Industry News
Steps to Understanding and Managing Subrogation
Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.
Author, Jim Malone, Workers’ Compensation Claims Advocate, Rancho Mesa Insurance Services, Inc.
Subrogation crosses into many areas of the insurance world including workers compensation, general liability, property, and auto. As an employer, developing an effective Incident Investigation Plan is a key first step to managing the potential impacts of subrogation on your organization.
Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.
Author, Jim Malone, Workers’ Compensation Claims Advocate, Rancho Mesa Insurance Services, Inc.
Definition
Subrogation is defined as the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by a transfer of any associated rights and duties. It occurs in property/casualty insurance when a company pays one of its insured’s for damages, then makes its own claim against others who may have caused the loss or contributed to it. Subrogation crosses into many areas of the insurance world including workers compensation, general liability, property, and auto. As an employer, developing an effective Incident Investigation Plan is a key first step to managing the potential impacts of subrogation on your organization.
Employer Level Investigation
Identifying the potential for subrogation should occur immediately after an injury or accident occurs with an employer-level investigation. This includes visiting and securing the scene of the accident. If there are hazards or dangerous conditions still present, address them by taping off the area or removing the hazardous element. All potential witnesses need to be identified with securing their name, employer, telephone number, address, copy of their driver’s license, etc. These witnesses should be provided a witness statement for their completion.
It is also imperative that the employer preserve the evidence by taking possession of the tool or equipment that caused the injury. If a ladder broke causing a fall and injuries, take possession of the ladder and keep it secure until needed later. If a tool malfunction is the cause of injury, take possession of that tool until it is needed for the next step of the investigation. Removing the injury-causing item prevents the chance of additional injuries or accidents.
Additionally, take photographs or measurements of the entire area, building as much visual evidence as possible. Be aware too that changes can and will occur to the scene of the accident within minutes or hours of the incident. Entire crews are known to be removed from the area to avoid being identified as potential witnesses of an at-fault third party incident.
Referring a Claim and Protecting the 2 year Statute
As you continue with your internal investigation, ensure that the claim’s assigned adjuster sends your third party information to the insurance company’s subrogation department. Most claim professionals do not have experience nor handle the details of subrogation cases. As a subrogation adjuster and attorney build their respective files, they will benefit significantly from the information obtained in a thorough post-injury investigation. They can then focus on obtaining additional discovery that can solidify their subrogation efforts. Reach out promptly to your subrogation adjuster and attorney as they will value your contribution to the investigation. We also recommend requesting regular updates, which would include participating in regular interval claim reviews.
Be aware that the California Statute of Limitations for personal injury cases is 2 years from the date of the injury and/or accident. “Protecting” this statute means ensuring your insurance company formally files a civil lawsuit against the identified third party in a timely fashion.
Pursuing Subrogation
While injured employees are barred from suing their employer for their workers compensation injury due to the Exclusive Remedy Rule, that same employee may still bring a personal injury claim against a third party who shares responsibility for the injury. The employer also has the right to bring a civil claim against a third party to be reimbursed for the workers compensation benefits it is providing. If the employee pursues the third party, the workers compensation carrier can join as a party to this litigation. In this scenario, the workers compensation carrier simply provides a summary of their costs, or their workers compensation lien. The carrier then has first lien rights once a judgment is reached against the at-fault party.
As subrogation cases move toward settlement, there are many factors impacting the net recovery for the injured worker and insurance company (employer). Many incidents have shared negligence alleged by the employer and even by the employee. The civil arena does not have the same thresholds or tolerances for extent of injury, need for medical care, resulting temporary disability, permanent disability and / or future medical care as does the workers compensation system. Many times the workers compensation liens are considered liberal and excessive by the civil arena. Therefore, it is difficult for the workers compensation carriers to be fully reimbursed for the total costs of their claims.
Waiver of Subrogation
In the Construction space, many trade contractors are asked via contract to provide waivers of subrogation in conjunction with other insurance requirements. Waivers do not prevent a subcontractor’s injured worker from filing suit against the general contractor. The waiver bars the subcontractor's workers compensation carrier from pursuing subrogation in the event the employee does not pursue relief from the aggrieved party. If the employee files suit, the subcontractor’s work comp carrier can then join the action. If the employee does not file suit, then the subcontractor’s carrier cannot pursue subrogation on its own against the General. Consider this example: A general contractor responsible for erecting scaffolding on a jobsite subcontracts drywall work to a subcontractor who will use the scaffolding in the scope of their work. An employee of the drywall contractor falls from the scaffolding and it is later determined that the General did not secure the base of scaffolding properly. Typically, the employer’s workers compensation carrier could look to subrogate the costs of the work comp injury claim incurred by the injured worker from the general contractor. However, the drywaller provided a waiver of subrogation to the general as a condition of securing the contract. Therefore, their right to subrogate against a general contractor has been waived. Subrogation between subcontractors; however, remains a viable avenue of subrogation if the involved parties are subcontractors.
Closing
Becoming comfortable with the many facets of subrogation is crucial as your team builds an overall plan to manage risk. This process includes incorporating third party questions into your Incident Investigation Plan, overseeing the claim and recovery process, creating reasonable expectations as settlement draws near and paying closer attention to waiver requirements. While these are only initial steps, they represent a solid base to building a greater awareness and deeper understanding of subrogation.
To learn more, email Daniel Frazee at dfrazee@ranchomesa.com or Jim Malone at jmalone@ranchomesa.com.
Fraudulent Claims Could Be on the Rise
Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.
California is in the middle of a construction boom. There is more work than qualified employees and contractors need people on their job sites. While fraudulent workers’ compensation claims are relatively low right now, California contractors are asking what will happen when there is not enough work to keep everyone busy?
Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.
California is in the middle of a construction boom. There is more work than qualified employees and contractors need people on their job sites. While fraudulent workers’ compensation claims are relatively low right now, California contractors are asking what will happen when there is not enough work to keep everyone busy?
Fraudulent workers’ compensation claims peak when steady work dries up and opportunities diminish. When an employee doesn’t know if they will be employed next week, they can panic and consider making a fraudulent workers’ compensation claim to ensure a compensation check. Regardless of the size of your company, consider how you may be able to create growth opportunities for your employees. Even if an employee is with your company for a short time, it is important to show them there are opportunities for promotions and pay raises. Keeping your employees happy and goal oriented is extremely effective in reducing fraudulent workers’ compensation claims.
According to Chris Dill, Special Investigations Unit Manager for ICW Group Insurance Companies, millennial’s are two to three times more likely to commit workers’ compensation fraud compared to older employees. That is not to say you shouldn’t hire a millennial, just make sure they know there is a path to move up in the company, have job descriptions, and promotions available with new titles. This is essential to keeping their interest and dedication to your company. Make sure to have meetings where every employee can speak freely in an open forum, so their voices are heard. If an employee feels valued and a member of a cohesive team, they are less likely to create false claims, which can lead to a more profitable company.
