Plan Your SafetyOne™ App to Best Suit Your Organization’s Needs

Author, Megan Lockhart, Media Communications and Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

Rancho Mesa aims to provide clients with tools that are flexible in order to best fit their individual needs, including our proprietary SafetyOne™ application. SafetyOne’s features are systemized based on “Projects.” However, projects are highly adaptable to the way each individual organization works.

Below are best practices for utilizing projects depending on your organization’s industry and structure.

Construction (Project or Job)
As the name suggests, construction companies will most likely assign their policies, mobile forms and users to their individual construction projects or job sites. Project managers and foremen can access job-specific content based on the projects they are assigned.

This system works well for both short-term and long-term projects that need to manage safety within unique worksites.

Landscape, Tree Care and Janitorial (Service Crew)
Many landscape, tree care and janitorial companies organize their employees in the SafetyOne application into crews. These crews are employees who stay grouped together from one worksite to the next. Companies can name their projects based on a crew number, truck, or team name and assign content, such as toolbox talks to individual crews.

This system works well for companies providing on-going services to multiple accounts that aren’t necessarily tied to one worksite. 

Human Services (Client or Program)
Human services organizations like non-profits, home healthcare, and schools can use projects for their different office locations, facilities, programs, or campuses. These organizations may choose to make policies and forms available to employees based on their office, clients, facility, program or campus.

There may be different ways to utilize the projects organization structure in the SafetyOne application. Through the dynamicity of the platform, Rancho Mesa is happy to help clients best meet their organization’s risk management needs.

For more information about how to set up projects in SafetyOne™, please contact your client services coordinator or watch our Administrator Website Overview Training.

Directors & Officers Liability Series: Side A Defense Costs & Settlements

Author, Jack Marrs, Associate Account Executive, Rancho Mesa Insurance Services, Inc.

While an insurance agent must continually stay abreast of industry trends and market conditions, it’s equally as important to educate clients on the enforce insurance policies. As a non-profit focused insurance agency, Rancho Mesa is accustomed to having important conversations with clients regarding Directors & Officers Liability Insurance (D&O).

This article is the first installment in a 3-part series explaining the most common insurance agreements in a D&O policy: Side A, Side B, and Side C.

Side A addresses defense costs and settlements.

Why Organizations Have D&O Policies

Most non-profit board members understand they may be held personally liable for financial damages they cause while serving the organization.

This scenario might occur if a director or officer unintentionally misappropriates funds, isn’t transparent about a conflict of interest, or unknowingly violates workplace laws. As such, personal assets can be exposed without a D&O policy in place.

Fortunately, the D&O policy’s Side A insuring agreement addresses this concern and protects the personal assets of the organization’s directors.

Having a D&O policy allows organizations to attract qualified board members who do not want to risk their personal assets in order to serve on the organization’s board.

D&O Policy Coverage

Side A covers the cost of claims not indemnified by the organization.

A claim made against an officer during a bankruptcy is one such example. Without this coverage, the officer will be liable for defense costs.

Fortunately, Side A insuring agreements typically do not have a self-insured retention, which acts similar to a deductible.

Our next installment in this Directors & Officers liability series will address the Side B insuring agreement.

To learn more about D&O insurance or to address your organization’s risk, contact me at (619)486-6569 or jmarrs@ranchomesa.com.

Inflation Increases Cost of Workers’ Compensation Claims

Author, Sam Brown, Account Executive, Rancho Mesa Insurance Services, Inc.

As non-profits and leaders of human service organizations navigate important business decisions in the face of inflation, it’s important to consider measures that can reduce inflation’s impact to an organization’s operating budget. Today, we look at inflation’s effect on workers’ compensation insurance and strategies to reduce future costs.

In August 2022, the U.S. Bureau of Labor Statistics published data reflecting an 8.3% increase to the Consumer Price Index  for All Urban Consumers over the previous 12 months. If medical costs are the largest expenditure in workers’ compensation claims, how is the recent inflationary trends affecting worker’s compensation medical and claim costs?

Medical costs per workers’ compensation claim increased almost 18% between 2012 and 2021 according to a study by the National Council on Compensation Insurance (NCCI). Moving forward, the Office of the Actuary at the Centers for Medicare and Medicaid Services projects an index closely related to medical costs in worker’s compensation will increase 2.5% to 3% beyond 2022. Inflation has impacted many segments of the economy, including workers’ compensation insurance.

Strategies to reduce inflation’s impact to workers’ compensation insurance premiums, include:

• Offer modified duty to all injured workers.

Offering modified duty to employees with work restrictions is widely known to reduce the likelihood of workers’ compensation litigation and reduces the overall cost and duration of the claim. In addition, if an injured employee rejects the offer, then the individual can no longer receive temporary disability benefits. These positive outcomes may help explain why at least one insurance company offers a 10% rate discount to employers that offer modified duty to all injured workers.

• Consider on-call medical technician and telephonic nurse triage services.

Rancho Mesa has published articles about the benefits of on-site medical evaluations and nurse-triage services, but they deserve a fresh look. Both services can advise the injured workers on proper self-care, thereby providing the employee with helpful treatment options while avoiding a costly workers’ compensation claim. The employer will also avoid paying the injured worker’s wages while they travel to and wait inside a medical provider’s office.

The nurse-triage service will continue to manage the injury and help the employee determine if further medical care is necessary. Of course, employers should always report the incident to the workers’ compensation carrier.

• Consider an alternative workers’ compensation plan to gain more control over claim and insurance premiums.

It’s true that self-insured worker’s compensation plans are typically reserved for very large organizations, but options exist that replicate some of the most beneficial features. The available options depend on the size of the employer.

Small to medium sized employers can explore self-insured groups (SIG) to potentially split payroll between class codes and receive dividends. SIGs are very motivated to help members avoid workers’ compensation claims, but also closely manage open claims. A member vote is typically required after a review of an applicant’s safety plan, safety record, and operations.

