All Businesses Are Vulnerable to Catastrophic Auto Liability Claims
Last month, on August 9th, a tour bus carrying Japanese sightseers from Las Vegas, NV to a national park in Utah, crashed on Interstate 15 north of Cedar City, Utah. Three were killed in the crash and 11 injured.
This photo released by the Utah Highway Patrol shows the bus at the scene of a crash north of Cedar City, Utah
The 26 year-old driver of the bus was reported to have smoked marijuana heavily for several days before falling asleep at the wheel of the tour bus when it crashed. He was charged yesterday with 10 felony counts of negligent driving under the influence, and one misdemeanor charge of having marijuana residue in his system.
To date, no charges have been filed against the bus company he was driving for. That company supplied the shuttle bus and driver to other tour operators who organized the trip.
What if this happened to your business?
You might not be in the tour bus industry, but this doesn’t mean an accident of this magnitude can’t happen to your business. Do you own commercial autos titled under your business? Have a commercial auto insurance policy in force? Or, do you simply have employees run errands to the post office, store, or to pick up your lunch? What if your employee was distracted at the wheel and veered off the road killing or injuring others? Are you certain your business is covered for these circumstances? You may want to inquire with your insurance agent NOW to confirm.
Aside from having the proper insurance coverage in force to protect your business from auto liability claims, here are some basic risk management measures you can take as a business owner to help mitigate the situation. Although, following these measures is no guarantee accidents will NOT happen.
If you have additional stories, advice, or recommendations to share, please comment!
–JK
Workers Compensation and Strip Clubs Seem To Have Something In Common
From HRMmorning.com
It’s not what you think — workers compensation cheats aren’t spending their extra dough at strip clubs. Apparently, they’re making a little extra cash on and off stage.
It appears as though one of the best places to find a workers’ compensation cheats is at the local strip clubs.
Consider the evidence:
- A Quakertown, PA, woman was arrested and charged with two
counts of insurance fraud and theft by deception after an investigation found her working as a stripper at a local gentleman’s club while receiving workers’ compensation payments for a back injury. She had received nearly $23,000 in compensation and more than $4,000 in medical expenses after she claimed to have been injured in a fall while working as a waitress at a family restaurant.
- A Frankfort, NY, man was found working as a DJ for a strip club while collecting benefits for an accident he sustained as a painter 23 years ago. He had even denied in three written statements to the New York State Insurance Fund that he had returned to work. He was arrested on felony charges of third-degree insurance fraud and fraudulent practices after bilking more than $46,000 from the system.
- An Islip, NY, man has been charged with insurance fraud after police
found him working as a bouncer at an all-nude club while collecting worker’s compensation payments. Officials claim he defrauded the town of Islip, where he used to work as a mechanic, out of more than $17,000.
–JK
Lessons Learned – Week of September 12, 2010
How to dismantle and rebuild a Jeep in under 4 minutes:
Wow
Eyes On NFL Sexual Harassment Controversy
This week in the news, the National Football League is at the center of an alleged harassment controversy. Mexican TV reporter, Ines Sainz, was covering the New York Jets for TV Azteca at last Saturday’s practice. Allegedly, when she went into the team’s locker room to interview QB Mark Sanchez, who has Mexican heritage, she said she heard comments from players such as “Oh my goodness she’s here,” and “OK, I want to be Mexican.”
(cc) jrsnchzhrs/Flickr
The story is making news this week, however, Sainz said she couldn’t definitively say whether the Jets’ conduct crossed a line that would warrant discipline. Sainz noted that she did not initiate the complaints about Jets players’ behavior. She said she mostly ignored the treatment Jets players were giving her in the locker room.
Whether or not Sainz was harassed is to be determined, but this brings to light harassment issues in the workplace and how business owners can be exposed to these types of potential claims. Employment Practices Liability Insurance (EPLI) provides protection for an employer against claims made by employees, former employees, or potential employees relating to many types of employee related lawsuits including claims of sexual harassment, discrimination, wrongful termination, failure to employ or promote, etc.
Due to today’s economic times, there are significant increases in the number of employment practices liability related claims. Statistics show that businesses are four times more likely to face EPL claims than a fire loss of ‘slip and fall’ liability claim. Six out of ten employers have faced employment lawsuits in the past five years. The average EPL claim cost is about $163,000.
Even if a groundless or fraudulent claim is brought against your business, EPLI policies will reimburse your company against the costs of defending a lawsuit in court.
No business is invisible to Employment Practices Liability claims, not even professional football franchises. Is your business protected?