When bidding for a job, it is next to impossible to account for injuries that may happen and how those injuries will cut into your net profit. If your only goal is revenue, profit is hard to attain and growth is only sustainable if your profit remains consistent. Keeping workers’ compensation claims to a minimum is a contributing factor to achieve consistent profit.
There are many ways to decrease the likelihood of fraudulent workers’ compensation claims. Rancho Mesa Insurance Services offers strategies to help clients stay ahead of this problem, including our upcoming workshop “Fighting Fraud in CA Workers’ Compensation System” on September 19, 2019. Please contact us at (619) 438-6889 or ccraig@ranchomesa.com for more information on how to prevent fraudulent claims, or with any questions you have regarding your policy.
RM365 Safety Star Program May Lower Risk of Receiving OSHA’s Most Frequently Cited Violation
Author, Kevin Howard, CRIS, Account Executive, Rancho Mesa Insurance Services, Inc.
Rancho Mesa Insurance Services’ RM365 Advantage Safety Star Program™ checks several boxes for contractors who are looking to improve their safety culture and lower risk. The program provides safety training designed to reduce an organization’s probability of work-related injuries; thus, minimizing the likelihood of an OSHA citation when used in conjunction with the Risk Management Center tools.
Author, Kevin Howard, CRIS, Account Executive, Rancho Mesa Insurance Services, Inc.
Rancho Mesa Insurance Services’ RM365 Advantage Safety Star Program™ checks several boxes for contractors who are looking to improve their safety culture and lower risk. The program provides safety training designed to reduce an organization’s probability of work-related injuries; thus, minimizing the likelihood of an OSHA citation when used in conjunction with the Risk Management Center tools.
Encouraging a safety culture through proper training makes sense for employers. Fed OSHA’s, maximum fine for a non-serious violation is $12,600. A willful repeat violation, however, can cost an employer anywhere from $70,000 - $126,000.
According to the United States Department of Labor, the top 10 most frequently cited standards are:
Fall protection, construction
Hazard communication standard, general industry
Scaffolding, general requirements, construction
Respiratory protection
Control of hazardous energy (lockout/tagout), general
Ladders, construction
Powered industrial trucks, general industry
Fall Protection–Training Requirements
Machinery and Machine Guarding, general requirements
Eye and Face Protection
Avoiding OSHA’s #1 Violation
With Fall Protection being at the top of OSHA’s citation list, and one of the most frequent causes of workplace fatalities in construction, it is of the upmost importance to focus on it when developing a safety program.
Rancho Mesa’s Risk Management Center offers a number of safety trainings that cover all 10 of the most frequently cited standards listed above. Fall Protection is one of five modules, within the RM365 Advantage Safety Star Program that could potentially help avoid a severe injury and OSHA fines.
When Century Painting’s Eddie Lopez was asked to give his thoughts on becoming RM365 Safety Star certified, his response was sincere.
“Obtaining my RM365 Safety Star Certificate was not only fulfilling and educational as a safety manager, but it also helped me navigate through safety criteria that OSHA is expecting us to follow regardless,” said Eddie Lopez, Safety Manager for Century Painting Corp.
RM365 Advantage Safety Star Program™ is a comprehensive tool for contractors that are hoping to package several advantages into one single task. To learn more about how to enroll, please visit the Safety Star Program™ page or contact Rancho Mesa Insurance Services at (619) 937-0164.
To learn more about the Fall Protection in Construction requirements, visit Cal OSHA’s Safety & Health Fact Sheet. You will notice links dedicated to each industry down the left side of the page. This information can further help companies avoid a potential OSHA fine, and more importantly, protect employees.
Top 5 Free Safety Apps for Landscape Contractors
Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.
Mobile devices have become an invaluable tool for many people, on the job. They provide access to contacts, email and applications (i.e., apps) that can make work a lot simpler and safer for landscapers. We researched the top apps that boost worker safety. In no particular order, here are the top 5 free safety applications for the landscape industry.
Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.
Mobile devices have become an invaluable tool for many people, on the job. They provide access to contacts, email and applications (i.e., apps) that can make work a lot simpler and safer for landscapers. We researched the top apps that boost worker safety. In no particular order, here are the top 5 free safety applications for the landscape industry.
OSHA-NIOSH Heat Safety Tool
This app allows workers and supervisors to monitor the heat index for any jobsite. By utilizing the apps features any user can get a reminder about the proper safety precautions and proactive measures that should be taken under the given conditions. It is available in both English and Spanish (to access Spanish, set phone language to Spanish).
Red Cross First Aid
This app provides access to information on how to properly handle first aid emergencies. It is available in both English and Spanish.
Chemical Safety Data Sheets - ICSC
This concise app offers searchable information on substances, delivered in a simple manner. It is only available in English.
NIOSH Sound Level Meter
This app quickly monitors the level of noise exposure in order to judge and evaluate if further testing is needed. It is available in both English and Spanish.
NIOSH Ladder Safety
This interactive ladder safety application is used to assist the worker in positioning a ladder at an optimal angle. It is available in both English and Spanish.
There are many applications employers can use on devices to help improve their safety program, formalize trainings, and consolidate information.
If you use an application (with or without a fee), we would like to hear about it, so we can share with all of our safety-minded clients. Please send your feedback to Alyssa Burley, aburley@ranchomesa.com.
Employers Prepare As Reports of Sexual Harassment Spike
Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.
Americans are all too familiar with the #MeToo movement that has shed light on sexual harassment in the workplace. Outspoken celebrities and prominent public figures have brought this topic to the forefront in the media. With all the publicity surrounding sexual harassment allegations, people are empowered to speak out and report unwanted behaviors in the workplace. This leaves many employers asking what they can do to prevent harassment and prepare for possible harassment allegations.
Editor’s Note: This article was originally published on June 27, 2019 and has been updated for accuracy on September 12, 2019.
Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.
Americans are all too familiar with the #MeToo movement that has shed light on sexual harassment in the workplace. Outspoken celebrities and prominent public figures have brought this topic to the forefront in the media. With all the publicity surrounding sexual harassment allegations, people are empowered to speak out and report unwanted behaviors in the workplace. This leaves many employers asking what they can do to prevent harassment and prepare for possible harassment allegations.
Charges Alleging Sexual Harassment FY 2010 - FY 2018
The United States Equal Employment Opportunity Commission (EEOC) released its “Charges Alleging Sexual Harassment FY 2010 - FY 2018” report. The data shows from 2010 to 2017 reports of alleged sexual harassment incidents actually declined 15.7%, over the seven-year span. However, based on the data, it is difficult to know if incidents of sexual harassment declined or just the reporting of incidents declined.