Medium to large organizations may consider loss-sensitive plans. The policy will typically offer reduced annual premium if the employer can control claim frequency and claim costs. There may also be an opportunity to share in the underwriting profit following a plan year. Of course, the insured may also need to share in the claim costs in a poor performing year.

Another alternative, workers’ compensation deductible plans, can also offer a premium savings if the employer is willing to pay a deductible on each claim. Deductibles can range from $10,000 to $100,000 or more, depending on the employer’s risk tolerance.

Looking at alternative workers’ compensation strategies and plans can help employers navigate the current pattern of inflation. The information above can reduce claim frequency, claim cost, and also inform nonprofit and human service leaders about potential insurance premium savings available.

To discuss your organization’s options, contact me at (619) 937-0175 or sbrown@ranchomesa.com.

NIAC Reimbursing for Damage to Employees Personal Vehicles

Author, Jack Marrs, Associate Account Executive, Rancho Mesa Insurance Services, Inc.

Many employees of non-profit organizations use their personal vehicles while performing work-related duties. Following an auto accident, the employee’s personal auto insurance will respond to a third party liability claim. Only once those policy limits are exhausted will the organization’s non-owned auto liability coverage respond.

But who is responsible for physical damage to the employee’s vehicle?

Below, we discuss the impact of California Labor Code 2802 and one insurer’s response.

If an employee’s vehicle is damaged while performing work-related duties, the responsibility of the repair cost falls to the other driver or the employee’s auto insurance. An issue arises, however, when a personal auto lines carrier adopts exclusions that eliminate coverage for an employee involved in a business-related activity.

Complicating matters, California Labor Code 2802 states that “an employer must indemnify an employee for all necessary expenditures or losses that the employee incurs in direct consequence of performing work-related duties.” Non-profit leaders must understand the organization’s obligation to reimburse the employee for the cost to repair a personal vehicle.  

This unexpected expense can be challenging, especially for smaller organizations with employees driving personal vehicles to help fulfill the mission.

Fortunately, Nonprofit Insurance Alliance of California (NIAC), an insurance risk sharing pool for 501(c)3 organizations, has developed a useful coverage to address this issue. If coverage is elected, NIAC will reimburse the employer’s expense for physical damages to a California-based employee’s personal vehicle. Coverage offers $5,000 per claim with a $25,000 policy aggregate limit, thereby easing the financial burden created by Labor Code 2802.

Understanding these types of coverages and their exclusions are key for non-profit organizations. If you’re unsure how your policy would respond to this scenario,  contact me at (619) 486-6569 jmarrs@ranchomesa.com for a policy audit to see if your organization is covered.

Retaining Non-Profit Employees in Vital Service Roles

Author, Jack Marrs, Associate Account Executive, Rancho Mesa Insurance Services, Inc.

Employees and volunteers are the heart of non-profits. Without them, non-profits would never have a chance to fulfill their missions. They are the organizations who communities rely on for support.

Dating back to Spring of 2020, employee retention in the non-profit has become a crisis. Individuals and communities relying on non-profits are suffering because of low employee retention. Non-profits provide a large variety of different services anywhere from food banks to domestic violence shelters. They also provide hope, which gives those in need a fighting chance. According to the National Council of Nonprofits, “staffing shortages in direct-care services mean that families and individuals cannot access life-saving support. When a non-profit closes its doors, the ripple effects cannot be ignored: communities lose access to food, shelter, mental health care, and other vital services.”

Non-profits are not able to provide proper care for the same number of clients that they once could, which is creating a longer waitlist to get access to care.

According to the National Council of Non-Profits survey, “26% of responding organizations reported having a waiting list that is more than a month long, with some organizations highlighting that clients have to wait years to receive services. While 21% of respondents acknowledged that they do not have a wait list, they clarified that it is because they are no longer accepting new clients or referrals and have turned people away at some point.”

Non-profit leaders who are experiencing high employee turnover must take action and consider implementing new tactics that can help retain key employees. To start, employees like to feel valued and appreciate being checked in on and complimented for their hard work. It is important that organizational leaders are engaging with these employees, asking them for their opinion, giving them options, and making them feel heard and supported. This can lead to building an organization that others will want to join because you have created a healthy work environment with employees who regularly share these positive examples with their friends and loved ones.

Also, employees want to be able to grow within non-profit organizations. According to Chelsea Guffy, a graduate of the Master of Nonprofit Leadership and Management program at Arizona State University, who is the Marketing and Events Manager at Homeward Bound in Phoenix, “employees who value their work want the opportunity to grow and gain more experience in their career. Start the professional development in the onboarding process. Find out the training and skills incoming staff wish to learn, and take an interest in their personal career goals.”

With respect to income, Guffy goes on to suggest “When looking at the budget, offering other types of compensation, such as bonuses for exceptional performance; perhaps an implemented paid vacation time could provide incentive for greater work performance and raise appreciation toward the organization.”

Something as small as paid time off can go a long way. It will provide your employee with more of a balanced work-life as well as decrease likelihood of burnout.

Another great way for non-profit employers to retain their employees is to hold exit interviews. Ask the employee a series of questions of what you could improve in order to provide a better experience for the next candidate. Continue to keep track of these statements and you’ll begin to see a pattern. From there, it's up to the non-profit leader to put in the action to resolve those complaints.

Additional tips for retaining employees can be found is Rancho Mesa’s RM365 HRAdvantage™ portal, along with our downloadable “Guide to Improving Retention” and online courses designed for human resources professionals that address engaging your workforce, developing successful teams and a healthy work/life balance. 

To discuss your risk management strategies or our HR portal, contact me at (619) 486-6569 or jmarrs@ranchomesa.com.    

Four Factors Contributing to Employee Theft

Author, Sam Brown, Vice President of Human Services, Rancho Mesa Insurance Services, Inc.

