California Assembly Bill 5 Means Changes for Workers’ Compensation Insurance

California Assembly Bill 5 (also known as CA AB 5) was signed into law in September 2019, implementing a new test all employers must use to determine if a worker is an employee or an independent contractor under the California Labor Code. The law may impact who you cover under your workers’ compensation insurance policy.

CA AB5

While the bill is effective January 1, 2020, the part that affects workers’ compensation insurance coverage goes into effect July 1, 2020.

Know The Facts

  • The new legislation is not based on policy effective date. As of July 1, 2020, as an employer, you’ll be subject to the new test. This means that a worker could be classified as an independent contractor before July 1, 2020 and as an employee after July 1, 2020.
  • If you’ve employed an independent contractor that can supply you with a certificate of workers’ compensation insurance that is effective during your policy period, he/she would not be considered part of your employee roster. You would not report payroll for him/her.
  • In order to avoid an unexpected change in exposures at time of audit, you must include payroll for all employees defined by the statute as of July 1, 2020.
  • The statute applies to businesses headquartered in California AND businesses headquartered elsewhere with employees working in California.

Got questions? Contact me. I’m here to help you with this law change in any way possible.

-JK

Beware: Communicable Disease Exclusion for Commercial General Liability Insurance

With more businesses set to slowly open their doors again, I’m certain that insurance carriers are going to start adding this Communicable Disease Exclusion onto Commercial General Liability insurance policies at renewal. I’ve reviewed various policies of my insured’s to see if this exclusion is tucked away in any current policies and I am not seeing much of it at this time, but I bet it’s coming. Here’s the policy form/exclusion I’m referencing:

It’ll be interesting to see how insurance carriers respond. Will they potentially remove it for an additional premium, or if it’ll be straight non-negotiable?

My suggestion is to keep your eyes open on your general liability policy to see if this is added at renewal and what the potential repercussions are for your business.

I think in due time, new regulations will be put in place within the insurance industry to address communicable diseases, but I feel this is critical to look at now from a Risk Management standpoint.

-JK

Burglary and Theft Prevention

A lot of businesses are shut down right now and suddenly there are many individuals who find themselves out of work. Premises’ that are typically bustling with business and commerce are at a standstill sitting vacant as we wait for this Coronavirus pandemic to pass.

Photo by Bich Tran on Pexels.com

I’m hoping this doesn’t become a trend but just this morning alone, I had two different retail clients call in to report claims burglary and theft overnight with the doors busted open as a point of entry. Luckily due to monitored alarm and surveillance cameras, the burglars didn’t seem to get away with much based on early indications.

This serves as a reminder to be vigilant with your business premises and your neighbors in the surrounding areas.

Here is a Burglary Prevention Checklist from The Hanover Insurance Group to help get your brain thinking about measures you can take to help prevent burglary and theft at your place of business. We have enough to deal with right now, so let’s try to eliminate additional perils like this if at all possible.

-JK

Coronavirus Emergency Loans Small Business Guide and Checklist

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans
to small businesses.

Photo by Anna Shvets on Pexels.com

Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.

Here are the questions you may be asking— and what you need to know:

Two Things You Can Do Today to Lower Your Business Insurance Premiums to Weather the Coronavirus Storm

Last week was tough. Call after call, I spoke with business owners and others in management roles who are feeling scared and anxious right now for obvious reasons. Due to the effects of the Coronavirus, they’ve already had to either lay off staff or furlough their hours to save on operational costs.

Some were calling to inquire about canceling their insurance coverage entirely until we get through this storm. My advice has been that we might not need to go down that road right now.

Photo by Branimir Balogović on Unsplash

Before taking such drastic matters, here are two things you can do today to lower your insurance premiums without sacrificing or eliminating your current coverage:

  1. Review your estimated annual sales with your commercial insurance agent/broker and make adjustments to your liability insurance policies. Liability insurance premium is typically rated in accordance with gross annual sales/revenues, subject to audit at the end of the policy term. Rather than wait for the audit at the end of your current policy term, adjust your policy now to get the premium down which will help save on your monthly costs.
  2. For your Workers Compensation insurance policy, review your estimated annual payrolls and make any adjustments now rather than wait for the annual audit or canceling the policy altogether. If you’re at a standstill and do not have any payroll, or very minimal payroll, make the adjustment now.