However, during 2018 there was an increase of 13.6% in alleged sexual harassment incidents, which accounted for over 7,600 claims at a cost of $56.6 million dollars in damages.
Year | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
---|---|---|---|---|---|---|---|---|---|
Percentage Change Over Previous Year Number of Charges |
NA 7,944 |
-1.4% 7,809 |
-3% 7,571 |
-4.2% 7,256 |
-5.7% 6,862 |
-0.6% 6,822 |
-0.9% 6,758 |
-0.9% 6,696 |
13.6% 7,609 |
Percentage Change Over Previous Year Damages (In Millions) |
NA $41.2 |
9.5% $45.1 |
-4.7% $43 |
3.7% $44.6 |
-21.5% $35 |
31.4% $46 |
-11.5% $40.7 |
13.8% $46.3 |
22.2% $56.6 |
EEOC. Charges Alleging Sexual Harassment FY 2010 - FY 2018. https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment_new.cfm.
California’s Senate Bill 1343 (SB 1343) now requires employers with 5 or more employees to provide 2-hour Anti-Harassment training to supervisors and 1-hour training to employees, every two years. As part of this new requirement, the initial training must be completed for all employees and supervisors by January 1, 2021, according to Senate Bill 778, approved on August 30, 2019, which extends the training due date. The changes made by SB 778 not only extends the due date to January 1, 2021, but also addresses concerns about supervisory employees and clarifies when temporary workers must be trained. Read about the changes here.
It’s our belief that as more people are trained to recognize harassment in its many forms, we expect to see the number of reported alleged harassment incidents increase in the coming years. So, what should California employers do to mitigate this increased risk?
Course of Action
For employers, the best course of action is two-fold. Make sure you are compliant by training your employees and supervisors; second, make sure you have Employment Practices Liability Insurance (EPLI) as part of your risk management portfolio.
Training Supervisors and Employees
Understanding the confusion, time and financial burden SB 1343 puts on all California employers, Rancho Mesa offers its clients SB 1343-compliant free online supervisor and employee Anti-Harassment training. Supervisor and employee trainings can be completed 100% online via a computer, tablet or mobile device.
California employers who are not clients of Rancho Mesa can find this training through 3rd party vendors that work in the Human Resource arena and will need to contract with them directly to meet this requirement.
Employment Practices Liability Insurance (EPLI)
EPLI is “a type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation,” according to the International Risk Management Institute, Inc.
If your organization currently does not have EPLI, or you are unsure about what is covered in your policy, we recommend you contact your insurance broker or call us to get clarification. With the projected increase in these types of claims, not having this vital coverage in place could expose your company to severe negative financial impacts.
Whether the increase in reported alleged sexual harassment incidents is a result of more incidents or simply more people feeling comfortable reporting the harassment, every employer should be prepared to properly train their employees and supervisors, while actively working to prevent and stop all forms of harassment in the workplace.
Contact the Rancho Mesa Insurance Services Client Services Department at (619) 438-6869 or aburley@ranchomesa.com for more information about free anti-harassment training for supervisors and employees, or learn more through our other articles on the topic.
Alyssa Burley is NOT a licensed insurance professional. Informational statements regarding insurance coverage are for general description purposes only. Contact a licensed insurance professional for specific questions.
Fleet Management: Driver Behavior Counts
Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.
When you give the car keys to your teenager for the first time, you wish you were sitting in the back seat controlling how they drive. Unfortunately, you have very limited control and the consequences of poor driving can be disastrous. It’s time to think of your employee drivers in a similar manner; these principles apply to your company’s fleet management program.
Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.
When you give the car keys to your teenager for the first time, you wish you were sitting in the back seat controlling how they drive. Unfortunately, you have very limited control and the consequences of poor driving can be disastrous. It’s time to think of your employee drivers in a similar manner; these principles apply to your company’s fleet management program.
To gain some sense of control, you regularly perform fleet inspections and driver trainings. You also hire and manage according to driving records, which provides a picture of the employee’s past driving history. Though, if you are honest with yourself, you too have driven over the speed limit many, many times before you received your speeding ticket. So, a driving record is not the only way to gauge a driver’s behavior.
If you had an effective and efficient way to impact your driver’s behavior before a ticket or accident occurs, you would feel more confident about managing your fleet.
There are Global Positioning Systems (GPS) that can monitor some of the problem behaviors like speeding; however, the onus is on you (the employer) to analyze the information then act on it. Another problem with this type of system is willful negligence. What happens if you have the data, know of a problem, but don’t act? This could cause a major problem when an accident occurs because you knew of a driver’s poor behavior but did nothing specifically to correct it.
The insurance industry is in a commercial auto claims crisis. The cost of vehicle repairs have increased and whether you employ safe drivers or not the price to insure a vehicle is skyrocketing. Simply, the claims have exceeded the premiums collected and the carriers are trying to recover the loss. So, steering driver behavior is more important than ever for your bottom line.
To the degree you can control auto claims created by your employee drivers, the better your premiums will be. Fewer claims equal lower premiums — simple as that. Claims are caused from poor driving behavior. Improve drivers’ behavior on any given day, and you’ll reduce the number of accidents.
But, how do you do that? Logistically, you can’t physically ride along with every employee to ensure they are driving safely, and offer real-time corrective guidance when they make mistakes.
As mentioned, there are GPS devises that measure driver behavior and performance. The devices will consolidate the information; but, it is up to the employer to analyze and act on the information.
Ask yourself, do I have enough time to consistently review this information and implement the correct plan of action? Do I have the resources available to manage this process?
If you are unsure and would like to learn about automated ways to track, manage and correct behaviors likes seatbelt usage, speeding, harsh braking, acceleration and corning, join us at our upcoming Fall workshop, “Driver Behavior is What Counts” and learn how to effectively and efficiently improve your fleet management practices and reduce premiums using smart technology.
In the meantime, if you have any questions, please contact Sam Clayton at (619)937-0167.
Time To Renew Your Bond Line of Credit
Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.
The majority of Rancho Mesa’s contractor clients have a fiscal year, end of December 31, for their company financial statements. During March, April, and May we collect a variety of financial information from our contractors to update the bonding company. The underwriting items we request include the 12/31 CPA financial statement, along with the work in progress and closed contract schedules. We also request an updated bank letter, account receivable/account payable schedules, and a personal financial statement from the owner.
Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.
The majority of Rancho Mesa’s contractor clients have a fiscal year, end of December 31, for their company financial statements. During March, April, and May we collect a variety of financial information from our contractors to update the bonding company. The underwriting items we request include the 12/31 CPA financial statement, along with the work in progress and closed contract schedules. We also request an updated bank letter, account receivable/account payable schedules, and a personal financial statement from the owner.
