs. Log on to the Insurance Institute for Highway Safety’s web site at www.iihs.org/searchresults.aspx?q=crashworthiness for more information about the various models.

·   Structural design – Look for a structural design that has a strong occupant compartment. The vehicle should have front and rear ends that buckle and bend in a crash to absorb the force of the crash. This keeps the occupant compartment from collapsing. If the occupant compartment collapses, the likelihood of injury increases significantly.

·   Size and weight – Larger and heavier cars are safer than lighter and smaller models. In crashes where smaller and larger vehicles collide, the larger vehicles drive the smaller ones backwards, which increases the forces in the smaller vehicles.

·   Restraint systems – Shoulder belts, airbags and head restraints are designed to work together with a vehicle’s structure to protect people in crashes. Shoulder belts keep you in place, reducing the possibility of your body slamming into something hard or being ejected from the vehicle. Airbags reduce the risk of the head and upper body hitting some part of the vehicle’s interior. They also distribute crash forces more evenly across your body. Head restraints keep your head from being violently snapped, which would injure your neck in a rear-end crash.

·   Anti-lock brakes – Conventional brakes may cause wheels to lock if you brake too hard. This can result in skidding and possible loss of control of the car. Anti-lock brakes pump brakes automatically many times a second to prevent locking and keep you in control. While anti-lock brakes help you maintain steering control, they don’t necessarily help you stop more quickly.

·   Daytime running lights – These are usually high-beam headlights at reduced intensity or low-beam lights at full or reduced power. These lights prevent daytime accidents because they increase the contrast between the vehicle and its background, which makes the car more visible to oncoming drivers.

·   Miscellaneous factors – Other design characteristics can influence injury risk. The structure of some small utility vehicles and pickups make them more likely to roll over during a crash. High performance cars tend to have higher-than-average death rates because drivers, especially young ones, speed when they are behind the wheel. You should examine the design features of any new car you are considering to be sure that they are appropriate for everyone who will be driving the car. 

Key Considerations When Obtaining Builders’ Risk Insurance

Savvy contractors understand the key points of workers’ compensation, especially on controlling losses and managing the premiums. They are also likely familiar with commercial auto and general liability insurance, as construction contract issues tend to center around these coverages. But builders’ risk insurance is often a little more daunting for contractors because it’s not top of mind.

Builders’ risk policies cover property during the course of construction and may cover materials in transit to the job site and in temporary storage awaiting installation. When considering the purchase of a builders’ risk policy, a contractor should weigh several factors, including contract requirements, the property and locations in question, the parties who need coverage, and loss exposures that are time-sensitive.

The construction contract should contain the insurance requirements for the project. For example, it may specify that the builders’ risk policy cover certain causes of loss, such as earthquake and flood damage, that the insurer’s standard policy will not cover without modification. It may also require that coverage be on a replacement cost basis and that the insurer must waive subrogation rights against the project owner. The contractor should carefully review the contract and discuss the coverage requirements with his insurance agent.

The contractor must also determine what property he needs to cover. If he is building a new building, he will need insurance on the building materials, foundation, temporary walls and their supports, scaffolding, and other equipment. If the project involves rehabilitation or renovation of an existing building, such as the conversion of an old office building to condominiums, he will need coverage for the old structure as well as the improvements. How the insurance company will determine the existing structure’s value is an important question – some companies may subtract depreciation from the building’s replacement cost which could leave the contractor with a large uninsured exposure. As such, he should negotiate for replacement cost coverage whenever possible.

The construction contract will usually require the policy to cover the project owner, general contractor and even some or all of the subcontractors. The contractor should determine whether the policy covers material suppliers. If not, he should consider additional insurance to cover loss of income in case one of the suppliers shuts down temporarily due to property damage. He should also determine how the policy will respond if faulty work by a subcontractor causes damage to other parts of the building. Not all policies will pay if a sprinkler subcontractor installs a pipe fitting improperly and an entire floor gets flooded.

