Gaslamp Insurance has access to a new program of insurance designed specifically for Vacant Property and Vacant Land. Some highlights are:

• General liability limits: Up to $1,000,000 per occurrence and $2,000,000 aggregate
• Property coverage: Up to $2,000,000 total insured value at any one location
• Terms: 3, 6, & 12-month terms available
• Buildings: Vacant residential and commercial buildings are eligible, as are buildings under renovation
• Land: Vacant land is eligible

Project-Specific Program

Another new program to help you obtain coverage for those short-term projects, is the Project-Specific program. Some highlights include:

• General liability limits: Limits of $100,000, $300,000, $500,000, and $1,000,000 available
• Target trades: Individual trades working on projects sporadically or as a side-business
  • Most Artisan Trades
  • General Contractors (remodel of residential & commercial)
• Short-term coverage available: This coverage ranges from a few days to a maximum of 90 days. A one-time extension of 30 days is available to bring the project maximum to 120 days. If you need a longer term, your Gaslamp Agent has access to other programs to handle that as well
• Available in all 50 states
• Qualifications needed:
  • Minimum of 1 year in the specific construction trade
  • An active contractor license, if required by your state for that trade
  • Maximum of 5 employees
  • Maximum of 4 trades
  • Maximum project size of $250,000
• Quick access and rapid approval, if eligible:
  • Apply, pay, and print

For more information go to: www.GaslampGO.com
Call your Gaslamp agent or e-mail us at: Info@GaslampGO.com

Coverage Question

Even businesses that own fleets of autos sometimes use vehicles that do not belong to them. Often, a business asks an employee to run an errand or visit a customer or vendor using that employee’s car.The organization may become legally liable for anything an employee acting on its behalf does while behind the wheel. Lawsuits and accompanying legal costs may confront the business if they have an accident. Many business automobile insurance policies cover this situation, but they do not do so automatically.The standard Insurance Services Office Business Auto Policy uses numbered symbols to identify covered autos for each coverage the business has purchased. The policy provides liability coverage for non-owned autos only if symbols 1 or 9 are shown on the information page.

Symbol 1 – Means “Any auto.”
Symbol 9 – Means “Non-owned autos.”

The policy defines non-owned autos as autos the insured business does not own, lease, hire, rent or borrow and that are used in the business.

Coverage applies only if the vehicle is used in the business or in the policyholder’s personal affairs.

To illustrate, assume that a printing company needs an emergency replacement part that broke on one of its presses. One of the workers drives his personal vehicle to a parts warehouse 30 miles away. On his way back with the part, he collides with another car.

If the repair shop’s auto insurance policy’s information page has either symbol 1 or 9 for liability coverage, it will cover this accident.

It will pay for the shop’s legal defense costs and any resulting damages the shop is liable for, up to the amount of insurance purchased.

If the policy has another symbol, it will not cover an accident resulting from the use of the mechanic’s car.

Many types of businesses allow employees or partners to use their own vehicles for work purposes. Some examples:

• Restaurants that deliver.
• Businesses that do not provide company cars for salespersons.
• Architects, attorneys, engineers and other professionals who make site visits.
• Any organization that sends employees to offsite meetings, errands or professional conferences.
• Contractors who borrow trucks on job sites or who send employees to get tools.
• Any organization that sends employees to the bank or post office.

It is possible that the employee’s personal auto insurance policy may provide some coverage for you in case of an accident. But you should not assume that this is guaranteed.

Also, many individuals purchase the minimum amounts of insurance required by state law, so any coverage you share with the employee may be used up quickly and you would be liable for the rest.

It’s also possible that the employee’s personal insurer will subrogate with your insurer to recoup any claims payments if the accident happened in the course of their job.

The takeaway

Almost every company has a situation where it asks someone to use a personal vehicle for business.

If you are concerned that you may not be covered if an employee has an accident in their own car while on the clock, make sure the proper coverage is in place. An uninsured loss can be financially devastating, but is easily avoidable.

