Nasty Water Damage Loss; Insurance Claim
Upon returning to my office last Thursday morning after the July 4th “holiday”, we received a call from a client who returned to their office after the day off, only to find every square inch of their floor covered by 2-3 inches of water.
At first glance, they weren’t overly concerned about what they saw, but as they entered the building, they realized this was a severe loss for them. It turned out the sink in the break room had been building up pressure which caused the faucet head to shoot like a rocket across the room knocking a 5-inch wide hole through a wall and sprayed water like a fountain throughout the office for over a day.
The phones had been knocked out, employees couldn’t enter the building, and the entire office was under water. They needed help, fast.
We immediately called the claim in to the carrier and contacted a damage restoration company to get in there to begin cleaning up the mess. The restoration service company ended up spending the entire day Thursday sucking up the thousands of gallons of water.
On Friday morning, I visited my client’s premises to check it out and meet with the carrier claims adjuster, plumbers, contractors, and my client.
Here are some pictures of the damage:
The good news is insurance coverage is in place to help with this loss. Not only are the repairs being made, but there is business interruption coverage and the carrier found a temporary office to relocate our insured while their office is being repaired. In a conversation I had with our client, they told me they see the value of their insurance more now than they ever had. Unfortunately, there are many businesses out there who don’t see the value of carrying insurance, thinking issues like this will never happen to them. And when it does, they learn the hard way. With a six-figure loss like this, would your business survive without insurance?
Work at a Desk? Get Up and Move!!
Sitting in front of a computer all day, every day, can be harmful to your employees’ health. This is true even for employees who exercise routinely.
Employees who sit for hours at a time are more likely to have joint or bone pain and posture problems. Sitting all day also increases the risk for obesity, diabetes, stroke and heart disease. Further, the combination of sitting all day and poor ergonomics – the particular arrangement and design of an employee’s workstation – can reduce an employee’s energy level, alertness, and productivity.
Employees who find it difficult to find time for a lunchtime workout during their workday can increase mobility with simple movements such as stretching, turning, reaching and even fidgeting at regular intervals to improve their workplace health.
Human bodies were designed to move, so encourage employees to keep moving during the workday with these tips:
- Use the stairs.
- If you want to speak to a coworker, walk to his or her desk.
- When a coworker comes to your desk, take the opportunity to stand up and move.
- Place things that you regularly use on a shelf so that you have to stand up or stretch to reach them.
- Suggest standing or walking meetings.
- Review all your tasks to determine which ones you can do while standing.
- Take a brisk walk around your building during breaks.
- Walk briskly to and from your car if you do errands on breaks.
While employees are seated, it is important to stretch often to ease tension and strain in joints and muscles. Here are a few desk exercises to improve employees’ health and wellness:
- Slowly shrug your shoulders to your ears while breathing deeply.
- Clench your fists and stretch your arms out in front of you while drawing circles in the air going both directions.
- Give yourself a bear hug and breath in and out for 15 seconds.
- Do leg extensions.
- Gently stretch your neck muscles by dropping your chin to each shoulder and then front and back.
Consider these additional low-cost options for employees to increase their health and wellness:
- Offer healthy foods in the cafeteria and vending machines.
- Invite the Red Cross, American Heart Association, American Cancer Society and other organizations to conduct educational workshops at your facility.
- Offer flextime for employees who want to exercise at lunch.
- Provide educational information to employees by distributing free brochures and health and wellness newsletters.
- Add bike racks to the parking area.
- Work with a local facility to provide free health screenings.
- Provide reimbursement for memberships to off-site exercise facilities.
Source: Travelers Insurance, BlueCross BlueShield of Oklahoma
10 Good Questions To Ask About Business Auto Insurance
On any given workday, you may have employees on the road operating a variety of vehicles. Whether you provide company vehicles or your employees use their own vehicles, commercial auto insurance is a must.
Commercial/ business auto insurance provides coverage for cars, trucks and vans used by you or your employees for business purposes. Your business vehicles are not covered by your businessowners policy or personal auto insurance, so you must buy a separate policy.
When shopping for the right coverage for your business, here are ten good questions to ask about business auto insurance:
1. Is coverage mandatory for a business that uses vehicles?
Yes. Just like with personal auto insurance, it’s against the law to drive a vehicle without insurance to cover injuries or damage to others that an employee causes as a result of a car accident.
2. Is Business Auto Insurance better than Personal Insurance?
Business Auto coverage is similar to the coverage you may carry on your personal auto policy; however, business auto exposures can be more complex requiring specialty coverages to be considered based on individual business needs.
3. How do I find out about what’s out there?
The most effective way to compare rates and coverage available to you is through an independent agent or broker. They should be able to point you to the right type of policy based on the type of business you have and how you use your vehicles.