Crime insurance policies act as one line of defense against financial loss to an employer. At times, guarding against theft can feel like an uphill battle with many factors outside of our control. One common form of crime insurance claims may be more preventable than ever with some quick education. We are talking about employee theft.

Employee theft can come in the form of stolen petty cash, liberal use of gas cards, or payroll fraud. A review and understanding of the most common reasons why employees steal from their employer can help prevent such crimes.

1. Financial Need

Real or perceived, a financial crisis can drive an employee to steal. Examples include family illness, falling behind on bills, personal debts, or even the desire to have clothing or material possessions the employee cannot afford on their own.

2. Perceived Unfair Treatment

Employees justify stealing when they believe the employer has overworked and underpaid its employees. An employee may also blame management when job performance does not warrant a pay increase. Employees may feel the company owes them.

3. Opportunity

One theory suggests that even honest people will steal if there is ample opportunity. It would make sense then that the incidence of theft increases for employees near unsecured cash or valuable property. This is especially true for employees who understand the worth of company property.

4. Workplace Norms

Employees who see co-workers get away with stealing from the company are more likely to commit theft themselves. Conversely, a quick reminder to a new employee that theft of an any kind is not condoned can adequately communicate what is and what is not to be tolerated.

Understanding factors that drive an employee to steal from an employer can help organizational leaders identify suspicious behavior. This may also lead to management decisions made to influence company culture in a positive way.

Please contact Rancho Mesa Insurance if your private company or non-profit organization has questions about crime insurance and employee theft.

Preventing Stress Claims

Author, Jack Marrs, Associate Account Executive, Human Services Group, Rancho Mesa Insurance Services, Inc.

Specializing in non-profit insurance has opened my eyes to how difficult it is for some non-profit employees to deal with the stress related to their jobs. It’s the nature of the work. Helping people through difficult situations can be rewarding for an employee, but it can also be emotionally draining when they become invested in their clients to the point where it can lead to burnout.

Employees can suffer from emotional and mental illness as a result of their working environments, which can lead them to file workers’ compensation claims. Depending on the nature of the non-profit’s mission, employees may witness a variety of disturbing realities that the general public isn’t used to experiencing.

Since psychiatric injuries are based on an employees' personal experience, it’s much more difficult for physicians to verify these types of claims. Plus, these conditions can also develop from multiple stressors in an employee’s professional and personal life like when they are dealing with a death, going through a divorce, or filing for bankruptcy. So, it’s hard to determine what percentage of the claim is work-related and what percentage is caused by outside factors.

Workplace stress can trigger mental and physical illnesses and injuries, so identifying and correcting stressful situations early, can prevent costly health care costs and workers’ compensation claims.

Managers should periodically check in with their employees to see how they are doing with regards to their workload, relationships with clients, co-workers and vendors, etc., but also their personal lives. If there is an issue in the workplace, it can be addressed quickly before it causes extreme stress to the employee. If something is happening at home, it could be affecting their productivity and performance on the job. And, the employer may be able to refer their employee to resources to assist them as they deal with whatever stressors are in their personal lives. This also helps to establish if the stress felt by the employee is work-related or personal.

Employers can reduce workplace stress by ensuring effective communication from supervisors to employees. Whether the communication is about job duties and expectations, career growth within the organization, or a traumatic event and relevant resources to help employees cope, being transparent with employees can relieve some stress caused by not knowing what’s to come.

Stress claims take a tremendous toll on both employees working for non-profits and the organizations themselves. Rancho Mesa provides an extensive library of training offered through our Risk Management Center and the RM365 HRAdvantage™ Portal. These trainings can be easily accessed and allow for our non-profit clients to be proactive in mitigating the severe impact of stress claims. 

Contact me at jmarrs@ranchomesa.com or (619) 486-6569 to learn more about these options.

Nonprofits Insurance Alliance® Discusses Their Mission

On February 8th, 2022 Sam Brown, Vice President of Human Services Group, welcomed Nonprofits Insurance Alliance® (NIA) founder, president, and CEO Pamela E. Davis to Rancho Mesa’s StudioOne® podcast.

Pamela shared how she turned a graduate school project and a vision for insuring nonprofits into $250 million in written premium.  

Sam and Pamela discuss how a nonprofit specialist broker serves clients, and how NIA provides cost-saving tools tailored for nonprofit leaders and brokers.

Listen to the full interview below.

OSHA Posting and Submitting Guide

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

Rancho Mesa Insurance Services, Inc. would like to remind its clients that February 1, 2022 marks the start of the OSHA Form 300A Summary posting period. The OSHA Form 300A is a summary of the company's annual work-related injuries and illnesses. It must be posted from February 1, 2022 to April 30, 2022.

To learn more about maintaining all the OSHA logs, listen to Rancho Mesa's StudioOne™ podcast episode 168 where Alyssa Burley and Megan Lockhart discuss the Forms 300, 300A and 301.

REQUIRED TO POST

According to Cal/OSHA, “If your company had more than ten (10) employees at any time during the last calendar year, you must keep Cal/OSHA injury and illness records unless your establishment is classified as a partially exempt industry under Section 14300.2.”

POST FORM 300A SUMMARY

The Form 300A Summary must be posted in a conspicuous place at each workplace, where notices to employees are usually displayed. Make sure that the posted annual summary is not altered, defaced, or covered by other material. Employers must send a copy of the summary to employees who do not report to the workplace on a regular weekly basis.

NO RECORDABLE INJURIES

Companies with no recordable injuries or illnesses in 2021 must post the OSHA Form 300A Summary with zeros on the “total” lines.

HOW TO GENERATE THE FORM 300A SUMMARY

Through Rancho Mesa's Risk Management Center, clients can generate the OSHA Form 300A Summary using the incident tracking feature. Individual employers are required to maintain the OSHA Forms 300, 300A and 301 throughout the year. So, when it is time to generate the Form 300A Summary, it can be printed from the Risk Management Center, as long as the employer has been documenting the information in the platform throughout the year.