Workplace Injuries

Nearly 25% of all lost-time workers’ compensation claims are exaggerated, according to the National Insurance Crime Bureau.

While only a small percentage of workers’ comp claims are fraudulent, quite a few claims include employees staying away from work even after they’ve been cleared to return by their doctor and when they feel able to work. The term for this is malingering.

When injured workers malinger, the claim lasts longer than the medical disability. The employee has recovered enough to return to work, but has not. This can be due to employee intent, medical provider lack of knowledge about the job requirements, employer disinterest, or other reasons. As you can see, it’s not always the employee’s fault.

That said, some unscrupulous employees can take advantage of the system by:

• Staging accidents.
• Faking injuries.
• Claiming that an injury sustained while not at work occurred on the job.
• Inflating the degree of an injury to get more time off from work.
• Claiming that an old injury is a new work-related one.
• Pretending they are injured more seriously than they are.
• Staying on benefits and away from work even after the worker has healed (malingering).

A word of warning

While some of these red flags don’t necessarily mean that there is fraud or malingering, if you do suspect it, you should contact the claims administrator handling your employee’s case.

If you can provide evidence to back up your suspicions, the insurance company may initiate an investigation that could include surveillance. All workers’ comp carriers are required to have fraud units, as per state regulations.

Construction Sector

You should never hire an unbonded subcontractor on a construction project, unless you want to put your organiza-tion at significant financial risk.

If the contractor you hired fails to perform their work as specified in the contract, without a performance bond you have no means of recovery from the company. Also, if the subcontractor fails to pay its subcontractors or suppliers, without a payment bond, your organization could be left holding the bag for the errant unbonded subcontractor.

Despite these risks, many contractors don’t require subcontractors to be bonded because they think bonding raises the cost of a project.

But any costs related to bonding are negligible compared to the problems you may encounter if you deal with unbonded subs.

The two most commonly used contract bonds for general con-tractors are payment and performance bonds.

• Performance bonds are meant to ensure that a contractor will perform and fulfill its contractual obligations in relation to the project owner or obligee.
• Payment bonds guarantee that the general contractor will pay subcontractors and materials suppliers whatever is owed them. This bond is also meant to protect the client from claims arising against them due to contractor negligence.

Payment bonds also cover all first-tier subcontractors and mate-rials suppliers, as well as second-tier subcontractors and suppliers to first-tier subcontractors on public construction projects.

In other words, all parties are well covered when a contractor has obtained payment and performance bonds.

General contractors are at risk if a subcontractor defaults on its obligations, or fails to pay its lower-tier subcontractors and suppliers. Even if you have a long-standing relationship with a subcontractor, you are still putting your organization at risk if you do business with them and they are unbonded.

Other Benefits

Higher standards – The chances of a subcontractor failing to finish its work, or failing to pay its own subs and supplier, are greatly reduced if they are carrying a bond.

That’s because a surety company must prequalify a company before they can secure a bond. To qualify, they have to go through a stringent process, including an examination and assessment of a company’s financial health and its ability to perform on projects.

The latter process is done by looking at prior projects the company has worked on and its experience in the industry.

The surety firm also assesses the subcontractor’s documentation and how the business operates.

In other words, the prequalification process weeds out subcontractors that are either not fit for a project, or may not have the intention to perform well on it. Sureties have no interest in underwriting bonds to unstable businesses, so they make sure to pick the most reliable subcontractors.

Reliability – Bonded companies are also more likely to work responsibly on your project due to their obligations to the principles of the project under the bond contract’s indemnification agreement.

A subcontractor bond will typically require that the business entity and its owners provide indemnity in the form of personal assets. Thus, subcontractors that are willing to put their personal assets at risk are more likely to see the job through and do it properly.

Good relationships – Most companies that are bonded and have been bonded on other projects will typically have a good relationship with their surety company.

Such partnerships are priceless in the inherently risky construction sector.

