All posts tagged Wright & Kimbrough Insurance

Creating a Strong Safety Program for Your Fleet Drivers

freight services. commercial delivery vans in row at transporting carrier shipping service company parking

While most operations with an automotive or trucking fleet focus on safety, few businesses are actually monitoring their drivers to make sure they are adhering to the company’s rules, a new study has found.

Many companies only pull reports on their drivers’ records on an annual basis, which means they miss important developments like a DUI or a few moving violations that will increase the cost of insuring them.

In fact, 70% of companies with fleets do not even monitor their drivers and 60% don’t have a safety program in place, according to the study by SambaSafety, a firm that provides background screening and driver safety records for companies.

The key to having a successful driver safety program in place requires management buy-in and a company-wide culture focused on safety that encompasses not only a company’s fleet drivers, but also anybody in the operation that may drive their personal vehicles on occasional company business.

SambaSafety recommends:

Motivating staff to be safer – The company advises against just issuing warnings like “slow down” and “put away the phone,” and instead focusing on what’s at stake if they don’t. Instead of numbers and checklists, make a presentation that lets them think in terms of their well-being, or even loss of life, for the best response.

Providing strong safety leadership – Creating a safety culture requires leadership to model the behaviors that all employees should adopt.

Not just focusing on fleet drivers – Any employees that use their vehicles for work must also be part of the training and they should know that you expect the same safe behavior of anybody you employ that drives.

Drive home the point that an employer can be responsible for anything that happens when employees are conducting company business, even if they are running to the office supply store for you.

Being consistent – Just because you have a safety policy, it may not be enough to get you off the hook if one of your drivers causes an accident. Companies can be held responsible if they do not have proactive intervention policies and detailed documentation.

Using data to your advantage — Collecting data on your employees’ driving habits can greatly improve your ability to make sure you have a safe fleet of drivers. And the best way to do that is through continuous driver monitoring.

“The right data can help employers accurately reward those who are doing well, too, and securely keep up with disciplinary actions toward those who are missing the mark,” SambaSafety says in its report.
Do you have a strong safety policy for your drivers? The company recommends that you ask the following of your safety program:

  • Was the policy established with input from key stakeholders?
  • Has it been clearly communicated to all employees?
  • Does it tie in to company goals and mission?
  • Do employees receive regular reminders and updates about safety policies?
  • Is it aspirational and values-based rather than simply disciplinary?
  • Is there complete buy-in from top management?
  • Is the policy uniformly enforced?
  • Is there a fair, diverse, professional board for incident review?
  • Is data properly used to increase compliance?
  • Is it time for an update?

Silica Safety Enforcement Delayed for Construction Industry

Stonecutter's Workshop

Cal/OSHA has delayed enforcement of its crystalline silica safety standard for the construction industry for another three months to ensure the California rules are in synch with federal rules on the dangerous airborne matter.

The move came after Fed OSHA announced April 6 a delay in adoption of the crystalline silica standard for the sector “to conduct additional outreach and provide educational materials and guidance for employers.”

The silica rules have already been in effect for general industry since 2016 and the delay in enforcement is only for the construction industry. Enforcement for the construction sector was slated to start June 23, but that’s been changed to Sept. 23 under the new order.

Under the new silica standard, the permissible exposure limit is 50 micrograms per cubic meter of air, compared to the old standard of 100.

The California standard is similar to the federal standard, which the industry is challenging in a federal lawsuit. One outfit, the American Chemistry Council, wrote to the Cal/OSHA standards board that the 50 micrograms level is unnecessary and that the current standard, in place since 1971, has markedly reduced the cases of silicosis.

Industry has complained that the cost of complying with the new standard for employers nationwide will be about $6 billion, although Fed-OSHA says it will cost $371 million for employers to fall in line.

The sticking point for the federal construction silica rule is that it requires wet cutting of silica-containing materials to reduce the chances of particles in the air.

The California rules allow for wet cutting and dry cutting with vacuum saws that suck in the particles before they escape into the air. Contractors would rather cut dry rather than wet.