Once this information is collected, submitted to, and reviewed by the bond company, they may follow up with questions or require additional information to explain what has been submitted. They will also ask the bonding agent to request single bond and aggregate bond program “parameters” based on the contractor’s estimate of work over the next 12 months. This information forms the basis for the bond agent’s line of authority that the bond company will provide to the bond agent.
The line of authority provides the agent with approval to execute the bid, payment, and performance bonds for their contractor client within the negotiated single and aggregate limits. The bond agent line of authority also includes certain conditions that would fall outside the agent’s authority to approve the bond request; therefore, the agent would need to submit the request to the bond company for approval. Some of the conditions that fall outside automatic approval include:
a.) a bid spread in excess of 10% between the first and second bidder.
b.) a project located outside the contractors’ normal geographic area for work.
c.) the contractor taking over work of a defaulted contractor, etc.
The agent line of authority is an efficient way for the bond agent to service their contractor client accounts without requiring approval from the bond company for every project. Upon receipt of a new bond request, the agent will review the project information to ensure it falls within their authority, and then they will execute the bid or performance bond and deliver the bond to their client. The line will usually expire on April 30th of the following year – which restarts the process to collect the financial information for the bond company to renew the agent’s line for another year.
If you would like a better understanding of how the bond line of authority affects your bond program, please contact Matt Gaynor, at (619) 937-0165.
Promoting Safe Behaviors in the Workplace
Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.
Safety awareness is one of the most important factors in reducing workplace injuries. There are approximately three million workplace injuries, every year. This amounts to roughly 8,000 injuries per day, 350 per hour, or 6 injuries per minute. Many of these injuries are preventable. Unsafe behaviors or decisions are usually the most common contributing factors. If employees are unaware of hazards or not motivated to follow safety protocol, their behavior will expose them even more.
Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.
Safety awareness is one of the most important factors in reducing workplace injuries. There are approximately three million workplace injuries, every year. This amounts to roughly 8,000 injuries per day, 350 per hour, or 6 injuries per minute. Many of these injuries are preventable. Unsafe behaviors or decisions are usually the most common contributing factors. If employees are unaware of hazards or not motivated to follow safety protocol, their behavior will expose them even more.
Promoting safe behavior in the workplace can be one of the most impactful ways of reducing injuries. I encourage business owners to go above and beyond the required controls and measures such as engineering, administrative, and personal protective equipment (PPE) and promote safe behaviors and a safe work environment. Below are examples of ways ownership and management can promote safe behaviors.
Conduct frequent safety meetings with employees and encourage participation. Discuss previous injuries or near misses with your employees to identify the root cause and any corrective actions that are necessary. Be aware that not all corrective actions are readily accepted by employees, especially those seasoned employees that are set in their ways. It is important to listen to their concerns, analyze and modify the procedure or task so that the employee will buy into the changes and not be tempted to break the rules and work unsafely.
Give recognition to employees who are performing tasks safely and demonstrate proper behaviors. A little bit of recognition amongst your peers can be extremely influential and can further promote safety in the workplace.
Involve the employees in identifying and correcting hazards in the workplace. This can promote self-worth in an employee. Your employees are your eyes and ears in the field and they may identify an overlooked workplace hazard. It is especially impactful when the corrective action was a hazard they identified on their own.
Perform safety observations to encourage safe behaviors. While supervisory observations are important, business owners should also consider peer to peer safety observations. By collaborating with employees and involving them in the safety program, it will help them buy into any changes that are necessary further promoting workplace safety.
Having ownership and management consistently express their concerns for their employees well-being and safety is another way to promote safe behaviors. As a business owner, communicating to your employees that your main concern is their safety can drastically change the culture of a business. Reminding your employees that you want them to go home safely each day, goes a long way.
Promoting safe behaviors in the workplace starts with ownership and management, but is executed daily by the workforce. Providing sound policies and procedures relating to safety, along with a strong collaboration between ownership, management, and staff can drastically improve safety in the workplace and promote a safety culture.
Rancho Mesa Insurance Services, Inc. is a strong advocate for workplace safety. We like to take a risk management approach with our clients and prospects to develop a program that fits their needs. Please feel free to reach out to me, Jeremy Hoolihan, at (619) 937-0174 to see how Rancho Mesa can improve your risk profile.
Protecting Employees from Third Party Harassment
Author, Chase Hixson, Account Executive, Human Services Group, Rancho Mesa Insurance Services, Inc.
The recent changes to California’s Anti-Harassment Training Requirements have prompted employers to take a closer look at their internal operations and how they can eliminate harassment from the workplace. A question that is frequently asked is “What happens if the harassment comes from someone other than one of my employees?” This is known as Third Party Harassment.
The recent changes to California’s Anti-Harassment Training Requirements have prompted employers to take a closer look at their internal operations and how they can eliminate harassment from the workplace. A question that is frequently asked is “What happens if the harassment comes from someone other than one of my employees?” This is known as Third Party Harassment.
Third Party Harassment is when someone outside the organization harasses an employee. With a heavy focus on home care/home health care, third party harassment can arise between a nurse and an elderly client. In some cases, advances are made towards a nurse - further compounded in some cases by dementia or Alzheimer’s. Restaurants and bars are another common place where this type of harassment can occur when a patron or supplier harasses an employee. However, this type of harassment can occur in any industry where employees interact with people outside the organization. Several questions arise in these instances: As the employer, am I liable for third party harassment? What can I do to address this? Can I insure against this type of harassment?
Is the employer liable for Third Party harassment claims?
The short answer is yes. An employer is responsible for creating and maintaining a harassment-free workplace for their employees. Failure to act on a third part harassment claim is not an option.
What can an employer do to address a potential situation?
If you become aware of an alleged act of harassment, act quickly. Engage the employee with sympathy. Not only will this show them that you care, but you need their input if you are going to maintain a safe work environment. Implement corrective actions immediately and ensure the employee will not be adversely affected. Investigate the incident through interviewing and evidence collection. Document all that was discovered and determine who is involved and what occurred. Depending on the seriousness of the incident(s), legal action may be necessary. In many cases, simply removing the employee from the situation and have a conversation with the alleged harasser is all it takes. For example, with the employee’s input, you may switch their schedule to work with a different client. If your employee is a sales representative, you might try switching accounts with another employee so they no longer need to work together.
If the harassment continues or is severe, you may need to stop doing business with the alleged harasser. While this might be difficult to do, the long term effects on employee morale and decreased likelihood of a harassment suit are worth it.
Does insurance cover these suits?
An Employment Practices Liability Insurance (EPLI) policy can cover against such claims, but only if it specifically includes “Third Party” in the wording. Some EPLI policies exclude or limit coverage. It is important when working with a broker that you clarify the coverage so you aware of what you are buying.
Rancho Mesa Insurance clients have access to free online supervisor and employee Anti-Harassment training designed to educate the entire organization on the types of harassment, remedies, and the organization’s responsibilities.