Companies that operate prudently and which foster and maintain good relationships with their surety companies, suppliers and other contractors are preferred business partners for all involved.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.

Requiring good housekeeping and hygiene in your construction sites can improve your overall workplace safety.

A workplace hygiene policy can encourage good housekeeping, and provides workers with clean drinking water, sanitary restrooms, and washing facilities to clean up. These practices reduce the chances of cross-contamination to safeguard everyone’s health and safety.

Housekeeping

Stray equipment and tools are a tripping danger. If you have a policy that the workplace must be tidy and all equipment and tools stowed after use, you can reduce the chances of accidents.

Drinking Water

Provide clean drinking water via plumbed drinking fountains or with clean containers.

Make sure that potable water containers are clearly labeled and have drinking fountain spouts or faucets that can be used to fill single-use water cups. Remember: Water should not be dipped from the container repeatedly with the same cup.

Clearly label any non-potable water as unsafe for drinking, washing or cooking.

Bathroom facilities

OSHA requires that you have separate bathroom facilities for every 20 employees (or fewer) of each sex on a jobsite. For example, if there are 30 men and 10 women, three bathrooms are required. The bathrooms may contain a toilet and urinal, but half of them must have a toilet.

If there are fewer than five employees on a jobsite, separate restrooms for each sex are not required if they can be locked.

Bathrooms should be private and in good working order with an adequate supply of toilet paper. Inspect and clean them daily.

Washing facilities

Make sure that you have facilities for your workers to wash their hands. Workers can wash away harmful substances and use the washing area to service and decontaminate personal protective equipment.

Having a washing station helps your workers avoid cross-contamination before eating, drinking, smoking or heading home for the day. It also helps them avoid getting sick later by eating with the same hands that may have been exposed to a hazardous substance.

One washing station is required for every 20 (or fewer) employees on a jobsite by OSHA. Wash areas should be clean with a good supply of water and soap, other skin cleansing agents, or special hazardous substance cleansing compounds. OSHA requires single-use drying towels or a warm-air hand dryer.

Washing facilities must be located outside of the portable toilet, but close to bathroom facilities.

On jobsites with fewer than five employees and only one portable toilet facility, the washing facility may be located inside the portable toilet station.

The takeaway

• Make sure all of your workers understand that it is their duty to help ensure good hygiene.
• Urge them to immediately report unsanitary or hazardous conditions to their supervisor.
• Urge them to keep the worksite tidy, by cleaning as they go and keeping the site clear of debris, trash and hazardous substances.
• Urge them to use washing facilities to clean their hands and avoid cross-contamination to ensure a healthy work environment for all.

Workers’ Comp

Are you due for a workers’ compensation premium audit? Audits are how insurance rates are determined, and it’s possible that an audit will uncover information that can actually save you money.

Additionally, audits are important to make sure that your employee counts and their job descriptions haven’t changed, so that the premium can accurately reflect your current operations and risks.

The audit can be stressful, but the key is preparation. These five tips can help you get ready:

Tell your broker when there are changes in your staffing, payroll or areas of operation – This is important not just at audit time, but all the time.

Your rates are based on variable rating information, including the number of employees, job classifications, and the states in which you operate. Updated information results in more accurate premium assessments.

Get your records ready – Your auditor will need to see records such as federal and state tax returns, ledgers, checkbooks, contracts, and employee or contractor tax documents.

If you prepare your records in advance, you’ll speed up the audit process.

Break out various types of compensation – For example, to set your premium, your broker considers pay but not contributions to employee benefits packages and other perks, so it’s important to make sure your records are clear on the various types of compensation.

Also make sure overtime pay is clearly defined, since it’s classified as regular pay for workers’ comp insurance purposes.

Ensure that contractors have their own insurance – This is important from an audit standpoint, and also from a liability perspective. If an uninsured contractor has an accident while working on your behalf, you can be held liable.