Fed-OSHA’s requirements were also scheduled to take effect on June 23, but the agency announced that implementation would be delayed by three months to give industry a chance to provide data showing that dry vacuum cutting is just as safe in reducing crystalline silica dust as wet cutting.

While Cal/OSHA’s move only delays enforcement, the silica rule is already on the books and employers should comply with it.

All construction employers covered by the standard are required to:

  • Establish and implement a written exposure control plan that identifies tasks that involve exposure and methods used to protect workers, including procedures to restrict access to work areas where high exposures may occur.
  • Designate a competent person to implement the written exposure control plan.
  • Restrict housekeeping practices that expose workers to silica where feasible alternatives are available.
  • Offer medical exams – including chest X-rays and lung function tests – every three years for workers who are required by the standard to wear a respirator for 30 or more days per year.
  • Train workers on work operations that result in silica exposure and ways to limit exposure.
  • Keep records of workers’ silica exposure and medical exams.

 

If you have not started complying, you should get your new safety protocols in place now. You have an additional three months to do so.

 

Insurance Commissioner Okays Benchmark Rate Decrease for California Employers

Stock market background design

California’s insurance commissioner has approved a recommendation to reduce average baseline rates on workers’ compensation policies by 7.8% at the mid-year mark.

The mid-year reduction to the baseline rate is largely the result of reforms that were introduced in 2013 that have sped up the settlement process for claims (including many long-term claims), in addition to reducing medical costs.

Also, because of these reforms the cost of adjusting workers’ comp claims in California has dropped over the past few years.

Insurance carriers use the benchmark rate – also known as the pure premium rate – as a starting point for pricing their policies.

The benchmark rate is an average across all industries and employers may or may not see decreases in their workers’ comp premium come renewal as many other factors are at play, not the least of which is the employer’s own safety history.

Insurers are free to price their policies as they wish under California insurance law.

Region is also important and insurers are pricing policies for Southern California employers higher than for the rest of the state due to the continuing problem of cumulative trauma claims being filed by workers post-termination, mostly in the greater Los Angeles area.

“Cumulative injury claims often involve multiple injuries [that have developed over time], are very frequently litigated, are filed disproportionately in the Los Angeles Basin and often are filed on a post-termination basis,” the Workers’ Compensation Insurance Rating Bureau stated in a report on the state of the market as of Dec. 31, 2016.

Indeed, while cumulative trauma claims accounted for just 8% of all claims in 2005, in 2015 they comprised 18% of all claims, according to the Bureau.

The state insurance commissioner sets the benchmark rate with guidance from the Rating Bureau, which recommended a 7.8% rise to him in April.

The approved rate is 7.8% less than the pure premium rate for policies incepting on or after Jan. 1, 2017. The average advisory pure premium rate starting July 1 will be $2.02 per $100 of payroll. That’s compared with $2.19 per $100 of payroll as of Jan. 1.

The pure premium rate is a reflection of an overall decline in the total cost of claims thanks to SB 869, the legislation that was signed into law in 2013.

By addressing numerous cost drivers it has helped reduce medical costs, expedite claims settlements, and reduced the frequency of workers’ compensation claims. The legislation also increased benefits for some injured workers.

As a result, the average projected ultimate cost of a claim increased to $82,234 at the end of 2016, compared to $74,699 in 2013.

Court Decision Shows Extent of Employer Liability for Traveling Employees

Frying Egg Roll

The employer of a worker who causes damage during their off hours on a business trip may be held liable for them acting “in the scope of their employment,” according to a federal court decision.

The ruling will allow the case to go forward after the court declined to uphold the employer’s motion to dismiss it as a defendant in the lawsuit after its employee had caused $147,000 in damage to a hotel room while on a business trip. The employee fell asleep while frying egg rolls on the stovetop in his room, after which a fire broke out.

The case illustrates the importance of having policies in place for traveling workers in order to reduce your company’s liability when they are on a trip on your behalf.

Lloyd’s of London paid for the original damage but later sued the worker and his employer, FlightSafety International Inc., to collect the damages. Lloyd’s says that by virtue of the fact that he was on a business trip, the man was acting within the scope of his employment when he started the fire.