The last two major considerations are the locations to be covered and coverage for extra costs resulting from a construction delay, which was caused by a covered peril. In addition to the project site, the contractor should inquire about coverage for property in transit to the site and property stored off-site. Building materials could be damaged if a supplier’s location is damaged by fire or if the train carrying them derails. Extra costs resulting from a delay, known as “soft costs,” can be a significant exposure. For example, leases may need to be renegotiated or replaced, construction loans may have to be extended, or additional equipment may have to be rented. If the contract makes the contractor responsible for these costs, this coverage can be critical.

Because builders’ risk insurance has so many unique considerations, contractors should address them before starting work on the project. These policies will differ from one insurer to another, so careful review is essential. Attention to details before work begins will reduce the chances of uninsured losses and contractual disputes.

Three Questions to Determine Whether Your Home Is Properly Insured

Homeowners are always being advised to update their property insurance annually because any home alteration or lifestyle change, such as marriage or divorce, can affect the amount of coverage needed. While it is important to complete that yearly review, it is equally important to know what questions you should ask your agent to ensure you have the right coverage for your circumstances.

According to the Insurance Information Institute (I.I.I.), there are three key questions you should always ask:

1.   Do I have enough insurance to rebuild my home? – Buying just enough insurance to meet your mortgage lender’s requirements could mean that you are inadequately covered should you need to rebuild your home at current prices. To have real protection, you need to consider the following types of coverage:

§      Replacement Cost Policy – A replacement cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality.

§      Extended Replacement Cost Policy – This extends your coverage another 20 percent or more above your stated policy limits. This additional insurance can be extremely important if your home is one of many damaged in a disaster, because a widespread disaster can result in increased costs for building materials and labor.

§      Inflation Guard – This coverage automatically adjusts the policy limits for rebuilding costs as construction costs rise.

§      Ordinance or Law coverage – If your home is badly damaged and requires rebuilding under new building codes, ordinance or law coverage will pay a specific amount toward any additional costs involved in meeting the new code requirements.

§      Water Backup – This coverage insures your property for damage from sewer or drain backup. 

§      Flood Insurance – Standard home insurance policies do not include coverage for flooding. Flood insurance is available through the federal government’s National Flood Insurance Program (http://www.floodsmart.gov), but can be purchased from the same agent who provides your homeowner’s insurance. Make sure to purchase flood insurance for the structure of your house, as well as for the contents.

2.   Do I have enough insurance to replace my possessions? – Most insurers provide coverage for personal possessions equal to 50 percent to 70 percent of the amount of insurance on the dwelling. The best way to determine if this is enough coverage is to conduct a home inventory. A home inventory is a list of everything you own and the estimated cost to replace these items if they were stolen or destroyed.

You can insure your possessions in one of two ways:

a.            Cash Value Policy – This coverage pays the cost to replace your belongings minus depreciation.

b.            Replacement Cost Policy – This coverage pays the full cost of replacing your belongings at current prices.

3.   Do I have enough insurance to protect my assets? – Homeowner’s insurance provides you with basic liability coverage. This protects you against lawsuits for bodily injury or property damage that you, your family, or your pets may cause to other people. Liability insurance pays for the cost of your legal defense and for any damages a court rules you must pay, up to the stated limits of your policy. Most homeowner’s insurance policies provide a minimum of $100,000 worth of liability insurance. If the standard liability coverage isn’t sufficient, you may need an excess liability policy, which provides additional coverage over and above what is covered by your homeowner’s insurance policy.

Tips on Spotting Workers’ Comp Fraud

Spotting the red flags that indicate possible workers’ compensation fraud by employees is the best way to prevent fraud from occurring. Knowing how to spot the red flags is a proactive way to nip a potentially costly but false workers’ compensation claim before it begins.

Most instances of workers’ compensation fraud occur when the claimant:

  • Deliberately falsifies information about how an injury occurred, such as claiming the injury was work-related when it was not,
  • Deliberately amplifies the seriousness of an injury to falsely prolong the claim, or
  • Deliberately continues to collect entitlements while working on the sly for their own purposes or with another employer.