If an audit identifies contractors for whom you don’t have certificates of coverage, you can be charged for their premiums.

Remain on hand to answer questions – The auditor may have questions or need more information. If you are available to provide answers, your audit will be completed more quickly.

By following these tips, you’ll be more prepared for your workers’ compensation premium audit.

A fast, efficient audit process can save time for both you and your auditor, so it pays to be prepared.

Workplace Safety

After Issuing emergency regulations in November, Cal/OSHA began to step up its enforcement of COVID-19 protections in California workplaces.

The types of business being cited cut across many sectors. Although most are focused on health care settings, the inspections are also sweeping up retailers, restaurants, fitness centers, agricultural operations, food processing and other manufacturing settings.

Since Nov. 30, 2020, when it issued the emergency COVID-19 workplace prevent regulations, Cal/OSHA has issued citations to more than 109 employers, with total proposed penalties of more than $2.8 million.

Since the new regs were implemented, most employers were cited for multiple COVID-19-related infractions.

But Cal/OSHA started inspecting workplaces before those rules were in effect. It’s first inspections were conducted in May 2020 and since then, it has issued $4.4 million worth of proposed penalties in total.

A complaint

Often it’s either staff or a customer that contacts Cal/OSHA to complain about poor COVID-19 protections, as was the case when it received a complaint about a gym in Ventura.

Upon inspection, Cal/OSHA determined that the gym was not enforcing face covering use and physical distancing. It was cited for one willful-serious, two serious and six general violations.

Proposed penalties: $57,740.

A news report

Cal/OSHA cited a market in Oakland for multiple violations, including three serious. This followed an inspection after local media reported that 17 workers tested positive for COVID-19, one of whom was hospitalized.

Cal/OSHA determined that Cardenas Market had failed to adequately address the potential outbreak of the coronavirus among workers by implementing preventative measures. The business did not initially implement or require face coverings or masks, physical distancing or training of workers on coronavirus hazards. Cardenas Market also failed to immediately report a COVID-19-related serious illness.

Proposed penalties: $30,670.

A fatality

A large agricultural concern was cited for multiple violations including two serious, following a fatality-initiated inspection after an employee was hospitalized and died from COVID-19 after working at a carrot field in Holtsville.

Cal/OSHA found that the employer had failed to implement safety protocols for its farm workers and failed to train them on the COVID-19 hazards and prevention.

Proposed penalties: $30,600.

An accident

Sometimes Cal/OSHA shows up to conduct an inspection of an accident unrelated to the coronavirus and finds COVID-19-related infractions as well. This happened with a retailer in Gilroy.

Cal/OSHA cited the shop for one regulatory and one serious citation following an accident inspection. It found that the employer had failed to immediately report a COVID-19-related serious illness, and to establish, implement and maintain an effective Injury and Illness Prevention Program.

Proposed penalties: $15,125.

The takeaway

As you can see, Cal/OSHA will inspect any employer for possible infractions, particularly if there are complaints or news about an outbreak at a workplace. If you have not already done so and you have staff working at a physical location, you should immediately establish safeguards that are in line with Cal/OSHA’s emergency regulations.

Remember too: Those regulations not only require you to protect workers against COVID-19, but to also report to Cal/OSHA and other authorities anytime there is an outbreak or a case in your workplace.

Injury Prevention

Thousands of people are blinded each year from work-related eye injuries that could have been prevented with the proper selection and use of eye and face protection.

Eye injuries alone cost more than $300 million per year in lost production time, medical expenses and worker compensation.

OSHA requires employers to ensure the safety of all employees in the work environment.

Eye and face protection must be provided whenever necessary to protect against chemical, environmental, radiological or mechanical irritants and hazards.

Eye and face protection is addressed in specific standards for the general industry, shipyard employment, longshoring and the construction industry.

It is impossible to predict when and where an eye incident might occur, but it can happen literally in the blink of an eye, injuring or even blinding a worker who’s not wearing proper protection.