If you have any questions, or any questions regarding California’s New Anti-Harassment Laws, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.
What is the General Indemnity Agreement & Who Has to Sign It?
Author, Andy Roberts, Account Executive, Surety, Rancho Mesa Insurance Services, Inc.
Most questions that we receive from contractors new to the industry or new to bonded work usually center around what is a General Indemnity Agreement (GIA) and why do they (ownership) and spouse(s) have to sign personally.
Author, Andy Roberts, Account Executive, Surety, Rancho Mesa Insurance Services, Inc.
Most questions that we receive from contractors new to the industry or new to bonded work usually center around what is a General Indemnity Agreement (GIA) and why do they (ownership) and spouse(s) have to sign personally.
A GIA is a contract between the surety and the contractor (principal), where the surety agrees to provide bonds for the contractor. This is a standard document in the construction and surety industries. Its basic purpose is to protect the surety company from any loss or expense that the surety sustains as a result of having issued bonds on behalf of the principal.
Through the protections in the GIA contract, the principal will be required to reimburse the surety for any losses that they incur as a result of the principal not fulfilling their obligations identified in the job contract. This is why the GIA is signed both for the company and personally.
When executing this document, the surety will almost always require that it be signed by all owners, both for the company and personally, and their spouses, which can alarm some people. In the surety’s case, they need seek a complete indemnity package, with all owners and spouses, in order to protect themselves against a situation where one spouse may transfer assets to another spouse to prevent the surety from having access to them in the event of a loss.
This article was designed to be a basic overview of a GIA and its purpose within the relationship between the contractor and the Surety. If you have any questions about this article or General Indemnity Agreements, please contact Rancho Mesa Insurance Services at 619-937-0166.
Understanding Your Claims: What Do You Have To Lose?
Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.
Claims happen. They come in all shapes and sizes, from all types of parties, and can cost your company in many different ways. An important aspect of managing the costs of risk start with gaining a clear understanding of your claims. Our clients are always looking to improve their bottom line. This article focuses on just one piece of the pie chart; workers compensation claims. Understanding the nuances of these cases can create measurable plans in the future to reduce frequency and severity of claims and ultimately lower your costs.
Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.
Claims happen. They come in all shapes and sizes, from all types of parties, and can cost your company in many different ways. An important aspect of managing the costs of risk start with gaining a clear understanding of your claims. Our clients are always looking to improve their bottom line. This article focuses on just one piece of the pie chart; workers compensation claims. Understanding the nuances of these cases can create measurable plans in the future to reduce frequency and severity of claims and ultimately lower your costs.
DIG UP THE ROOTS
Perhaps the most common problem solving method for identifying causes of problems or faults is referred to as a “Root Cause Analysis.” As someone who likely manages many facets of your business, developing systems that analyze failures of a process makes complete sense. Once a claim occurs, initiate an Accident Investigation that is meant to uncover all of the small details that ultimately led to the injury or incident. In many cases, a Best Practices approach involves this same process for “near miss” incidents. That is, perform the same process despite the fact than injury did not actually result from the incident. This allows your company to refine the approach, improve the analysis, and develop training modules addressing the failure(s).
MORE QUESTIONS LEAD TO ANSWERS...
When claims occur, proactive business owners build a list of specific questions that deliver uncensored facts. Those facts build a story and allow your team a clear view of what really happened. Some examples of questions that can be used by your team are listed below:
How long had this injured worker been employed with us before the claim occurred?
Was the employee following protocol when the injury occurred?
Did the claim occur at the beginning or end of the day?
How quickly did our team provide assistance and get him or her the care they needed?
How quickly was the claim reported to our insurance company?
Have we had incidents like this in the past?
ROLE PLAYING EXAMPLES
While role playing actual incidents and scenarios is not factual, it helps your team walk down a path to understand “what if” scenarios and forces discussion on how to address issues.
Example: Employee ‘A’ was injured when he fell from a ladder and fractured his leg. He had been employed for only two months. The injury that occurred was caused by a lack of proper training as the ladder was not properly secured. This claim occurred in the early morning and the area surrounding the ladder was wet. The team reacted quickly and was able to transfer the injured worker to an emergency room in less than an hour. The claim was reported 3 days from the incident. There have been two other similar “near misses” with ladders that did not result in injury.
Understanding your claims is a vital step in preventing future incidents. An investigation of an incident or near miss can uncover the root cause, explain the circumstances surrounding the incident, and help to identify scenarios and prevention plans. To learn more about understanding your claims, register for the Accident Investigation and Analysis training in Rancho Mesa’s Risk Management Center.
Stay Off OSHA's Radar with an Effective Ladder Safety Program
Author, Casey Craig, Account Executive, Construction Group, Rancho Mesa Insurance Services, Inc.
Year after year OSHA publishes the “Top 10 Most Cited Violations” and it always seems to include violations dealing with falls. Fall protection, scaffolding, ladders, and fall protection (training requirements) all made this list and all of them have been on this list perennially for over a decade. How can a company that is using ladders keep from becoming just another name on the list of violators? How can you ensure that your employees are using provided equipment properly?
Author, Casey Craig, Account Executive, Construction Group, Rancho Mesa Insurance Services, Inc.
Year after year OSHA publishes the “Top 10 Most Cited Violations” and it always seems to include violations dealing with falls. Fall protection, scaffolding, ladders, and fall protection (training requirements) all made this list and all of them have been on this list perennially for over a decade. How can a company that is using ladders keep from becoming just another name on the list of violators? How can you ensure that your employees are using provided equipment properly?
The biggest mistake made with work at height is letting your employees perform their work using materials that are not meant for that job. Employees finding a chair, bucket, or truck to stand on to get those couple extra feet are the easiest ways to lead to an accident. From A-frames to extensions and step stools, there is a perfect tool for the job at hand. It does take a little preparation before sending your employees onto the job site. Having your supervisors make sure ladders are properly set up and fully functional to ensure your employees safety is as important as training your employees how to use a ladder.
Ladders have not miraculously become safer over the years. The materials used in making ladders may have changed, but the injuries that occur from using them have been the same. Here are some common misuses:
Trying to overextend reach at the top of a ladder, instead of taking the time to get all the way to the bottom to move the ladder and maintain three points of contact.
Stepping off from the third rung instead of keeping three points of contact all the way to the ground.
Setting the ladder at the wrong angle before climbing (70-75 degrees is desirable).
Trying to move a 70 pound ladder without asking for help and losing control.
There are countless ways that rushing or not paying attention to detail can leads to injuries. The American Ladder Institute (ALI) claims all injuries that occur on a ladder are preventable with the proper attention to detail. If you know that a ladder has a bent rung, or the frame is compromised, the risk is not worth having an employee get on that ladder. Ladders are manufactured to withhold four times the weight they are rated for, but if damaged there is no telling what could make it catastrophically defective. Make sure that there is enough tread on the foot of the ladder to keep your ladder in place while working at height.