Hence, FlightSafety is also liable for the damages to the Residence Inn in Wichita, Kansas.

In making its case, Lloyd’s said that FlightSafety had a contract for its employees to stay with the hotel chain. “The entire purpose of defendant Foster’s trip was business on behalf of defendant FlightSafety,” Lloyd’s wrote in its complaint.

The court said that it was not yet clear if the worker was acting outside the scope of his employment and that that fact needs to be tried at the trial court level.

The decision sends the case back to the trial court for hearing.

 

<B>The takeaway</b>

It’s quite common for employees to engage in risky behavior when on business trips. On Call International in a 2015 survey of 1,000 business travelers found that:

  • 27% of respondents admitted to binge drinking while on work-related trips, and
  • 11% said they had picked up a stranger at a bar while traveling for their jobs.

 

With these findings in mind and in light of this decision, employers should keep in mind that other courts have also found them liable when their workers are driving during their off hours while on a business trip, say going out to dinner on their own.

While responsibility ultimately falls on the business traveler to act in a responsible and safe manner, employers should establish appropriate parameters and rules and be clear about the expectations it has of its employees while they are out representing the organization.

What the Latest Version of the AHCA Would Mean for Employers

Magazine with article about Repeal Healthcare with magnifying glass. Concept. +all text written by photographer and is copyright free+

The American Health Care Act that was passed by the House of Representatives by a small margin would repeal the employer mandate and the reporting requirements that the Affordable Care Act ushered in.

While Senate Republicans are likely to start from scratch and hammer out their own ACA replacement, for now, the only legislation in play is the controversial AHCA.

So, what’s in it for employers?

 

Eliminates the employer mandate – The ACA mandate requires that employers with 50 or more full-time or full-time-equivalent workers provide health insurance for their staff. The AHCA eliminates this requirement. This will likely not have a significant impact on a large number of organizations since they offer benefits to better compete for talent.

 

Delays the “Cadillac tax” again – Congress has already voted once to delay the implementation of an annual 40% excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family. The tax is slated to take effect in 2020, but the AHCA delays that to 2026. While the tax is supposed to be paid by insurers, it’s anticipated that they would pass it on to employers.

 

Changes tack on essential benefits – The ACA also requires that all health plans provide 10 essential benefits, including doctors’ services, inpatient and outpatient hospital care, and prescription drug coverage. The AHCA would allow states to have the final say in what health insurance plans should include.

That said, the bill would seem to allow national employers to opt out of essential benefits and offer stripped down plans that would likely be less expensive for employers and their covered workers, but also offer fewer benefits.

 

Expands health savings accounts

The measure would also greatly increase the amount of cash an individual can set aside pre-tax into their HSA. The current maximum an individual can put into an HSA is $3,400, but under the AHCA that would be increased to $6,550. For families, the HSA maximum would jump to $13,100 from the current $6,550.

The AHCA removes the cap on flexible savings accounts as well, which was set at $2,600 under the ACA.

These two changes would benefit employees who take advantage of these health care savings vehicles.

 

The takeaway
The AHCA does much more than the above, but most of the rest of the legislation is really geared toward the individual market and also tries to deal with the issue of pre-existing conditions.

The AHCA would also:

  • Eliminate the tax penalty for individuals who fail to secure coverage.
  • End funding for Medicaid expansion.
  • Replace the ACA’s cost-sharing subsidies, which are based mostly on consumers’ incomes and premium costs, with tax credits that increase for older individuals.
  • Repeal taxes on the wealthy, insurers, and drug and medical device makers.

 

To be clear, this legislation is not the end game. House Republicans were able to pass the legislation by a razor-thin margin after much wrangling, a feat that will be difficult to repeat in the Senate.

Also, it seems likely that Senate Republicans will start from scratch with their own legislation and that the AHCA may never see the light of day in the Senate.

Political stakes are also higher for senators and the GOP holds a slight 52-48 majority in the upper house. It would only take a few defectors to sink any attempt at repealing the ACA.