To print the OSHA Form 300A Summary, login to the Risk Management Center and navigate to Incident Track. Ensure you have entered all your incident information, then go to the Reports section and choose the Form 300A Summary from the available list. You'll be able to choose the year and locations (Sites) that you want to print.

SUBMITTING THE FORM 300A SUMMARY TO FEDERAL OSHA

In addition to posting the Form 300A Summary in your workplace, the data must also be submitted to Federal OSHA by March 2, 2022. If you have entered your incident data into the Risk Management Center, you'll be able to generate the electronic .CSV file that is used to upload the data to the Federal OSHA website. Watch out short video on how to generate the electronic Form 300A Summary.

Data Entry and Generating the Electronic Form 300A Summary

There are some minor differences between Cal/OSHA and Federal OSHA requirements. Check with your state’s OSHA division for specific differences for your state.

Visit the California Recordkeeping Standard or Injury & Illness Recordkeeping Forms webpages for more information.

Risk Bow Tie Exercise

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

Rancho Mesa’s non-profit clients successfully serve their communities in changing economic and political climates. In part, their success is due to managing risk for an organization’s employees, clients, finances, and mission. Just as important, but less discussed than risk management, is risk analysis. This article offers one helpful tool non-profit leaders can use to facilitate risk analysis, the Risk Bow Tie Exercise.

Introduced to Rancho Mesa by the Nonprofit Risk Management Center’s book World-Class Risk Management for Nonprofits, the Risk Bow Tie technique helps nonprofit leaders consider an event’s positive and negative consequences in a group setting. Following the exercise, participants may feel empowered to utilize the technique in multiple departments to analyze both expected and unexpected events. 

The five steps of the bow tie exercise include:

1. Identify a potential event.

2. Identify some of the underlying conditions that make the event more or less likely, more or less impactful, and more or less urgent.

3. Identify some of the consequences or ripple effects,  both positive and negative, should the risk materialize.

4. Identify preventative risk management steps or controls that could make the event less likely or less detrimental.

5. Identify risk management steps or controls that could be planned now, but implemented after the event has occurred, to reduce the potential negative consequences.

The image below, from page 152 of World-Class Risk Management for Nonprofits, is a sample Bow Tie Worksheet.

Risk Bow Ties Worksheet image provided by World-Class Risk Management for Nonprofits.

Performing the exercise in a workshop or group setting will usually provide one or more of the following insights:

• The group uncovers details of an event that had not previously been discussed or observed.

• Both positive and negative consequences can result from one event.

• The exercise brings to light unique perspectives and experiences from multiple participants.

• Identifying important underlying conditions and consequences better informs the creation of relevant controls.

• Team members can perform a risk analysis in a fun, accessible and informal way.

Nonprofit leaders can use a diverse set of tools to analyze and manage risk. Rancho Mesa encourages clients to ask about various tools we have available to prepare for both the expected and unexpected.

To learn more about the Risk Bow Tie technique contact me  at sbrown@ranchomesa.com or (619) 937-0175.

Cyber Attacks Threaten One-in-Six Firms’ Survival

Author, Sam Brown, Vice President of the Human Services Group, Rancho Mesa Insurance Services, Inc.

The dramatic increase in cyber-attacks since 2020 has resulted in employer pain and made headlines as the economic cost skyrockets. The recent Hiscox Cyber Readiness Report 2021 states that the number of firms attacked rose from 38% to 43%. Not surprisingly, more than 28% of those employers suffered multiple cyber-attacks.

Determining the cost of a breach can be difficult, but the report states that one-in-six firms’ survival was threatened. Over 58% of firms hit with a ransom paid the threat-actors to regain access to the computer system and vital information. In 2020, the standalone cyber loss ratio increased to 73%, its highest level since separate cyber data were included in financial reporting, six years ago.

The increase in cyber-attacks and claim payouts is causing alarm in both insurance companies and businesses. According to the Insurance Journal, insurance companies are quoting significant premium rate increases and tighter coverage terms to improve underwriting performance and profitability. The average cyber renewal premium rate increased 11%. Meanwhile, written premiums for standalone cyber coverage increased 29% in 2020, a sign of growing demand.

The shift to a remote workforce and an increase in phishing email has tested network security systems. Fortunately, many insurance carriers now offer a cyber readiness assessment to help policyholders address vulnerabilities and avoid cyber-attacks.

As cyber-attacks continue, it is important for all employers to learn more about the specific exposures that cyber insurance coverage can cover along with ways to improve cyber security.

We will be offering a Cyber Liability workshop in the coming weeks, so be sure to look for that information on our workshops and webinars webpage.

Please contact me at (619) 937-0175 or sbrown@ranchomesa.com to discuss our process of developing competitive quote options.

Experience Mod KPI Provides Trend Analysis, Opportunity Assessment, and Vital Management Tools

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

In January 2021, we launched the Safety Key Performance Indicator (KPI) Dashboard to provide a tool for our customers to use as a bridge between their experience mod and safety performance.

Our primary goals were to:

• Eliminate surprises

• Simplify concepts

• Track performance

• Highlight the positive and negative trends

• Benchmark safety performance against industry competitors

An experience mod above 100 can limit a landscape company’s ability to be awarded jobs or maintain contracts, increase insurance premiums, and have other significant financial implications.

Our dashboard is a tool companies can use to strategically manage the underlying components that directly impact the experience mod and help project future experience mod deviations.  Rancho Mesa can help interpret the results and provide insights to help improve your performance.

Not a Rancho Mesa client but interested in seeing what your dashboard looks like? Complete our new KPI Dashboard quick form, to see how your company measures up.