Common Signs of Workers’ Compensation Fraud

  • Lack of witnesses – The majority of people claiming false work-related injuries usually do not have witnesses to support their claim. Vigilance is especially necessary when the employee normally works with other co-workers who should have witnessed the injury but did not.
  • Contradictory accounts of how the injury occurred – This can be particularly blatant when any of the doctor’s, employer’s, or witnesses’ reports contradict the employee’s report of the incident. Another red flag should be raised when the employee is deliberately vague about how the injury occurred.
  • Dissatisfied employees – Unhappy employees can be motivated to make a false workers’ compensation claim, especially if a recent incident such as a reprimand, changed responsibilities, or a possible demotion has occurred.
  • Time occurrence of the injury – Many false workers’ compensation claims are submitted before a potential strike, project conclusion, strike, or possible layoff. Many false claims also happen to be submitted on either a Friday or a Monday.
  • Inconsistent injury – The nature and extent of the injury is not consistent with their duties or type of job performed.
  • Inconsistent reporting procedures – Occurs when there is an inexplicable gap between when the injury occurred and when the employee reported the injury. Be alert if crucial injury data is absent, such as no definite time reported when the injury happened or if other vital dates are absent.
  • Lack of contact – The employee cannot be easily contacted by the claims rep or employer. Continuous lack of contact might be indicative the employee is working elsewhere while receiving ongoing entitlements. Another red flag should be raised when the employee immediately moves to another state or foreign destination after going on workers’ compensation.
  • Lack of cooperation – The employee deliberately delays or avoids medical treatment or medical diagnostics needed to clarify the medical condition of the employee’s alleged injury.
  • Physical signs – The employee exhibits physical signs of working such as dirt or grease on their hands or fingernails, work clothes that exhibit traces of work, or scrapes or bruises.
  • Newer employee – From a statistics vantage, new employees are more likely to commit workers’ compensation fraud than senior employees. The most proactive means to counter this is to carefully screen all new employees in the hiring process beforehand.

Although red flags can help minimize potential workers’ compensation losses from fraud, your best strategies to counter this problem should include:

1.   Implement a Zero Tolerance policy for workers’ compensation fraud and be sure your employees know about it.

2.   Take a hands on approach with all workers’ compensation claims and become especially vigilant when red flags appear.

3.   Keep in regular communication with your injured employee.

4.   Have a consistent new employee screening process. Offer new employees a thorough orientation and communicate a comprehensive explanation of the workers’ compensation process along with the employee’s rights and responsibilities.

Fraudulent workers’ compensation claims are a severe drag on the costs of any business. By being aware of how to spot potential problems and being proactive at the outset can help you reduce workers’ compensation fraud in the workplace.

Tips for Buying Homeowner’s Insurance

Considering that for most people a home is their largest asset, they understand the importance of protecting their investment with homeowner’s insurance. What they may not know, however, is that insurers offer numerous discounts based on various factors ranging from the type of building material used to your home’s proximity to a fire station. Keep in mind that while multiple opportunities exist for premium discounts, not every discount is available in every state or with every insurance company.

When shopping for homeowner’s insurance, you should follow these tips:

·   Accept a higher deductible – When you file a claim, the deductible is the amount you pay personally toward the loss before the insurer pays the balance of the claim. Deductibles on most homeowner’s policies start at $250. If you raise your deductible, your premiums will be lower. However, before you accept a higher deductible, be sure you can afford the additional out of pocket.

·   Use one insurer for both your homeowner’s and auto policies – Most insurance companies offer multi-policy discounts.

·   Consider the cost of insuring any home before purchasing – The geographic location of your home has a significant impact on the amount you pay in premiums, especially if your home is located in an area frequently hit by natural events that cause large scale damage. The age of the house will also play an important role, as does the age of the electrical, heating and plumbing systems. Older structures, pipes and electrical wiring pose a greater risk.

·   Buy insurance coverage for your home, not the land it sits on – Never include the land value when you calculate how much insurance you need.

·   Be sure your home is safe and secure – Dead bolt locks, burglar alarms, and smoke detectors generally qualify you for premium discounts. Your insurance company may also offer an even larger discount if you install a home-security system. Check with your insurer to see which systems entitle you to a discount before proceeding.

·   Stop Smoking – Smoking increases risk of fires. Some insurers offer discounts if your family is tobacco free.

·   Ask about discounts for seniors – Retired people stay at home more, so they can spot fires sooner. Older people also spend more time maintaining their homes.