 

Getting Buy-in from Managers on Workplace Safety Programs

Inspections at commercial transport dock

One of the keys to instituting a good safety program is to get management and supervisor buy-in.

You need their support and belief in the system if you are to convince your employees to embrace your safety regimen. If your managers don’t believe in the safety plans you have put together, it will show through when they try to sell them to your staff.

If you don’t have buy-in from your managers, the chances are slim to none that your employees will embrace the changes you are proposing. Managers play a crucial role in getting employees on board with safety.

If you are serious about preventing injuries and want to keep your workers’ comp X-Mod low, the role of your management team is crucial.

You will often encounter a few different personality types among your managers and they need to be convinced of the importance of workplace safety in different ways.

  • The excuse-makers: They are the ones that blame external factors that are out of their control for safety lapses, and they may pooh-pooh the harm that a high X-Mod has. They may talk the talk on safety, but they don’t walk the walk.
  • Half-hearted bosses: These managers may actually buy into the safety program, but they are unable to show their commitment in ways that make an impression on the rank and file.
  • Committed: These managers are fully committed and enthusiastically embrace your safety plans and discuss them with staff with exuberance.

 

You’ll need a different approach with each personality type to get them to embrace the concept. Once they do, they can effectively convey the urgency and importance of workplace safety to the rank and file.

Constructor Magazine recently had these recommendations for getting management buy-in:

Select the right leaders – Choose managers who are firm, yet fair with a passion for the safety of the workforce. They should have a track record of success so that they can be an inspiration to their teams. Also, they should not be afraid to get their hands dirty to make a point or demonstrate how something is done.

 

Talk about risk management holistically – Every facet of your operation needs to be addressed if you want a comprehensive global risk management culture to exist.

Executives can influence this by extending discussions of risk management beyond the worksite to help managers see the bigger picture of why safety matters.

Assessing the risk associated with every task, purchase order, estimate or piece of equipment used will reinforce the notion that risk management is a company-wide function and not only in the sphere that the manager is responsible for.

 

Make periodic site visits – Top leadership should make a point to get on the floor and visit various departments to watch the workflow and reinforce the importance of safety to the workers. They should make these visits with the manager who has been put in charge of safety for that department.

At the same time, they should not arrive and start nitpicking and being enforcers of safety policy. Instead, their role should be to start conversations with the workers about safety challenges and asking for advice and ideas to make the operation safer.

They can use these visits to also celebrate successes and challenge the team to do better and always look for issues that could lead to injuries.

Employee Texting Blows Holes in Your Company Communications Policy

Mature businessman with his younger team using smart phones and digital tablet inside modern office building.

If you are not aware, your employees are most likely communicating with each other and clients using texting or instant messaging.

While the immediacy of texting and instant messaging is great for business as it allows faster communications, better collaboration and more responsiveness, the downside is that your organization likely can’t track and retrieve those communications.

It becomes even harder if the communications are via instant messaging apps like Whatsapp! and Facebook’s Messenger.

As an employer, it’s important that you understand the issue and that you have clear rules for communications among employees in order to protect your company’s interests.

You’ll need a policy in place when something goes wrong and you need to track the thread of communications to see what was said or promised by whom, and when. These details can be crucial to resolving problems with clients, or if you are ever sued and your communications are subpoenaed for discovery.

Plaintiff-side lawyers in employment cases are already started demanding the production of text messages and e-mails during discovery. And if litigation ensues on an issue, you may have a duty to preserve text messages.

 

Roadblocks

There are a few issues that you need to consider, especially in light of the fact that many companies are allowing staff to use their own devices for company communications, including giving them access to the business’s e-mail system on their phone.

If your employees are exchanging texts and instant messages on company phones, the history of communications would be preserved and you would be able to access the content by asking for the phone.

But, if your employees are sending and receiving work texts and instant messages on their personal devices, the issue gets murkier, particularly if you don’t have a bring-your-own-device (BYOD) policy. Accessing messages about company business on an employee’s smartphone may raise privacy issues.