4. What can I do to influence the premium I pay?
The best ways to keep rates down is to make sure that you’re a safe driver, hire and employ safe drivers and use less expensive vehicles for your business.
5. What factors impact the premium I pay for Business Auto Insurance?
Insurance premiums can be affected by everything from the type of business you operate, to the type of vehicles you own; to the radius you operate your business in, and the driving records of yourself and your employees.
6. What is the reputation of the insurance company?
Make sure you do the research before moving forward with a Business Auto policy. Ask your insurance representative or go online to answer questions like — Do they have a long history? Are they reputable? Do they know your business?
7. What extra benefits are added onto the policy without additional cost?
Every insurance company is different. So make sure to ask about extra benefits when shopping around, because they could prove useful when an accident happens and save you money in the long run.
8. Does coverage vary state to state?
It definitely can. Each state has its own rules and regulations that can affect rates and types of coverage that an insurance carrier can make available to your business.
9. Are all my employees covered by my Business Insurance policy?
They should be, but there are exceptions. This is a very important question to ask when you’re shopping around for the best Business Auto policy.
10. How does the claims process work?
The process usually includes reporting an accident to both the police and your insurance company, assessing the damage, and working with a claims handler. When selecting an insurance carrier, be sure to ask about any benefits they offer in the event of an accident, like a network of repair shops where the work is guaranteed as long as the vehicle is leased or owned.
Source: The Hartford
The Workers Compensation Insurance Market Can Be Cruel
The workers compensation insurance market can be a really cruel beast. Take for example a client of ours with a pretty sizable payroll (and big premium account) whose workers compensation insurance policy is renewing this month. They hadn’t sustained a work related injury in almost ten years which is a feat in itself considering the risky work they do as seismic retrofitters of unreinforced buildings.
After almost ten years with a clean workers compensation loss history, this client experienced two unexpected employee injuries this year with over $100,000 in claims paid for injuries and disability. This $100k is only a fraction of the premium this client has paid for their workers compensation insurance over the last ten years. However, the current carrier is non-renewing their policy and most other carriers are declining to quote. Funny thing is, these same carriers were begging for a chance to write their renewal in years past. In either case, this is how the workers compensation insurance market works sometimes as harsh as it can be.
Although it’s impossible to completely eliminate employee injuries, there are steps you can take as an employer to help minimize the frequency and severity of injuries:
7 Steps To Manage Workers Compensation Costs
1. Hire responsibly. Employers should take time to find the right employees for the workplace and use tools like employment applications, reference checks, pre-hire drug screens, motor vehicle driving history and background checks.
2. Establish a safety program. Develop policies, procedures and rules. Provide employees with the necessary training, proper tools and personal protective equipment to do their job safely.
3. Enforce safety rules. It is not enough to train employees and provide them with the proper tools. Businesses should routinely remind employees to work safely through the use of workplace audits, safety meetings, toolbox talks and annual training.
4. Provide immediate medical care. Pre-arrange medical facilities for employees in the event of a workplace injury. Be prepared to provide transportation for nonemergency injuries. For emergencies, call 911. Always require a post-accident drug test to be administered.
5. Report all injuries immediately. All injuries should be reported to the insurance carrier within 24 hours of the incident. Ongoing communication with the injured employee and the claims adjuster is extremely important in order to better manage the claim.
6. Investigate all accidents and near misses. Businesses should review accidents to assess what happened and take necessary steps to make sure it does not occur again.
7. Provide transitional modified jobs. Once an employee is released to return to work, businesses should be prepared to offer alternate duty if the employee is not currently able to perform duties required by their position.
These steps don’t have to be taken alone. Talk to your broker or carrier about the resources available to help your business mitigate risk.
–JK
What If I Have Trouble Finding Insurance for My Business?
In most cases businesses can obtain insurance in the standard insurance market with the help of a licensed and qualified insurance broker. However, if your business has experienced significant losses, your business is considered to be engaged in high-risk operations (with a greater chance of claims frequency or severity), or you have recently started your business, you may not be able to locate insurance in the standard commercial insurance market. You do have options, however, in securing commercial insurance elsewhere.
Surplus Lines Insurance
When an insurance broker is marketing your insurance coverage and has had applications declined from three licensed commercial insurance carriers, they can proceed to obtain insurance from the “surplus lines market.” Sometimes referred to as the “non-admitted” market, surplus line companies offer insurance to businesses that cannot obtain insurance in the standard insurance market. While these companies are not licensed by the California Department of Insurance (CDI), they do have to go through an approval process that includes providing evidence of minimum capital and other strict requirements. When these requirements have been met to the CDI’s satisfaction, the CDI may approve the company to conduct business in California and add them to the List of Approved Surplus Line Insurers.