How to Choose a Workers’ Compensation Carrier Partner

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

Many years ago, when I was a young producer, one workers’ compensation carrier legend pulled me aside and told me never to forget that a workers’ compensation decision is not a one-year decision, but at least a 4-year decision. Of course, policies are only written on a one-year basis but what he was teaching me was that the carrier you choose will handle all the claims you have through your Experience Modification cycle. So, evaluating and recommending a workers’ compensation partner for my clients just became a much more thorough analysis of many critical factors beyond just the premium.

I understand and want to acknowledge that competitive pricing is very important, yet other than price, most business owners are not sure what to look for when comparing carriers. All businesses should consider the following in their evaluation of a workers’ compensation carrier:

• What is the A.M. Best rating of the carrier?

• How long have they been in the State workers’ compensation marketplace?

• What is their premium volume within the State?

• What “in-house” services does the carrier provide? Two services for special consideration are:

  • The Claims Department

  • Loss Control Service

• How does their medical cost containment numbers compare to the industry averages?

• How does their claim closing rates compare to the industry average?

• Are the following services available?

  • Telemedicine

  • Nurse Triage

For any businesses that pay above $250,000 in annual premium, should consider these additional questions:

• Does the carrier offer a dedicated indemnity claims examiner for your business?

• Does the carrier offer Claim Review Meetings?

• Does the carrier offer a Client Services coordinator?

• Does the carrier offer on-line claim status information?

• What loss sensitive programs do they offer?

Further, for any businesses that are exploring loss sensitive programs (usually above $400,000 in annual premium) like deductible workers’ compensation, they should evaluate the following:

• What are the terms of the letter of credit required?

• Is there a Loss Conversion Factor (LCF)?

• Is a Loss Fund required?

• How are Allocated Loss Adjustment Expenses (ALAE) handled?

• Is there a policy deductible aggregate?

• Are there any claims handling charges?

• Are there Medical Cost Containment charges?

Since many of the concepts and terms above require a deeper understanding and explanation, listen to my podcast episodes where I examine this topic in greater detail.

Also, consider attending one or both of my live webinars that cover this topic and afford you the opportunity to ask questions. Register for our Thursday April 1, 2021 webinar where I will focus on businesses with annual premiums below $400,000, and/or register for my Thursday April 8, 2021, webinar where I will deal specifically with deductible workers’ compensation. Both webinars will be 30 minutes in length.

If you would prefer to speak with me directly, I can be reached at (619) 937-0170 or email me at dgarcia@ranchomesa.com. 

I wish you all a safe and profitable 2021.

A Hardening Employment Practices Marketplace Likely to Impact Many Businesses

Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

The Employment Practices Liability Insurance (EPLI) marketplace has faced a number of factors that are contributing to skyrocketing premiums and deductibles. Many insurance companies are facing the choice of whether to remain in the marketplace or exit altogether. Those willing to remain are then faced with having to consider the following changes:

• Increase their premiums to offset increased claim activity

• Increase their deductibles

• Consider adding exclusions of previously covered exposures

• Consider only renewing existing clients’ policies

• Pulling out of certain business segments such as retail, hospitality, leisure, and transportation which is currently being impacted the most from COVID-19.

Below are some of the main factors causing the hardening EPLI marketplace. As you will see, they vary significantly but combined they have created a perfect storm.

COVID-19

These are unprecedented times with businesses being forced to shut down for months due to COVID-19, employees having to work remotely and our economy seemingly coming to a standstill. Couple this with a significant increase in layoffs, severance packages, furloughs, and unemployment, and we have seen a significant increase in claims filed. By January 2021, the plaintiff’s bar had filed over 1,200 COVID-19 related employment lawsuits. These types of lawsuits have continued to grow each month since the pandemic began.

We have also seen the unemployment rate spike from 3.5% in March of 2020 to 14.7% in April 2020. Currently the unemployment rate has settled to about 8% but this still represents a double digit increase from2019.

EPLI claims often follow large changes in workforce, including reductions, promotions and demotions. Three areas of particular growing concern include:

• Sexual Harassment

• Privacy

• Retaliation

Sexual Harassment

The heightened awareness and increased public intolerance for harassment developed in part from the #MeToo movement has given a voice to people that are now not only speaking out but filing lawsuits against their employer for sexual harassment. This national attention has also altered the legal environment surrounding these types of claims, often leading to much higher settlements outcomes..  Industry wide, the total monetary benefits awarded to sexual harassment victims has increased 68% from 2016 to 2019 according to the U.S. Equal Employment Opportunity Commission.

Privacy

In addition to discrimination and sexual harassment claims, insurance carriers also anticipate privacy-related claims. As businesses begin to reopen, there are new policies and procedures in place that require a Human Resources department to question employees about their personal health, their health history, and their family’s health history. The nationwide Health Insurance Portability and Accountability Act (HIPAA) and other state-specific laws like the Illinois Biometric Information Privacy Act (BIPA) regulates how companies collect, store, use, and share biometric information. With temperature-taking requirements and a certification form filled out, there is a concern that some employees may feel their privacy has been invaded. 

Retaliation

There is also a growing concern that there will be more retaliation type claims relating to an employee’s use of social media. With COVID-19 in mind, employees are already expressing their concerns via social media about their employers’ lack of safety measures or personal protective equipment (PPE). It’s reasonable to consider that if these employees are terminated that they may feel they were retaliated against because of their posts.

Retaliation could also be a result of employees exercising their rights under Family Medical Leave Act (FMLA) or other benefits such as workers compensation or paid sick leave.

US Supreme Court LGBTQ Decision

The Supreme Court ruled in June 2020 that Title VII of the 1964 Civil Rights Act protects employees from discrimination based on sexual orientation and gender identification. 

Previously only 28 States awarded such protections. Now that these protections are law in all 50 states, we will likely see additional claims alleging employment discrimination based on gender identity and sexual orientation.