–JK
Liquor Liability Insurance Basics
“Drinking makes such fools of people, and people are such fools to begin with that it’s compounding a felony.” -Robert Benchley
You see it at sporting events, the company Christmas party, college campuses, bars, restaurants, weddings, concerts, tailgate party’s, birthdays, BBQ’s, everywhere! The list goes on. Booze is everywhere! The problem is, where there is alcohol being served or sold, there are always those who have had ten too many.
Those who get “over-served” often do dumb things which can be harmful to themselves and/or other innocent parties whom they encounter. That’s why businesses which manufacture, sell, serve, or facilitate the use or purchase of alcohol need to purchase liquor liability insurance.
Liquor liability insurance is a form of commercial insurance that protects businesses against loss or damages claimed as a result of a patron becoming intoxicated and injuring themselves or others. It provides coverage for bodily injury or property damage resulting from:
- Causing or contributing to the intoxication of any person;
- Furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or
- Violating any statute, ordinance, or regulation relating to the sale, gift, distribution, or use of alcoholic beverages.
Liquor liability is either sold as an add-on to a commercial liability policy or as a totally separate policy.
Liquor Liability laws vary by state. Some states have passed “Dram Shop Liability” laws which make it possible to hold those who serve alcohol to an intoxicated or underage customer responsible for damage or injury caused by these individuals. Most of these laws offer an injured person, such as the victim of a drunk driver, a method to sue the person who served the alcohol.
Originally, Dram Shop Liability laws were intended to apply to taverns, bars, and other establishments selling and serving alcohol. However, “social hosts” (such as those hosting a holiday party) also have some exposure to the risk of liability for serving alcohol.
When business owners host a holiday party and serve alcohol as part of the festivities, liquor liability would most likely be covered by their commercial general liability policy, but that is not a guarantee. It is best to check with your insurance agent first. Host liquor liability is a coverage under a commercial general liability insurance policy for businesses not ‘in the business of’ serving, manufacturing, distributing, selling, serving or providing alcohol.
Although damages in liquor liability lawsuits can be substantial, businesses often lack adequate liquor liability coverage. This exposes them to a substantial degree of liability. No matter how many measures a business owner takes to limit their liquor liability exposures, there’s no guarantee they won’t be dragged into a suit.
Drinking makes fools of people. Don’t allow their foolish actions ruin your business.
–JK
Lessons Learned – Week of September 5, 2010
GRENNE COUNTY, Ohio — (8/25) A 19-year-old, Brennan Eden, was driving well over 100 mph when he passed a police cruiser in the left shoulder of an interstate, striking a steel guard rail that sent his car flying into a bridge overpass. Amazingly, he survived!!
Lesson Learned: Either buy a bike or start taking the bus or something. Eden allegedly had prior legal trouble with traffic and speeding violations. According to his driving record, he was cited for failure to control after a crash last October. Then, just nine days later, records show that he was ticketed for driving 90 mph in a 65 mph zone. If he ever gets his license back, what do you think his insurance premiums would be?
Not So Fun Business Injury Facts
Businesses deal with risk everyday. Whether it be liability risks such as injuries to employees or customers, or property loss risks such as fire or theft, businesses must implement risk control and risk management procedures to protect their operations. Of course, accidents happen and this is why insurance is necessary. Here are six (not so fun) injury facts courtesy of Travelers Insurance:
- 25,000 slip and fall accidents occur daily in the U.S., accounting for 15 percent of all workplace accidents. It is also the leading injury to people on company premises.
- Back injuries account for more lost work time than any other workplace injury. Often, the source is improper lifting.
- Fires in commercial buildings cost more than $2 billion in annual property damage and loss. Lack of, or improper maintenance of sprinkler systems plays a significant role.
- Musculoskeletal disorders results in over $45 billion in loss wages and productivity costs. Organized office workstations and poor ergonomic practices are contributors.
- Adverse weather is the leading cause of vehicle accidents and fatalities. Many company drivers don’t understand the risk or how to adjust their driving behaviors.
- Falls from ladders injure over 20,000 American workers annually. Some injuries result in permanent disabilities and even fatalities. Safety starts before the ladder is even mounted.
Lessons Learned – Week of August 29, 2010
This week is the start of new college football season, so this is a college football theme with a ton of inspiration. This is a must see story about Jake Olson, a 12-year-old USC Trojan fan from California. He has become a staple of the USC football program since last season. The following video shows you why (ESPN did this piece at the end of last year). This one is guaranteed to weigh on your emotions. Seriously, I’ve never seen such optimism in someone. You’ll get your inspirational fix for weeks after watching this story:
Lesson Learned: There are a ton of lessons one can learn from this, but as a wise person once said, “Winning every battle does not define your character as much as how you handle yourself in moments of defeat”
What Makes a Good Business Insurance Agent?