A surplus line company can only be accessed through a specially licensed broker, also referred to as a wholesaler. The broker must have a surplus line license issued by the CDI in order to sell surplus line insurance. Before purchasing insurance from a surplus line insurance company, your insurance broker must provide you with a disclosure that the insurance you are buying is being issued from a surplus line company.
Although surplus line insurers must follow the Fair Claims Settlement Practices Regulations (regulations that govern how insurers handle claims), the CDI has limited jurisdiction over the operation of surplus line insurers. If the carrier becomes insolvent (goes bankrupt), your only course of action will be through the courts. The California Insurance Guarantee Association (CIGA), which protects claims with admitted insurers, does not apply to surplus line insurers. All insurance brokers should be able to supply information on the financial solvency of any surplus line company that it represents. There are independent rating organizations that analyze insurance company solvency such as A.M. Best Company.
Most states identify the standard lines insurance companies as “admitted,” “licensed” or “standard” and the excess and surplus lines insurance companies as “non-admitted,” “unlicensed” or “non-standard.” However, these terms tend to reflect a negative connotation in regards to the strength and security of a surplus lines insurer. The fact of the matter is, most states require surplus lines insurance companies to maintain higher minimum capital levels than they require admitted markets to carry. Just because a carrier isn’t licensed or admitted in the state of CA, don’t assume they’re inferior. Plenty of established businesses secure their insurance coverage through the surplus lines insurance market.
It’s safe to assume a ladder manufacturer secures their insurance from a surplus lines insurance carrier:
–JK
Text Messaging Guy Almost Runs Into A Bear
We talk about text messaging while driving, what about text messaging while walking?? This guy BEARly got away from this one. You think he was updating Facebook….”wheres this bear everyone been spotting?”
Keep your eyes open and pay attention to what you’re doing people! Not only while you’re driving either.
–JK
Hail Damage Photo – McAllen, TX
Take a look at this incredible shot of some hail damage at a Starbucks store that occurred in McAllen Texas last night. This picture came from the National Weather Association.
Windstorm or hail damage is a covered cause of loss on a property insurance policy. Here in California, I can’t imagine ever seeing hail as severe as this, but the picture was incredible enough to share.
–JK
Do I Include Tips In My Payroll For Workers Compensation Insurance?
Man, I haven’t posted anything new for way too long, mostly because I have been devoting a lot of time to studying for my next CPCU test…..”Accounting and Finance for Insurance Professionals.” Does anything sound more dry and boring than that?? Accounting/finance/insurance…….sounds worse than influenza/ the DMV/ or paying bills. Oh well, I am learning a lot.
Anyways, someone asked me a good question today. This came from a salon owner, “Do I include tips in my payroll estimate (for workers compensation insurance)? The answer to this question is NO, do not include tips. Tips and severance pay are to be disregarded in developing payroll with one exception: sums for accrued vacations, sick pay, commissions, and bonuses included in severance pay shall be included.
One the same note, with regards to overtime, only straight time is used in the premium calculation for workers compensation insurance. In other words, all hours worked are considered but only at straight-time rates. Premium rates for pay of overtime are disregarded. However, payroll records must be kept which show these details.
Bonuses are considered as regular compensation and used in developing payrolls.
Premium pay for working certain hours on the clock, such as swing shift or night shift work, is used in developing payrolls.
–JK
Source: Merritt Manual
Drunk Beer Pong Guy Tries To Sue Bar After Getting Hit By Car
Add this one to the list of frivolous lawsuits, a New Jersey man filed a lawsuit against at New York bar called Wicked Willy’s over injuries he suffered following a 3 1/2 beer pong game. The man was struck by a car going 50-mph while trying to cross a highway in New Jersey after leaving the bar.
According to the man’s lawyer, he suffered numerous injuries, including a broken hip, leg and foot, tears in both his knees, and a lacerated liver. When the man’s blood was checked at the hospital four hours after the accident, his blood alcohol content was .26, which is almost four times higher than the legal driving limit.
The man claimed the bar should have been monitoring the game to make sure players weren’t getting visibly drunk, however, a New York judge has thrown out the lawsuit against the pub. The judge ruled the man voluntarily signed up for the beer-drinking game and couldn’t sue Wicked Willy as a result. The judge said the man “consumed alcohol to the point of diminished capacity.”
The New York Post says his lawyer will ask the judge to reconsider the ruling.
This is a reminder that if you sell or serve liquor in any capacity, you need to carry liquor liability coverage, not only for legitimate lawsuits, but for frivolous claims which may need to be defended in the court of law. Hiring attorney’s isn’t cheap.
For more details on the story, see this article from the New York Post
–JK
1985 Product Liability Insurance
I’ve been in the insurance industry just short of five years now helping business owners with their insurance needs. If I could turn back the clock 27 years, it would be a dream for me to write product liability insurance for this awesome product, the music vest. Treat your eyes to this gem:
–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 