In conclusion, running a business remains a challenge under normal circumstances. Add in the many side effects of the pandemic and it can feel overwhelming. EPLI-related claims can result in catastrophic financial impacts to a company’s balance sheet. The cost of defending your business alone can potentially put a company out of business. While EPLI premiums continue to rise, so does your exposure to a myriad of claims that fall under this coverage umbrella. Having EPLI in place can mean the difference between absorbing fair and reasonable claim costs or forcing an uninsured business to close their doors. To learn more about EPLI coverage and ways to construct a policy that meets your needs, please reach out to me at 619-937-0174 or jhoolihan@ranchomesa.com.   

Can Employers Mandate a COVID-19 Vaccination Policy?

Author, Sam Brown, Vice President of the Human Services Group, Rancho Mesa Insurance Services, Inc.

As COVID-19 vaccinations become more available and the positive results of our efforts are realized, employers may ask how this impacts the workforce and a full-scale return to the workplace. More specifically, they may ask if an employer can mandate a COVID-19 vaccination policy.

The laws are complex, so please do not rely on this article as legal advice. Please consult your labor law attorney before deciding how to proceed.

The short answer is yes, employers can mandate a COVID-19 vaccination for employees, when it makes sense. 

The 1905 court case Jacobson v. Massachusetts forms the U.S. Equal Employment Opportunity Commission’s (EEOC) basis for guidance. Following a deadly smallpox outbreak in New England in 1901, the Supreme Court ruled that the government may impose “reasonable regulations” to protect the “safety of the general public.” The EEOC makes clear that employers may implement similar demands.

According to the EEOC, an employer can implement a mandatory vaccination policy if there is a job-related need for it or if non-vaccination threatens the health of other employees, customers or themselves. The EEOC’s guidelines date back to the 2009 outbreak of H1N1, and was updated in March 2020.

A mandatory COVID-19 vaccination policy would commonly be used in a health care environment or in emergency services where the likelihood of exposure may be higher based on the nature of the work, opposed to the average office environment that is following the Centers for Disease Control COVID-19 guidelines along with implementing a COVID-19 Prevention Plan.

Employers should take caution when deciding whether or not to implement such a policy and whether it makes sense for their industry and organization. According to OSHA’s January 2021 Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace, employers should not distinguish between workers who are vaccinated and those who are not. All employee should follow the same safety precautions regardless of vaccination status. 

Essential workers in sectors like construction and landscaping, community-based organizations and financial services to name few, can operate under the provided guidance without requiring their employees to get the COVID-19 vaccine in order to resume normal business operations.

Some employers are waiting to impose a mandatory vaccination policy, choosing instead to offer employees incentives for getting vaccinated. These incentives may include a vacation day, a few hours of regular pay, or a cash bonus. To avoid discrimination, an employer may offer the incentive to all employees if the company’s work force meets a vaccination goal. Whatever path you decide, make sure to include the policy in your employee handbook or COVID-19 Prevention Plan.

Considering a recent Kaiser Family Foundation survey, 27% of Americans are “vaccine hesitant.” So, the employer will need to decide if a COVID-19 vaccination policy is right for their organization.  Questions regarding mandatory vaccinations will continue to present a challenge to employers.

For specific questions about your company’s vaccine policy, consult our RM365 HRAdvantage™ portal’s live HR experts.

The Heart of Rancho Mesa

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

If you are reading this article, listening to our podcasts, and taking advantage of the meaningful risk management content we share weekly, you and your business likely find some degree of value in what is produced. While much of this content originates from our Media Communications Group, they, with other Rancho Mesa family members join together as the backbone of our operation. Our Certicians®, Account Coordinators, Benefit Analysts, Claim Advocates, Associate and Account Managers, and Sales Executives are the beating heart of our company. That core focuses on three main principles that guide our values, shape our decisions, and directly influence our daily interaction with clients and one another. They include Developing Solutions, Protecting Clients, and Building Trust.

Developing Solutions

A solution is defined as the act, method or process of solving a problem. Our clients face daily challenges and problems as they manage their organizations and continually look for competitive advantages. They rely on us to provide complete solutions but those can look far different across our many departments. Here are a few examples:

• One of our Sales Executives might recommend higher limits of coverage or adjusting deductibles to meet new exposures.

• Our Workers’ Compensation Claim Advocate might deliver a quarterly status to a company’s Safety Committee and make recommendations on return-to-work options. 

• It might also include an Account Manager reviewing contractual requirements for a client bidding a new job.

• And lastly, an Account Manager in our Benefits department might help to resolve a sensitive claim issue with a member. 

• These actions are just a few of the many day-to-day priorities that are centered entirely on serving our customers. We remain fearless in our approach to problem solving!

Protecting Clients

Risk comes in all shapes and sizes. Protecting our clients with insurance is one vehicle we may use to transfer some or all of that risk to a third-party. But, that process can only be effective when our team actively listens to clients and prospective clients through regular interaction at policy audits, pre-renewal meetings, claim reviews, stewardship reports, and renewal meetings. 

A key part of that protection are the resources we offer internally that help mitigate risk and reduce overall exposure to claims across all lines of coverage. Those resources include our:

• Risk Management Center Platform,

• RM365 HRAdvantage™ Portal,

• RM365 Advantage Safety Star™ Training Program,

• Weekly Educational Newsletter and Podcasts, 

• Workshops and Webinars.

Our clients can use these tools for risk management trainings, HR issues and concerns, safety certifications, and consistent risk management education and guidance.

These examples represent a very small sample of what is available from our organization. Building a risk management program that centers on controlling losses by implementing the proper protocols and best practice techniques is ultimately our vision for protecting clients.

Building Trust

We cannot develop solutions and properly protect our clients without building customer relationships based on a deep level of mutual trust. And, we view a distinct difference between establishing trust and maintaining it over the course of our partnership. While we are proud that our customer retention ranks in the top percentile across the nation, we recognize that trust is the key component to our success. And so, our work is never done. We continually expect more from ourselves, our team members, and our carrier partners to maintain, and ultimately, exceed customer expectations. It is simply how we were built and what we stand for. We see No Limit to what we can do.