It’s fair to assume that most business owners want to develop a long-term relationship with an insurance agent. They want this because they don’t really like insurance, nor do they bother to read insurance policies. They wish someone else would just take care of it for them! By partnering with a professional agent who does like insurance and actually does read policies, it’s one less worry for a business owner, and a big one.
The way the insurance market is set up is not really in the best interests of the business owner. Many small business owners are constantly being approached by insurance agents that may represent just a handful of carriers. These agents are really just sales agents for the insurance company. The insurance company might tell the agent something like, “we’re really competitive for workers compensation in the restaurant business.” These small agents will then call all the restaurants and say, “I can get it for you cheaper”. As a result, many small businesses have multiple agents because they have been buying based on price. If insurance policies were a commodity, that might be okay, but, if you’ve ever read one, you find they’re really complicated contracts. What the small business owner really needs is a broker that is not trying to feed a few carriers, but will truly place the insurance with the right carrier and the right price.
So, how do you make sure a business insurance agent is professional and reputable? Here’s what to look for:
- Independence. Independent agents represent a variety of different companies—not just one. They can evaluate and compare the products of several insurance companies to find the right combination of coverage and value for each individual client.
- Licensing by the state.
- Number and names of companies the agent represents.
- Number of years the agent and agency have been in business.
- The agent’s professional designations. For example, CPCU (Chartered Property and Casualty Underwriter) and CLU (Chartered Life Underwriter) are among the industry’s most rigorous and prestigious designations.
- Areas of specialization. Some agents and agencies have experience in specialized products, such as insurance for a restaurant, an IT consultant, or a home business.
- Recommendations and referrals. How did you hear about the agent and the agency? Did someone you trust refer you?
- Full-service capability. Is this a full-service agency for business, personal, health, and disability products?
- Service representatives. Who will handle your account for routine updates and transactions?
- Claims help. Ask if the agent plays a role in handling and tracking claims. Will the agent help resolve disputes that might arise with an insurance company?
- Policy review. Does the agency occasionally review and update policies to make sure your insurance is keeping pace with changes in your situation?
- Industry associations. Does your agent participate in any local, state, or national trade associations? These activities often signify professionalism and a commitment to continuing education in the insurance field.
What kind of relationship do you have with your agent? How do you feel about their services? How do you know you’re in the best position with your business insurance?
-JK
*Information supplied by the Independent Insurance Agents & Brokers of America and the ISU Group One Responsible Source™ program.
General Liability Insurance – Medical Expenses Coverage
As it has been established, general liability coverage is for situations where a third-party claims you or your business was negligent for bodily injury or property damage and sues for those damages. General liability protects your business against incidents that may occur on your premises or at other covered locations where you normally conduct business. When you look at the declarations pages on your commercial general liability policy, it looks like this:
| BUSINESS LIABILITY | LIMITS OF INSURANCE |
| LIABILITY AND MEDICAL EXPENSES | $1,000,000 |
| MEDICAL EXPENSES – ANY ONE PERSON | $10,000 |
| PERSONAL AND ADVERTISING INJURY | $1,000,000 |
| DAMAGES TO PREMISES RENTED TO YOU | $300,000 |
| PRODUCTS-COMPLETED OPERATIONS AGGREGATE | $2,000,000 |
| GENERAL AGGREGATE | $2,000,000 |
Business owners often wonder what the medical expenses coverage entails. They sometimes ask why this limit is so low in comparison to the other limits listed? “Medical expenses are costly, why only $10,000 limits here?” The answer to this question is, where liability coverage is for situations where a third-party claims your negligence for bodily injury or property damage, the medical payments coverage is an exception, as it pays medical expenses for bodily injury to third parties as a result of your operations regardless of fault.
People are less likely to sue you if they receive prompt medical payments to cover the costs of any injuries they have sustained for which they could claim your business or organization is liable. Medical Payments coverage gets the payments to them without their having to file a lawsuit or go to court and engage in a lengthy claims process. This coverage also allows your insurer to pay small nuisance claims without the need for costly legal expenses.
If there is a liability claim and medical expenses are paid, but a lawsuit still arises, general liability will still protect for a covered claim. The purpose of medical expense coverage, however, is to prevent this from happening.
-JK
About Me
I grew up in Fullerton, CA and graduated from Servite High School in Anaheim. I have my Bachelors degree from Loyola Marymount University in Los Angeles. I currently live in Tustin, CA.
Please contact me if you need help with any of the following lines of insurance for your business:
-Cyber / Data Breach
-Commercial Property
-Commercial General Liability
-Products Liability
-Workers Compensation
-Commercial Auto
-Umbrella/Excess Liability
-Errors & Omissions/ Professional Liability
-Employment Practices Liability
-Directors & Officers
-Life & Disability Insurance
Jimmy Kinmartin, CPCU 