Now that we know a little about our exposure, let’s see what we can do to fix the problem. Making sure you have the right equipment is by far the most important step to keep you from running into a violation. Keep your employees trained in proper ladder safety, and only let the employees that have been trained on a ladder. Properly tie off ladders, maintain your equipment over time, and attend ladder safety seminars regularly. One huge tool that is underutilized in the construction industry is having a consultation meeting with OSHA. Have them come out and inform you of things you could be doing better without the worry of being fined. OSHA is meant to be a tool to keep your employees safe, don’t hesitate to use them.
For questions about ladder safety seminars or what policies may match your company’s risk, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164. We look forward to helping better your risk profile.
Pollution Liability for Landscape Contractors
Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.
Most Landscape Contractors believe their exposure to pollution is limited to the herbicides, pesticides, and fertilizers they apply. In order to provide some limited coverage for this it is common to see the Herbicide/Pesticide Endorsement added to the Commercial General Liability Policy. Although the endorsement extends some coverage, Contractor’s Pollution Liability would help fill the gaps created by the General Liability Policy for all of the landscape contractor’s pollution exposures.
Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.
Most landscape contractors believe their exposure to pollution is limited to the herbicides, pesticides, and fertilizers they apply. In order to provide some limited coverage for this it is common to see the Herbicide/Pesticide Endorsement added to the Commercial General Liability Policy. Although the endorsement extends some coverage, Contractor’s Pollution Liability would help fill the gaps created by the General Liability Policy for all of the landscape contractor’s pollution exposures.
Remember, General Liability Policies do not provide coverage for pollution. Contractors Pollution is protecting your environmental liability, and in today’s world the awareness to preserve the environment has never been stronger. A landscape contractor’s exposure to environmental liability is considered “high” and classed as “high” along with drilling, subsurface, site/dirt work, paving, mechanical and electrical contractors to name a few.
Landscape contractor operations are almost exclusively performed outdoors in the environment which is the result of the high exposure. Beyond herbicide, pesticide, chemical applications and the property damage or bodily injury that may arise from such operations, other material exposures would include but are not limited to; fuel, oil, fumes, hydraulic fluids, silica, foundry sand, manure, dust, waste, water, natural gas, propane and mold.
The Herbicide Pesticide Endorsement is an essential piece to any landscape contractor’s insurance program; however, a Contractors Pollution Liability policy is the best way to transfer your environmental exposure. Not all pollution policies are the same: capacity, coverage, exclusions and deductibles need to be examined. Making sure you have a policy that fits your operations and your exposure is critical.
For questions about which policies may match your company’s risk, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.
What Does the Employer Do After a Work Injury?
Author, Jim Malone, Workers’ Compensation Claims Advocate, Rancho Mesa Insurance Services, Inc.
A work related injury can be a very traumatic event for the injured worker, but also for their co-workers, employer, family and friends. Some injuries occur from a specific event when everybody knows the injury occurred. Other times, incidents occur during the work day, or repeatedly over time, where the employee needs to report these incidents, accidents or developing symptoms to his supervisor, manager, or human resource manager according to company protocol.
Author, Jim Malone, Workers’ Compensation Claims Advocate, Rancho Mesa Insurance Services, Inc.
A work related injury can be a very traumatic event for the injured worker, but also for their
co-workers, employer, family and friends. Some injuries occur from a specific event when everybody knows the injury occurred. Other times, incidents occur during the work day, or repeatedly over time, where the employee needs to report these incidents, accidents or developing symptoms to his supervisor, manager, or human resource manager according to company protocol.
Prompt reporting of a work injury is very important for the employer and their continued responsibilities. The employee reports the injury or accident to his supervisor, manager, or appropriate employer representative. The employer than has 5 days to report the incident to the insurance carrier.
Once reported, the employer can examine the scene of the accident and verify the mechanism of injury. Witnesses can be identified and their statements can be obtained. If the cause of the accident was another person, that person can be identified and their information can be obtained. If caused by a tool or apparatus, that tool or item can be removed from the work place and kept in a secure area for future reference. If caused by a dangerous condition, the condition can be corrected or barricaded to prevent additional injury.
Work injuries usually result in instances where the injured worker reports the injury to their employer and they are interviewed and referred to an occupational medicine facility. There are companies that provide medical professionals that triage, the injury with the employee via telephone, or a visit to the workplace. The employee may be allowed to drive themselves to this facility or may have to be driven by a supervisor or foreman. The employee is instructed to provide the employer the Work Status form from the physician immediately after each and every examination or follow up visit. If he is released to work, his employer needs the physician’s release to allow a return to work and if they are released to modified duties, the employer then determines if modified work is available. If modified work is not available, the employer than sends the injured worker home until his next visit or until modified work becomes available.
When the injury is addressed, there are forms that need completed for the work related injury. The most important document is the DWC 1 Claim Form. This form MUST be provided to the injured worker within 1 DAY of when the employer knows of the injury. This form starts the claims process with the insurance company. It is a two part form where the employee completes the top part and the employer completes the bottom. Upon completion, the form is submitted to the insurance company and copies are provided to the injured worker and kept by the employer. The employer is then to complete the Employer’s First Report of Occupational Illness of Injury Report (ER’s 5020 form). Then, they obtain the Supervisor’s Report of Work Injury Report and any witness statements that may have been obtained. All these forms and reports are submitted to the insurance adjuster upon receipt and/or completion.
Now that the claim has been created, the employee is obtaining medical treatment, and all the forms have been completed and submitted, the employee’s progress will be monitoring during their recovery. Maintaining good communication with the employee and claims adjuster is very important for helping the employee get through this recovery process.
For additional information, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.
What Do You Mean My Deductible Is Infinity?
Author, Kevin Howard, CRIS, Account Executive, Rancho Mesa Insurance Services, Inc.
In this unsettling time throughout various workforces, it makes good business sense to consider EPLI options with varied deductible ranges. Having that clarity brings comfort to many clients who have worked years to build their business, acquire assets, and improve their net worth. Exposing their business to what could very well be unlimited costs creates considerable risk moving forward.
Author, Kevin Howard, CRIS, Account Executive, Rancho Mesa Insurance Services, Inc.
Employment Practices Liability Insurance (EPLI)
Employment Practices Liability Insurance (EPLI) can protect companies from claims related to wrongful termination, discrimination, defamation, unfair hiring/firing practices, and wage and hour lawsuits. EPLI policies may also provide defense costs associated with responding to employment related lawsuits.
HIGHER THAN AVERAGE DEDUCTIBLES
With the increasing frequency of EPLI claims and 40% of California claims occurring within companies with less than 100 employees, deductibles have risen to previously unseen levels. It is now common to see per claim deductibles at a $10,000 starting point and jumping as high as $50,000. These higher retentions can, at times, deter many employers from securing coverage when they might need it most.