To learn more about Rancho Mesa Insurance, subscribe to our weekly newsletter and podcast.

Cal/OSHA 300A Form Posting Begins February 1st

Originally published January 22, 2019.

Author, Lauren Stumpf, Media Communications Assistant, Rancho Mesa Insurance Services, Inc.

Rancho Mesa Insurance Services, Inc. would like to remind its clients that February 1, 2021 marks the start of the Cal/OSHA Form 300A posting period. The Cal/OSHA Form 300A is a summary of the company's annual work-related injuries and illnesses. It must be posted from February 1, 2021 to April 30, 2021.

The 300A Form must be posted in a conspicuous place at each workplace, where notices to employees are usually displayed. Make sure that the posted annual summary is not altered, defaced, or covered by other material. Employers must send a copy of the summary to employees who do not report to the workplace on a regular weekly basis.

Companies with no recordable injuries or illnesses in 2020 must post the Cal/OSHA Form 300A with zeros on the “total” lines.

According to Cal/OSHA, “If your company had more than ten (10) employees at any time during the last calendar year, you must keep Cal/OSHA injury and illness records unless your establishment is classified as a partially exempt industry under Section 14300.2.”

Through Rancho Mesa's Risk Management Center, clients can generate the Cal/OSHA Form 300A using the incident tracking feature, within the system. The form may also be printed and manually completed.

Click here for the fillable Cal/OSHA 300A Form provided by CA.gov. 

Visit the California Recordkeeping Standard page for more information.

Four Factors that Shape your Risk Profile

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

How do you differentiate your company from your local competitors? Product, customer service, delivery, etc. The same can be said for your risk profile and insurance costs. Why are my insurance rates high when my competitors are low? Here are four factors that influence your risk profile and impact pricing:      

FREQUENCY OF CLAIMS

The frequency is the number of workers’ compensation claims you average.

Calculation – # of claims / basis

Evaluate – How often are you having workers’ compensation claims and how does that compare to other landscape companies in your region or state?  If frequency is high, a line can be drawn to conclude that your high frequency will lead to more lost time or severe injuries.

Action – If you are having a frequency issue, you need to assess:

• Injury Type (back, hand, wrist, knee…)

• Root Cause (lifting, punctures, slips…)

• Implement corrective actions to help mitigate the risks associated with your claims. 
  
  Take it to the next level and evaluate “near misses.”  Treat a “near miss” as if it were a claim and strategize a corrective action to prevent it from happening in the future. 

Use our Risk Management Center to assign a training to the foremen or supervisor and injured employee to help prevent this from occurring in the future.

Indemnity (Lost Time) Claims

Indemnity is the number of  lost time claims your company experiences.

Calculation – # of lost time claims / basis

Evaluate – How often are you having indemnity claims that result in lost time and how does that compare to other landscape companies in your region or State? 

Action – If you are having an Indemnity issue, you need to assess:

• Injury Type (back, hand, wrist, knee…)

• Root Cause (lifting, punctures, slips…)

• Implement corrective actions to help mitigate the risks associated with your claims. 
  
  Establish a “return-to-work” program which allows your injured employees an opportunity to come back to work on limited duty. 
  

  Improve accident investigation, documentation, and claim reporting protocols to equal best practices.

Experience Rating

Your experience rating is a combination of your loss data and total payroll when compared to your industry typically over a three year period.  Your experience rating will either credit or debit your workers’ compensation premium accordingly.

Calculation – Project your Experience Modification (XMOD) 6 months early at your Unit Stat filing.

Evaluate – Determine the impact changes in your Expected Loss Rate (ELR) and Primary Threshold will have on your next XMOD.

Action – Controlling your frequency of claims and number of indemnity claims will lower your Experience Modification. 

Operations

Heavier operations would include hardscape construction, tree trimming, and snow removal in which generally heavier machinery and product is used, thus a higher exposure to injury.  Compare these types of landscape operations to a lighter exposure such as landscape maintenance, mowing, edging and pruning. 

Calculation – Determine the percentages of your operations that fall into the various landscape work areas.

Evaluate – Identify the exposures that are unique to each area of your operations.

Action – Implement safety programs catered to your exposures that will mitigate risk and help protect your employees.  Although your operations might be heavier, you have the ability to implement tactics to reduce or prevent the claims from happening, thereby subjectively and objectively making your risk profile more appealing. 

We have seen 100% landscape construction firms achieve industry low experience XMODs and the markets most aggressive rates.   Don’t wait for the injury to occur; be proactive and stop the claim before it transpires. 

Your risk profile has already been created whether you know it or not.  The opportunity for you to own it and improve it is always available.

With one click of the mouse, you can see how you stack up against your competitors through our Key Performance Indicator (KPI) dashboard, today.

Contact me to get a customized KPI dashboard at (619) 937-0200 or drewgarcia@ranchomesa.com.

Total Cost of Risk

 Author, Rory Anderson, Account Executive, Rancho Mesa Insurance Services, Inc.

The total cost of risk is the sum of the measurable expenses that are associated with managing risk within any organization. Every successful business has a process for tracking and measuring performance to improve results. It is important for business owners to keep a pulse on key performance indicators. But, how are you measuring risk related costs? Some people may think that insurance premiums are the only cost associated with risk, but we need to look at the bigger picture.

In fact, insurance premiums only make up one fifth of an organizations total cost of risk. If you are only considering insurance premiums as a way of quantifying your company’s risk related costs, you are missing costs that you have control over. All risk-related costs can be observed and monitored. Also, there are certain strategies that, once implemented, will reduce those costs if executed correctly. That’s what total cost of risk is all about. There are five components that make up an organization’s total cost of risk: insurance premiums, retained losses, internal risk management costs, outside vendor fees, and indirect claim costs.