The problem especially arises in the case of wrongdoing by an employee. If they are using their phones for communications that could provide insight into their behavior, they can erase those messages before you ask to see them.

In other words, you cannot rifle through their phone without first obtaining it, meaning you can’t look at it without them knowing as you could if you looked at their e-mail on your company server.

There are also privacy issues that arise if you are trying to access an employee’s personal phone to view texts and messages.

The big issue is: how do you capture those communications? After all, it will not be done over your network, unlike your company’s e-mail system that preserves all communications which are available to you. The messages reside on the phone instead.

 

What you should do

Obviously texting and instant messaging are a potential minefield for employers who want to be able to access all company communications among employees and between your staff and clients, vendors or partner organizations.

To ensure you have a handle on it, you should set rules outlining what method of communication employees may use for business purposes.

If you don’t want texting or instant messaging of any kind for company business, that needs to be spelled out – including ramifications for breaking the rule.

If you decide to allow texting and instant messaging, your policy should be clear on what kind of communications are okay.

You will need to amend your policy related to employee communications and record retention to make sure texts and instant messages are included.

If you have a BYOD policy, at a minimum it should include allowing you to take custody of the employee’s phone for legitimate purposes like a dispute with a client, or discovery for litigation.

As you can see, it’s important that you initiate a policy on employee communications that takes into account texting and messaging.

If you haven’t done so, you should do it now as this faster method of communication is becoming the new normal, particular as Generation Y continues filtering into the workforce.

 

Rating Bureau Recommends Benchmark Rate Decrease for California Employers

abacus chinese

IN A SURPISE move, the Workers’ Compensation Insurance Rating Bureau of California has filed a recommendation to reduce average baseline rates on policies by 7.8% at the mid-year mark.

The mid-year reduction to the baseline rate is largely the result of reforms that were introduced in 2013 that have sped up the settlement process for claims (including many long-term claims), in addition to reducing medical costs.

Also, because of these reforms the cost of adjusting workers’ comp claims in California has dropped over the past few years.

Insurance carriers use the benchmark rate – also known as the pure premium rate – as a starting point for pricing their policies.

The benchmark rate is an average across all industries and employers may or may not see decreases in their workers’ comp premium come renewal as many other factors are at play, not the least of which is the employer’s own safety history.

Region is also important and insurers are pricing policies for Southern California employers higher than for the rest of the state due to the continuing problem of cumulative trauma claims being filed by workers post-termination, mostly in the greater Los Angeles area.

“Cumulative injury claims often involve multiple injuries [that have developed over time], are very frequently litigated, are filed disproportionately in the Los Angeles Basin and often are filed on a post-termination basis,” the Rating Bureau stated in a report on the state of the market as of Dec. 31, 2016.

Indeed, while cumulative trauma claims accounted for just 8% of all claims in 2005, in 2015 they comprised 18% of all claims, according to the Bureau.

The state insurance commissioner sets the benchmark rate with guidance from the Rating Bureau. A hearing will be held in June, after which the commissioner can choose to approve the rate filing, reject it or set another rate that’s either higher or lower than that recommended by the Bureau.

The rate filing is 7.8% less than the approved pure premium rate for policies incepting on or after Jan. 1, 2017. It recommends an average advisory pure premium rate of $2.02 per $100 of payroll. That’s compared with $2.19 per $100 of payroll as of Jan. 1.

The pure premium rate is a reflection of an overall decline in the total cost of claims thanks to SB 869, legislation that was signed into law in 2013.

By addressing numerous cost drivers it has helped reduce medical costs, expedite claims settlements, and reduced the frequency of workers’ compensation claims. The legislation also increased benefits for some injured workers.

As a result, the average projected ultimate cost of a claim increased to $82,234 at the end of 2016, compared to $74,699 in 2013.

Rising average payouts for wage losses and medical costs per claim are both contributing to average claim cost increases, according to Rating Bureau data.

Companies Struggle with Benefits Compliance

More and more employers are being overwhelmed by all of the compliance requirements associated with managing employee benefits.