It’s an employer’s responsibility to identify the eye safety hazards at the workplace, and then provide workers with the best protection against them.

Along with training on how and when to use eye protection equipment, workers should learn about cleaning, storing and replacing equipment.

In most cases, workplace eye injuries can be avoided if workers have been trained to know when and what eye protection equipment should be worn – and what to do in case of an eye injury.

Below are some common causes of eye injuries, with suggested first aid responses. In all cases, professional medical attention should be sought as soon as possible after taking initial first aid measures.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.

Cost containment will be the chief workers’ comp insurance concern for U.S. employers over the next 12 months, according to a recent survey.

Zywave, an insurance software company, found that among the 3,500 companies polled, 59% were “very or somewhat concerned” about cost containment this year.

And while premiums have been dropping, if employers slide on safety, prices can rebound quickly. If you have not done so, you should, establishing a solid safety pro-gram and help injured employees return to work.

The survey results included the following:

• The most effective workers’ comp cost control method was a safety-minded culture (65%).
• Other popular cost-control measures were, in order of popularity, on-site accident evaluations, loss-prevention evaluations, zero-accident goals, having a dedicated claims manager, safety committee efforts, and using a preferred occupational medicine facility.
• Also, only 63% of the employers surveyed said they had a written safety manual, and less than half of them (48%) said that it had been reviewed in the past year.

Best Practices

One mistake you want to avoid if you incur property damage to your business is to wait too long before filing the claim.

The owners of Dallas Plaza Hotel in 2016 learned this the hard way when a U.S. Circuit Court of Appeals held that the business had waited too long to file a claim with its insurer after suffering hail damage in July 2009.

The court ruled that because the hotel had waited more than 19 months to file the claim, it was impossible for the in-surer, American Insurance Co., to ascertain exactly when the damage had occurred.

The hotel’s property policy required that the insured make “prompt notice” of any claims.

American Insurance rejected the claim when it received it in October 2011, saying that there had been so many hailstorms in the area before and after July 2009 that it could not deter-mine what caused the damage or when the damage occurred and, specifically, whether it had occurred within the policy period, which expired in September 2009.

This is a common problem for businesses and the lesson from this case is that you should inform the insurer as soon as possible after incurring damage that may be covered by your insurance policy.

The following are other sure-fire ways to risk having your claim denied or disputed by your insurance company:

Not reading your policy

Understand exactly what your policy covers. Typically, commercial property policies will not cover flooding or earthquake damage. That kind of coverage will often require a separate policy or rider.

Not being prepared

If your business has suffered damage, you’ll be better off if you know what to do in advance. Advance steps you can take include:

• Creating and put in place an emergency action plan.
• Reviewing your policy to make sure you have adequate coverage.
• Knowing where your insurance policy is kept.
• Keeping an electronic or physical copy offsite.
• Having your insurer’s claims telephone number and e-mail address in the contacts on your smartphone, so you can call them immediately if you have to file a claim.

Not keeping damaged goods

If your business clean-up includes removal of items such as water-damaged merchandise, flooring or insulation, keep it all, even if it has to pile up in the parking lot. The damaged materials are all evidence of the impact of the disaster on your business.

Take photos and itemize everything that was damaged. You may have to make repairs immediately to prevent further damage, or move machinery to a new location. If so, photograph the original scene to document how it was before you started your clean-up. Also take photos of any repairs you make.

Workplace Safety

Are your safety meetings a drag for your workers? Are they shifting in their seats as they sit through yet another presentation on slip and fall hazards?

Safety meetings are a key part of a safety awareness program and are one of the best methods to motivate workers to take safety out of the classroom and into the field. But they don’t have to be boring. You need to keep your employees’ attention and make sure they retain what you teach them, because their lives could depend on it.

It’s not easy to keep meetings motivating and interesting to your workers.