·   Review your policy each year – Any improvements you have made to your home should be reflected in your coverage. Talk to your agent about increasing your coverage as necessary.

Don’t Rely on Insurance to Cover Bad Work

Construction accidents often result in damaged property. Fires from faulty wiring scorch walls, paint sprays onto cars, and collisions dent earth-moving equipment. When something goes wrong, the contractor will look to his commercial general liability (CGL) policy to pay the costs of repair or replacement. However, while this policy covers many types of property damage claims, it will not cover every situation.

Before the CGL policy will provide any coverage for claims like these, three things must be true. First, the contractor must be “legally obligated” to pay damages. Liability insurance covers the contractor’s tort liability; that is, liability for negligent acts. Is the injured party claiming that the contractor was negligent in performing the work? If the answer is yes, then the CGL policy may provide coverage. If the claim is for failing to complete the work, however, there is no coverage.

Second, the damage must arise out of an occurrence, as the policy defines that term. The standard CGL form defines occurrence as, “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Therefore, for coverage to apply, the damage must be accidental. If the insurance company determines that there was no accident, it will not provide coverage. For example, the company would not cover a component that simply fails to work after installation.

Third, the accident must result in property damage. The policy defines property damage as “physical injury to tangible property, including its loss of use, and the loss of use of tangible property that is not physically injured. Damage to a third party’s building, for example, is property damage. Loss of that party’s computer data is not, however, because the data is not tangible property.

If property damage arose out of an occurrence and the contractor is legally liable, the policy may still not cover the claim if it falls within the category of faulty workmanship. The policy does not cover a contractor’s liability for property damage to “that particular part” of real property on which the contractor or one of his subcontractors is working if the damage resulted from that work. For example, assume a contractor is repairing the wiring to a chandelier in a banquet hall. During the installation, the chandelier falls and damages the hall’s hardwood floor. The policy will not cover the damage to the chandelier because it was “that particular part” of real property on which the contractor was working. However, it will cover the damage to the floor.

The definition of “that particular part” can be unclear. The insurance company may argue that there is no coverage for a roofing contractor who accidentally starts a fire and burns most of the roof. Is the entire roof “that particular part,” or is it just the one section of the roof where operations were taking place? The policy’s language does not resolve the question.

Another policy provision is much clearer. It states that there is no coverage for damage to “that particular part” of any property that must be restored, repaired, or replaced because the contractor performed his work on it incorrectly. This provision applies to both real and personal property. Therefore, the policy will not cover replacement of the chandelier if it does not work after the contractor repairs it.

A contractor should always address questions about insurance coverage with his insurance agent. An inland marine insurance policy can cover some types of property damage losses not covered by liability insurance. Other types of losses will have to be paid out of the contractor’s pocket. Be sure you know what you can expect from your insurance coverage in all situations on the job site.

Don’t Wait Until It’s Too Late to Dust Off Your Homeowner’s Policy

If you’ve never thoroughly reviewed your homeowner’s policy, you could find yourself out of luck at your time of need. When you bought your policy, you assumed it would provide the necessary funds needed to recover from a disaster.  However, if you are unfamiliar with your policy’s terms and conditions, you may not have as much protection as you think.

The standard homeowner’s insurance policy includes four basic types of coverage:

·   Coverage for the structure of your home – If your home is damaged or destroyed by fire, lightning, windstorm, or other peril listed in your policy, your insurer will pay to repair or rebuild your home subject to the terms of your coverage. However, if the damage is caused by a flood, earthquake or mudslide, there would no coverage unless you had purchased a separate policy for these risks.

Most standard policies also cover detached structures such as a garage. Coverage for these structures is automatically provided at 10% of the amount of insurance you have on the structure of your home.  You can purchase additional coverage if necessary.

Do you know if your policy would provide enough coverage to rebuild your home?

·   Coverage for your personal belongings – Furniture, clothes, and other personal items are covered if stolen or destroyed by fire, wind or other insured disaster. Most companies provide personal belongings coverage equal to 50 to 70 percent of the amount of insurance you have on the structure of your home.  

High-ticket items like jewelry are covered, but only at minimal dollar limits if stolen. To insure each of these items for their full value, you would need to add a special personal property endorsement to your basic policy.