The Guardian Life Insurance Company of America’s “Benefits Balancing Act” study found that 60% of employers are feeling overwhelmed with the increased complexity of managing their benefits programs. One of the main reasons for the additional burden is the Affordable Care Act, with its myriad of compliance and reporting requirements.

The employer mandate and the documentation and new filing requirements with the IRS are high on the list of compliance issues, as are evolving Family Medical Leave Act (FMLA) and ERISA requirements.

Interestingly, larger firms with 100 or more employees are having the hardest time, with 70% saying they are especially challenged by installing new coverages, changing carriers and employee communications and enrollment.

The shackles of compliance are so great that it’s the number one benefits-related concern for nearly 30 % of employers, the study found. In fact, 70% said that their firms are not equipped to keep up with the steady changes in federal and state laws governing employee benefits.

The top areas of compliance concern are:

  • The ACA excise tax (“Cadillac tax”)
  • Changes to paid parental leave laws
  • ACA employer mandate
  • ERISA requirements
  • State and local FMLA requirements

 

In terms of administration the top concerns are:

  • Employee communications and education
  • Adding new benefits or changing plans and insurers
  • Establishing electronic data interchanges
  • Account management and service delivery
  • Claims and employee customer service
  • Enrolling employees

 

What companies are doing

As the regulatory landscape has shifted so dramatically over the last seven years, many employers have opted for outsourcing their benefits compliance.

This may be an especially smart move for smaller employers, which often do not have in-house benefits administration resources.

 

Among employers outsourcing at least some benefits activities, the study found that:

  • 50% use the services of a broker
  • 25% use an insurance company
  • 25% use a third-party vendor (enrollment firm, HR services firm or a private exchange)

Venturing Abroad? Your Liability Policy May Not Cover You

travelers

There may be the occasion when you have to send executives or a team overseas for work. And depending on the destination, the risks will vary – more in some countries and less in others.

Other factors that come into play include the number and age of your staff working overseas and what type of activities they will engage in when they are on their work assignment.

First off, your current liability insurance may cover the basics if your staff are there on a short-term assignment. For example, if one of them injures someone while driving a car in the country, your liability policy would likely cover the damages.

But if you are selling your service and products there of if you have a representative office there, you may need the enhanced coverage of a foreign liability insurance policy.

According to International Risk Management Institute, foreign liability insurance is:

“A specialty policy for an insured’s liability for foreign operations arising out of a permanent branch office, manufacturing facility, or other operation located in another country. The commercial general liability (CGL) policy provides coverage for incidental exposures – for example, when an executive (or group of employees)… occasionally travels overseas for business trips. For permanent operations in foreign countries, a separate foreign liability policy is required.”

 

Why purchase foreign general liability coverage

Your existing corporate liability plan may not cover you for legal expenses and lawsuits brought in overseas courts. Travel to foreign countries brings with it a number of challenges, including corrupt officials, crime, and unfamiliar laws, languages and customs.

Organizations from the U.S. have no protection if they are taken to international court, so protect yours with a good foreign liability plan.

 

 

Who needs the coverage?

You may want to consider foreign liability insurance if you:

  • Have employees or volunteers who travel outside the U.S.
  • Own or lease vehicles outside the U.S./Canada.
  • Export goods or services.
  • Have or transport property outside the U.S. or Canada, including at foreign trade shows.
  • Outsource work to subcontractors who are domiciled outside the U.S. and Canada.
  • Own or operate locations, such as sales offices or call centers, outside the U.S. and Canada.
  • Station American workers at foreign offices and/or employ third-country or local nationals.

 

What is covered in a foreign liability policy?

Such policies provide coverage for:

  • Legal expenses for lawsuits brought against your organization in overseas courts.
  • Criminal charges brought against your staff by foreign officials.
  • General liability brought against your company for injuries or damages resulting from the use of your product or service.
  • Emergency assistance services.
  • Automobile liability.
  • Directors & officers liability.
  • Accident and health.
  • Fiduciary liability.
  • Excess liability.
  • Professional errors and omissions liability.
  • Environmental impairment liability.
  • Aircraft/watercraft liability.
  • Patent infringement.