Ideas to keep staff engaged

Get a manager involved – Have an experienced manager run your safety meetings along with a safety engineer or expert. Safety engineers may get too wonkish for your workers, who can then lose interest. To be most effective, have a manager conduct the meeting with the safety expert, who can answer the technical questions.

Build an agenda – Circulate it before the meeting. Work with a small group. Focus on the specifics. Define what success will mean. Create an expectation of value and participation. The most successful safety meetings are well-planned, with management involvement – and documented.

Don’t look backward – Don’t make the meeting all about reliving one bad accident that happened in the workplace. Instead, review the accident or close call and what led up to it in the first place, so you can discuss ways to make sure the incident is not repeated in the future.

Vary your techniques – Individuals learn differently. If you must use PowerPoint slides, use them sparingly with one idea or image per slide. Videos can be helpful in combination with discussions and games. Involving people helps them retain the message.

Tell stories and use real-life examples – Have a story or an example to illustrate every point. The best safety meeting is just hanging out and talking about a subject and telling stories. Talking about the individuals involved in the story helps personalize it.

Use games and competitions – But be sure they have a purpose to either educate or inspire. Think “Safety Bingo” or “At-Risk Jeopardy.” You can hold competitions between teams of workers to see who knows the most about a certain safety issue that is typical in the workplace.

Follow up – Reinforce the key points of the meeting by getting back to the participants. Send them articles, bullet lists and links with resources, as appropriate, a few weeks after giving a safety talk.

Fresh ideas

Selecting a topic for a safety meeting is not always easy. Sometimes you may be wondering what to feature, especially when you have covered some topics many times. If you are fresh out of ideas, consider your topic by:

• Reviewing new laws and industry standards,
• Reviewing new company policies and procedures,
• Evaluating existing safety hazards in the workplace,
• Considering future industry events that may impact specific work procedures,
• Asking your employees for issues they would like to see discussed at the meeting.

The best time to schedule a safety meeting is the start of the work shift. Before you start a safety meeting (on time), have the participants sign in.

The takeaway

You should do all you can to ensure your workers’ safety, and a key part of that is to train them properly in the safety issues that confront them at work.

Employees have often sat through several safety meetings, so the key to driving home the point effectively is to make them engaging, stimulating – and above all, memorable.

Tailgate Meetings

As the economy regains its footing, employment in the construction industry is surging as pent-up demand means that more homes are being built at a brisk pace. But this new growth in housing has come at a price for those working in the industry: a significant jump in construction workplace deaths and injuries.

In 2019, 1,061 construction workers died on the job, up 5% from 2018 and the sector’s highest number of worker deaths since 2007. A new report suggests that the trend will continue as human resources shortages force construction firms to promote relatively inexperienced workers into supervisory roles. This means construction firms have to double down on safety, and that starts with sound tailgate meetings and buy-in from management.

You can use this handy list of meeting topics to plan your tailgate meeting agenda for the year. This list is by no means exhaustive, but it does cover the major areas that you should refresh your workers on annually.