YOUR DEDUCTIBLE IS INFINITY
For those employers who elect to self-insure this exposure and go bare without a policy, there is a question that needs to be asked. What is your deductible without EPLI coverage? The simple, very possible answer is that it can be infinity. That is, an employer is responsible for the first dollar to defend along with any future negotiated settlement. That unknown is why many of our clients ultimately purchase EPLI as their balance sheet cannot absorb an infinite loss.
ATTENTION BUSINESS OWNERS!!!
In this unsettling time, across various workforces, it makes good business sense to consider EPLI options with varied deductible ranges. Having that clarity brings comfort to many clients who have worked years to build their business, acquire assets, and improve their net worth. Exposing their business to what could very well be unlimited costs creates considerable risk moving forward.
COMMON MISCONCEPTIONS
Misconception: “If I file an EPLI claim, I will owe the entire deductible upfront.”
Truth: When a claim is filed, policy holders will team up with an attorney who will bill hours until your self-insured retention is met. This could run the course of years with small bills being paid out over time.
Misconception: “I can’t afford to pay an entire annual premium at once, on top of my other insurance renewal premiums.”
Truth: Rancho Mesa can generate a finance plan that will allow you to pay your premiums over a 12 month period.
Misconception: “If I ever have a claim occur, I will just purchase a policy at that time to protect my business.”
Truth: EPLI carriers include prior acts exclusion for this very reason. Any claim that has been made, even in its infant stages, will be declined. You must have a policy in place in advance in order to protect yourself.
Misconception: “I have never had an EPLI claim. Why would I have one now?”
Truth: The California mandate AB 1825 and SB 1343 have increased awareness and visibility of employment related lawsuits. In light of workplace discrimination concerns and the #MeToo movement, the State of California requires all employers with more than 5 employees to conduct Sexual Harassment Prevention Training.
Misconception: “My general liability policy covers EPLI.”
Truth: General liability carriers exclude employment practices liability. If you were to file a claim they would deny coverage.
Business owners deserve a clear explanation of ways to protect themselves from insurable risk. If you would like to discuss how your business is protected, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.
4 Essential Tools For Managing Your Company's Risk
Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.
Risk Management is the identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. Companies manage their risk through what is known as an Injury and Illness Prevention Program (IIPP). As a business owner, supervisor or manager, there are tools available to assist in risk management endeavors.
Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.
Risk Management is the identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. Companies manage their risk through what is known as an Injury and Illness Prevention Program (IIPP). As a business owner, supervisor or manager, there are tools available to assist in risk management endeavors.
“Injury and illness prevention programs are systems that can substantially reduce the number and severity of workplace injuries and illnesses while reducing costs to employers,” according to OSHA.
Below are four tools your company can use to proactively manage the IIPP.
Training
Access to a robust bilingual database of both online and offline trainings is essential to ensuring employees are up to date on required and supplemental training. Weekly training shorts (e.g., tailgate topics, safety shorts) that are industry specific and relevant keeps employees focused on safety and reinforces a safety culture within the company.
“Training in the safe way for workers to do their jobs well is an investment that will pay back over and over again in fewer injuries and illnesses, better morale, lower insurance premiums and more,” according to OSHA’s training requirements document.
Tracking of Employee Training
Maintaining employee training documentation is vital for ensuring employees are trained on required topics and in regular intervals. Having an electronic tracking system can streamline the process and allow management to generate reports and search records from any device with internet access.
According to OSHA’s documentation, “it is a good idea to keep a record of all safety and health training. Documentation can also supply an answer to one of the first questions an incident investigator will ask: ‘Did the employee receive adequate training to do the job?’”
To learn more about OSHA training requirements, review Training Requirements in OSHA Standards.
Incident Tracking and OSHA Reporting
Documenting near-misses, injuries, and accidents can keep your company OSHA compliant while helping to prevent incidents in the future. Making sure supervisors complete a thorough investigation and collect witness statements at the time of the incident can also ensure hazards are addressed immediately. Electronic documentation of a near-miss or incident creates a standardization of data that is collected, allows for trend reporting, and electronic submission of OSHA 300A Summary data.
Written Job Hazard Analysis
A job hazard analysis (JHA) identifies the dangers of specific tasks in order to reduce the risk of injury to workers. JHAs are important for managing risk because they help to identify hazards which can be reduced or eliminated before an employee is hurt. Once a JHA is established, management should observe and document their findings and any remedies that are made.
Risk Management starts with a written IIPP, but it is up to management to implement and utilize the available tools to make it effective. Contact Rancho Mesa’s Client Services Department at (619) 438-6869 to learn more about the Risk Management Center platform.
Group Captive Insurance 101
Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.
The property and casualty market over the last decade has been what we consider “soft.” Overall, insurance premiums have remained relatively flat, or in the case of workers’ compensation rates have decreased considerably. However, we are seeing significant pricing pressure in commercial auto. In the next few years we expect to see the same pressure in workers compensation. One alternative risk financing strategy that you may want to consider before the coming hard market is a member-owned group captive.
Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.
The property and casualty market over the last decade has been what we consider “soft.” Overall, insurance premiums have remained relatively flat, or in the case of workers’ compensation rates have decreased considerably. However, we are seeing significant pricing pressure in commercial auto. In the next few years we expect to see the same pressure in workers compensation. One alternative risk financing strategy that you may want to consider before the coming hard market is a “Member-Owned Group Captive.”
A member-owned Group Captive is an insurance company owned and operated by captive members, strictly for the benefit of those members. This structure enables middle market companies the ability to increase their underwriting credibility through the collective purchasing power of the group. These groups can be related or homogeneous, like a trade group or association, or unrelated/heterogeneous which could be companies similar in size.
Advantages of a Group Captive
Lower Insurance Premiums over time
Financial Incentives for strong Loss Control
Increased control over claims management
Long term control of your Insurance Pricing
Investment Income
Who should consider a Group Captive?
Companies that have shown long term financial strength.
Owners who are committed to safety and have strong safety programs in place.
Loss histories that are significantly better than average in their respective industries.
Annual insurance premiums of $150k or more for workers compensation, general liability, and commercial auto.
Businesses that are seeking long term control over their risk financing costs.
To learn more about Captives, register for our workshop held on April 16, 2019 from 9:00 a.m. to 11:00 a.m. at the Boys & Girls Club of East County administrative offices in Santee, CA. Doug Hayden from Captive Resources, LLC will provide an informational presentation about Captives and if it is the right fit for your business.
For other insurance-related questions, please contact Rancho Mesa Insurance Services at
(619) 937-0164.
Painters Stretching Can Lead to Reduced Premiums
Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.