Trees, plants and shrubs are also covered under standard homeowner’s insurance for theft, fire, lightning, explosion, vandalism, and riot. They are not covered for damage by wind or disease. Limits are usually $500 per item.

·   Liability protection – This protects you against lawsuits for bodily injury or property damage that you or your family members cause to others. Liability coverage also pays for damage caused by your pets. Your insurer pays the cost of defending you in court and any court awards, up to the policy limit. You are also covered not just in your home, but anywhere in the world.

Liability limits start at about $100,000, but you should purchase more coverage. You can also purchase an umbrella or excess liability policy, which provides broader coverage, including claims against you for libel and slander.

Your policy also provides no-fault medical coverage if a friend or neighbor is injured in your home. Your insurer pays the individual’s medical expenses without a liability claim being filed against you. You can generally obtain $1,000 to $5,000 worth of this coverage.

·   Additional living expenses – This pays for any additional costs in the event you are temporarily unable to live in your home because of a fire or other insured disaster.  Many policies provide coverage for about 20% of the insurance carried on the structure of your home.

In addition to reviewing your homeowner’s coverage, you should keep updated records of your property in a safe location that is easily accessible. The Insurance Information Institute offers free software you can download to create a home inventory. Log on to www.knowyourstuff.org.

Finally, try to review your homeowner’s policy with your insurance agent annually. Your agent can help you determine if your coverage is still adequate for your needs.

Minimize Retaliation Claims by Your Employees

Far too many employers these days are facing retaliation complaints from their employees under a variety of federal and state laws. Whether it be the Title VII of the Civil Rights Act, the Family and Medical Leave Act, provisions under some workers’ compensation state legislation, or the Americans with Disabilities Act, lawsuits against employers are definitely on the rise. Clearly, preventative action is called for here.

Let’s examine a number of positive strategies that your company or organization can take to reduce these time consuming and expensive lawsuits.

Sensible Steps to Dissuade Retaliation Complaints

Taking certain basic steps can eliminate many of the causes for retaliation complaints. Consider the following:

  • Develop a comprehensive anti-discriminatory and anti-retaliation policy. This may best be accomplished with the assistance and advice of an employment lawyer. The most proactive approach is to take a zero tolerance stance against any legally defined discrimination. Included in this policy should be a very clearly designed anti-retaliation section. To make this policy work, you also have to create a very specific procedure in how management will deal with both discrimination and complaints of retaliation.
  • Train your supervisors and managers. Supervisors and managers need to be fully trained in how to respond to retaliation complaints and know the process they need to follow. From the attitude they present to a complainant, and in how the complaint is investigated and managed, good training is key. Keeping both neutral and responsive to the complainant is the best way to contain a potentially explosive problem at the outset so it doesn’t blossom into a litigious mess later on.
  • Communicate your anti-retaliation policies to all your employees. The employee grapevine is a powerful and often under-utilized tool. A savvy employer knows how to keep their employees happy simply by keeping them included in the loop. If your workers believe you are a proactive versus a reactive employer, you stand a better chance in successfully resolving the employee’s retaliation complaint before it spirals outward into the legal system.
  • Act immediately. When a retaliation compliant is made to management, the initial person receiving the complaint should automatically advise the complainant of the company’s policy and what steps will be implemented.
  • Document the retaliation complaint and any action taken. Trained and designated management or human resource personnel should be utilized to obtain well documented facts and statements. These should be obtained from the complainant, the individual or department which is the recipient of the complaint, and any parties witness to the complaint. Pertinent information from work logs or diaries, and personnel files should be included. Describe what steps were initiated to address the complaint, what was discussed and any actions taken.
  • Be courteous and respectful to all parties. A defensive, indifferent or hostile approach will clearly undermine the best of any anti-retaliation procedure. All parties need to be treated with respect and courtesy at all times. Alienating or antagonizing either the complainant or the accused will surely be counterproductive in resolving a complaint internally.

Retaliation complaints against employers have doubled in recent years. The law is clear. Knowing how to approach and act towards retaliation complaints can go a long way in keeping you from going to court. Even if it comes down to a legal battle, your documentation and actions can greatly reduce or positively affect what decision might be rendered.

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.