Insurance carriers are making billing accommodations and extending grace periods for cancellations by as many as 60 days. Call your insurance carrier billing departments right away and explain your situation. Do not wait. They’ll most certainly make accommodations based on the current state of affairs.

Times are challenging for the entire world right now, but I believe we’ll get through this just as fast as we were thrown into it. Although insurance premiums aren’t the only operational cost for a business, they are one that we can control now by taking these types of measures. By doing this and maintaining your coverage, you won’t have to go through the process of re-applying for insurance once things are back to “normal.”

This too shall pass.

-JK

18 seconds of Some of the Best Advice You’ll Get on the Coronavirus

Well here we are, Monday, bunkered up in our homes with our tribes self quarantining ourselves from society the to help stop the spread of the Coronavirus. It’s eerily slow at work. There’s so much uncertainty in the air. I am positive this will pass soon though. As long as we all follow directions and do our part to help slow the spread of this thing. And the faster we stop the virus, the faster we can get this economy back in motion and pumping again.

I’m personally not worried about getting sick from the Coronavirus, I’m just anxious about the repercussions it will have on society and the economy.

I was skeptical about all the news at first but to those who don’t want to listen to authority, stop being stubborn and just listen to this. It’s 18 seconds of some of the best advice you’ll Get on the Coronavirus:

I don’t want people to get sick but most importantly I think we all can agree that we just want to get back to “normal” life and this is the only way we’re going to get there.

The faster the better

-JK

Radio Interview: The Different Types of Insurance To Protect Your Business

I hope you’ll catch my radio interview hosted by Candy Messer of Affordable Bookkeeping & Payroll. We discuss all things Business Insurance and Risk Management. From General Liability for a home based business to Cyber Liability and Employment Practices Liability for small to middle market companies. You can catch our interview HERE. Also, link included below.

Topics include: General Liability Insurance, Errors & Omissions Insurance, Cyber Liability Insurance, Businssowners Insurance policies, Employment Practices Liability, Workers Compensation, Risk Management.

-JK

Active Shooter Preparedness – Free Seminars from State Fund

State Compensation Insurance Fund, in partnership with the Department of Homeland Security, offers free seminars on Active Shooter Preparedness. These half-day courses provide important information about useful actions you can take to prepare for an active shooter event.

Participants will learn:

• The characteristics of an active shooter situation.

• How to identify and report criminal planning and preparatory acts.

• How to prepare and respond to active shooter and workplace violence incidents.

Each seminar is fast-paced, interactive, and includes lessons learned from previous active shooter incidents.

Local Southern California Dates are:

San Diego, CA
February 5, 9am – 12 pm
University of Phoenix, 9645 Granite Ridge Drive

Monterey Park, CA
February 12, 9 am – 12 pm &
1 pm – 4 pm
State Compensation Insurance Fund, 900 Corporate Center Drive

Register Here

USC vs. Oregon

Even though the Trojans were throttled by the Ducks 56-24 yesterday at the Coliseum, we enjoyed our day tailgating and watching college football under the lights on a perfect Fall Saturday. Spent the day with some great friends and broke away from the Orange Curtain for a night. #ILoveLA.

-JK

Life Happens

Some days or weeks, life just happens when you least expect it to.

My wife and I whom both work full-time in heavy sales roles were smacked in the face with the reality that our nanny has to tend to her own sick child for the next few days.

My wife was literally getting ready to walk out the door for work yesterday when she got the sudden news from our nanny. Without hesitation, she stopped what she was doing and readjusted her entire day to care for our daughter.

Today it’s my turn but I am not complaining, I love this girl!

My daughter C. and me

Technology allows me to get my work done anytime, anywhere. Albeit on my daughter’s clock today, not mine. I have my Agency Management System, my work phone, and my email all at my fingertips which allows me to serve my clients regardless if I am sitting in my office or not. Not to mention my support staff back at the office. How great is that?

I may not be as productive, but I’m not skipping a beat either.

Kids or not, life happens to everybody and we all must face reality. Props to my fellow soldiers out there juggling life and work and finding ways to get it done. It might not always be pretty, but somehow it always miraculously works itself out.

-JK

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