Having played professional baseball for several years, I know the importance of stretching to prepare oneself for the day. My team would stretch when we got to the field, then again before batting practice, and once more before the game started. Most people reserve stretching for sporting events. They forget the importance of stretching before work - feeling they will “loosen up” as the day goes along. However, there are countless ways for employees to become injured and those medical bills can grow all too fast.
Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.
Having played professional baseball for several years, I know the importance of stretching to prepare oneself for the day. My team would stretch when we got to the field, then again before batting practice, and once more before the game started. Most people reserve stretching for sporting events. They forget the importance of stretching before work — feeling they will “loosen up” as the day goes along. However, there are countless ways for employees to become injured and those medical bills can grow all too fast.
While there are things that can be done to try to mitigate the claims after they occur, the best way to save on your premium is to prevent injuries from ever happening. If you can set aside just 5 minutes a day for your employees to stretch their muscles that will be used throughout the day, that could reduce strain and pull claims dramatically.
As recent as 2015, the WCIRB has broken down the most common injuries that occur in the 5474/5482 class codes. 57% of the injuries could have possibly been prevented by allotting just a few minutes a day for stretch and wellness. The most common injuries for painters are to their lower extremities, back, and upper extremities (not including the hand). It is easy to see, that with all the bending down and painting above their heads, cumulative injuries are going to happen if no precautions are taken. An average claim for these types of injuries can cost just shy of $35,000. Having multiple claims of these types can be crippling for a company.
Having employees stretch when they get to the jobsite, and after lunch is the best way to reduce soft tissue claims. Making sure the legs are ready to bend, the back and neck are stretched out, and shoulders are prepared for the work at hand, is as important as anything they will be doing that day.
Your employees may need a little extra energy in the morning, but caffeine reduces blood circulation and can lead to stiffness when returning from lunch. It is important to get the blood flowing again with some trunk twists, toe touches, and arm swings. This will increase blood flow throughout the body. Finally, inflammation can worsen as the day progresses, and having leafy greens reduces inflammation. Providing a healthy lunch can help to build morale and keep that nagging soreness away while increasing productivity.
Rancho Mesa has put together a Mobility and Stretch Program™ for their clients. The program has reduced the number of reported strain and pull claims, and has significantly helped drop clients’ MODs. Please reach out to Rancho Mesa Insurance Services, Inc. with any questions you may have.
The Benefits and Risks of Third Party Indemnity
Author, Andy Roberts, Account Executive, Surety Division, Rancho Mesa Insurance Services, Inc.
For a contractor that is wanting to bid a job, or has won a job that’s requiring a bond that they are not able to qualify for on their own, one option for increasing their bond capacity and ability to qualify would be to have a third party also indemnify to their Surety. While there are definite risks, this type of agreement can be very beneficial to both parties.
Author, Andy Roberts, Account Executive, Surety Division, Rancho Mesa Insurance Services, Inc.
For a contractor that is wanting to bid a job, or has won a job that requires a bond they are not able to qualify for on their own, one option to increase their bond capacity and ability to qualify would be to have a third party indemnify to their surety. While there are definite risks, this type of agreement can be very beneficial to both parties.
For the contractor, the main benefit is the additional financial backing provided by the third party that will help alleviate concerns of a surety that might lead to the contractor running out of money, therefore, not being able to complete the job as contracted. For the third party, they can negotiate what their compensation will be through the contractor, since they are taking on a financial risk by signing the indemnity agreement. This type of agreement should not be entered into lightly because there are risks for both the contractor and the third party.
A Surety Bond Indemnity Agreement is a signed agreement which states the principal will indemnify the surety company, should a claim occur. When a third party also signs this agreement, they are opening themselves up to the risk of having to indemnify the surety should the contractor that is doing the work fail to complete it, forcing the surety to step in to complete the job. This becomes even more likely if the contractor becomes insolvent, making the third party next in line for indemnity purposes. While there is risk associated with this type of agreement, there are ways to mitigate that risk and that is for both the contractor and the prospective third party to thoroughly review each other’s businesses.
When a third party is providing indemnity to support another businesses project, it is vitally important that they have a firm grasp of that company’s current capacity, capital and character, and this is the same for the contractor. The contractor needs to know that if they do get into trouble on the job, the third party does in fact have the ability to help them out of the situation.
For any questions regarding third party indemnity, please contact Rancho Mesa Insurance Services at (619) 937-0164.
3 Ways for Nonprofits to Opt Out of Unemployment Tax
Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.
Nonprofit leaders who want to reduce overhead and tax burdens should consider revisiting their organizations’ unemployment tax status. More to the point, thanks to the Federal Unemployment Tax Act of 1972, nonprofits can eliminate the unemployment insurance tax and outsource the headache of claims administration. Let’s investigate further.
Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.
Nonprofit leaders who want to reduce overhead and tax burdens should consider revisiting their organizations’ unemployment tax status. More to the point, thanks to the Federal Unemployment Tax Act of 1972, nonprofits can eliminate the unemployment insurance tax and outsource the headache of claims administration. Let’s investigate further.
Traditionally, the state charges a nonprofit employer payroll tax to fund the state unemployment insurance program. Each nonprofit’s tax rate adjusts each year depending on employee turnover and unemployment claims. According to several sources, nonprofits pay an average of $2.00 in taxes for every $1.00 in paid claims. So how do we reduce this overage?
Now for the good news; nonprofits are not required to pay the state unemployment tax. Provision 3309a of the Federal Unemployment Tax Act allows 501(c)(3)s to choose whether to pay into the state program at the prescribed tax rate, or to pay into the program an amount equal to the actual unemployment benefits paid out by the state program. In other words, a nonprofit employer may “opt out” and reimburse the state.
Below are three “opt out” and administrative solutions a nonprofit should consider depending on its desired level of risk.
First Dollar Insurance: A private insurance company provides a fixed rate based on the nonprofit’s individual claims history and expected future claims. This option provides budgetary certainty with a low-risk product. If unemployment claims exceed expectations, there is no additional cost to the employer.
Customized Stop-Loss Insurance: For nonprofit leaders who want to accept more risk and realize higher savings, the employer pays an agreed upon self-insured retention, after which point the insurance company pays all benefits.
Nonprofit Unemployment Trust: For nonprofit organizations with high employee retention or low unemployment claims frequency, a trust can offer a high return in exchange for higher risk. In most cases, the trust protects the employer against unexpected, catastrophic charges. The nonprofit employer has a high retention that must be met before the protection is triggered.
Each solution presented above provides services to further reduce risk and unemployment expenses. These services include claims management, hearing representation, unemployment cost management training, and transparent billing and accounting.
Whether the nonprofit pays unemployment taxes or reimburses the state, there are advantages and disadvantages. Nonprofit leaders who understand these details and the nuances of each solution will have the confidence to move forward in the direction that best suits the organization.