Insurance Premiums

An insurance premium is the payment that a company agrees to pay in order to have insurance. It is the most obvious component that makes up the total cost of risk and represents an important piece of the puzzle.

Retained Losses

There are two types of retained losses, active and passive. An active loss is simply when you have a deductible. If you have a deductible, you made a decision on the front end to take on (or retain) some of the risk, and pay a specified out of pocket amount for situations involving claims. On the other hand, a passive loss is any loss that is unexpected and not accounted for anywhere else. It could be a loss that is not covered by insurance and therefore must be covered out of pocket by the organization. Retained losses, active or passive, must be included when factoring total cost of risk.

Internal Risk Management Costs

Consider internal risk management costs as well. Maybe you have a full-time safety director. What is their salary? What about the person who is responsible for keeping track of the workers’ compensation claims, or the HR person who is in charge of managing and updating the employee handbook every time a new state law is passed? Calculate the internal hours that are spent looking at safety and risk management, and assign a dollar amount. These are costs that typically can be overlooked.

Outside Vendor Fees

You cannot forget to allocate any potential outsourced costs into the total cost of risk. Maybe you hired an outside firm to complete anti-harassment or First Aid/CPR training for your employees. Did you bring in outside safety consultants? These costs add up and need to be considered, as well.

Indirect Claim Costs

The last factor that makes up the total cost of risk are indirect costs associated with claims. These are secondary costs that are linked to claims. For example, with workers’ compensation insurance, the direct costs such as medical costs, indemnity payments, and legal services are just the tip of the iceberg. Some examples of indirect costs that are not covered by insurance are OSHA fines, accident investigation, implementation of corrective measures, hiring replacement workers, loss of productivity, etc.

Total cost of risk is critical for organizations to understand for several reasons. First, it helps you make educated and informed risk management decisions. You may want to invest into new equipment or bring in additional safety training from the outside. If you don’t know the total cost of risk and the ultimate impact in terms of upfront expense and projected return, how can you make the best decision?

Understanding your organization’s total cost of risk also helps you benchmark your progress towards your financial goals and objectives. It’s a quantifiable, controllable number that can be identified and reduced. It’s a metric that must be used to evaluate the overall success of your risk management process. When an organization is looking at their total cost of risk, they are focusing on the entire risk management function, which ultimately can lead to stronger safety programs and a reduction in frequency and severity of claims.

For questions about how your company can account for its total cost of risk, contact me at (619) 486-6437 or randerson@ranchomesa.com.

2021 Insurance Game Plan

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

As we come to the end of 2020, the most challenging year most of us have ever experienced, where COVID-19, wild fires and other natural disasters took their toll emotionally, physically, mentally and financially on all of us, we can only hope for a brighter 2021.

The insurance industry did not escape the impact of COVID-19 and the natural disasters, either. Insurance companies, along with their reinsurance companies, suffered catastrophic losses as a result. As with many industries, there will be lagging actions that will take place in 2021 to help these companies in their efforts to recover.

While there really isn’t a line of insurance that wasn’t impacted, the lines of insurance that suffered the greatest losses and impacts include:

• Property

• General Liability

• Excess/Umbrella

• Workers’ Compensation

• EPLI

• Cyber Liability

• Surety

• Employee Benefits

For this article, I will limit my discussion to the property and casualty lines and leave surety and employee benefits to another day.

To offset these losses, I anticipate any number of steps insurance companies will take as we move into 2021. But, let me just touch on those that I think will have the greatest impact and need for attention to business owners in 2021. 

Let’s review these and I will try and give you a small sampling of the implications for each action.

• Non-renewing policies

  • Carriers in many cases will not offer renewal terms.

• Reducing coverage limits and terms

  • Increasing deductibles, lowering aggregate limits particularly in the excess/umbrella marketplace.

• Add new exclusions

  • Businesses will start to see “communicable disease” exclusions added to various lines of insurance.

• Increase underwriting information needed

  • A higher emphasis on information particularly as it relates to a business’s policies and procedures to mitigate COVID-19.

• Raise premiums

  • This is the ultimate consequence and one we are all anticipating to see beginning in early 2021.

To many businesses, this will seem daunting and hopeless - one more hurdle to overcome to keep their businesses going. However, there are proactive steps you can take to mitigate these circumstances and have a strong year despite the adversity.

I’m a firm believer in being pro-active and not re-active. Following are steps you can take to meet this challenge head on:

• Meet with your insurance advisor 90-120 days from your renewal date.

• Understand the specific challenges you will be facing.

• Create a strategy on how to approach the insurance marketplace to ensure the most cost effective and comprehensive risk management program.

• Review and enhance your existing safety program. Rancho Mesa offers our RM365 Advantage Safety Star™ certification program. This is a comprehensive web-enabled training course designed to enable your employees from supervisory to front-line workers to be trained and certified in safety best practices. The insurance marketplace already places a high value on these types of safety trainings and certifications, so this will help your company’s productivity through fewer claims but also position you in a more favorable position in the marketplace.

• Benchmark your company’s safety performance to your industry and see which areas you are outperforming your peers and areas that need your attention. Rancho Mesa offers a benchmarking report we call StatTrac™ to our clients or to other companies who want to see where they stack up.

To close, let me reassure you there is light at the end of the tunnel for 2021. Be proactive; start 90-120 day out from your renewal; don’t let insurance issues sneak up on you; attack them head on and I believe you can make 2021 a great year for you and your company.

If you have any questions or want any help in devising a plan and you are a construction company, please reach out to Sam Clayton, our Construction Group Leader at sclayton@ranchomesa.com. If you are in the human services industry, schools, non-profit, healthcare, assisted living, etc., please reach out to Sam Brown, our Human Services Group Leader. And finally, we can be reached at (619) 937-0164 or at our website, www.ranchomesa.com.

I really believe there is no limit to what you can do – best of luck in 2021.