• Workplace hazards – Hazard recognition is a skill that all workers need to stay safe on the worksite. This training should cover common types of hazards found in the construction industry, how to assess their severity and the different control methods employed to prevent incidents from occurring.
• Managing worksite conditions and equipment – The dangers vary at each worksite depending on the job as well as the weather. As a result, hazards associated with housekeeping, slips, trips, falls and materials need to be recognized. Training should include general tool safety guidelines including rotating machinery, air, electric and power tools.
• Fall protection – Falls are a serious hazard in all construction. This training should focus on basic fall protection equipment used in construction, worker and employer responsibilities for working at heights, and common fall protection inspection points.
• Ladder and scaffold safety – Some of the most common tools used on construction sites today include ladders and scaffolds, which pose their own fall hazards. They can also be major sources of injuries due to falls and improper use. Training should focus on the types of ladders and scaffolds that will be used in a job, correct set-up, usage and contraction, along with a description of scaffold tags.
• Defensive driving – Whether your employees are driving to work, from work, or operating a piece of equipment on the worksite, it is important to practice safe, defensive driving techniques. Your training should focus on state driving laws, defensive driving techniques and typical causes of motor vehicle accidents.
• Powered mobile equipment – Powered mobile equipment is used for many purposes in the construction industry. It is important to operate and work safely near this equipment. Training should cover all of the powered mobile equipment you’ll have on the job, how to conduct a pre-job walk around of a machine and how to work safely around the various pieces of equipment.
• Personal protective equipment – Although it is your last line of defense in the prevention of injury, personal protective equipment (PPE) is a regular part of the clothing worn on most construction jobs. Training should focus on the role of PPE on the job, basic PPE found in the construction industry, and when specialized PPE is necessary.
• Excavating and trenching – Any excavation has the potential to harm workers who are not properly informed of the risks associated with digging and how to prevent dangerous incidents. Training should explain hazards, different soil types and their properties, and important safety precautions that should be part of all digging operations.
• Personal physical care and conduct – Working in the construction industry requires substantial physical health and stamina. In this module, ways to care for your body to prevent injuries and the impacts of drugs and alcohol on your ability to work safely should be examined, as well as professional behavior and conduct on the worksite.
• Hazard communications – The construction industry uses various chemicals and materials that could be harmful to your health if not handled correctly. Training should focus on the Globally Harmonized System of hazardous materials labeling and the function of Material Safety Data Sheets, so that employees know how to protect themselves from dangerous hazardous materials.
• Environmental safety – Protecting the environment is everyone’s responsibility. Training should introduce workers to the typical types of pollutants found in the construction industry, what to do in case of an accidental release of hazardous materials and general transportation of dangerous goods requirements.
• Emergency response – When an accident does occur, your employees, supervisors and managers should know your emergency response plan. Training should cover key response plan elements, how to access first aid on the worksite, and basic fire-fighting techniques.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.

In the last month of the Trump administration, the U.S. Department of Labor finalized a regulation to clarify for employers which workers are employees and which are independent contractors.

Because independent contractors are typically ineligible for employee benefits, businesses have an incentive to classify workers that way. The new regulation’s purpose is to make answering the question easier.

The regulation employs an “economic reality test” that courts have developed over the years. It asks “whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in business for themselves.” The test considers two “core factors” and three additional “guideposts” to answer this question.

The core factors are:

The nature and degree of control over the work – Who sets the work schedule, the worker or the employer? Can the individual work for the employer’s competitors? Who selects the projects on which the individual works?

How much opportunity the worker has for profit or loss based on initiative and/or investment – Can the worker make more money only by working more hours? Can they vary their profit or loss by hiring workers or buying equipment or materials?

If the worker’s status is still unclear after answering those questions, the employer must consider additional guideposts:

The amount of skill required to do the work – Does the job require “specialized training or skill that the potential employer does not provide?” If so, the worker may be an independent contractor.

How permanent the relationship be-tween the worker and employer is – The worker may be an employee if “the extent (of) the work relationship is … by design indefinite in duration or continuous.”

Whether the work is part of an “integrated unit of production” – Is the individual’s work separate from the employer’s production process? According to one analysis, “this factor will turn on whether the individual works under circumstances analogous to a production line.”

Lastly, the rule states, regardless of what a contract between the two parties or a particular theory may hold, “the actual practice of the parties involved is more relevant …” If there is a conflict between a contract and reality, the DOL will emphasize what actually happens.

The takeaway

The new regulation is due to take effect on March 8. However, some believe that the new Biden administration will delay or even rescind it. One observer predicted that the administration would “look for ways to scrap it.”

Even if the regulation takes effect unchanged, its reach will be limited. Relevant state and local laws still apply. California, for example, enacted a law in 2019 that applies a different test to the question of independent contractor status, one that many observers believe will result in more workers being classified as employees.

Whatever happens, employers should classify workers based on how much control they have over them. That, and not whether the employer gives the worker a 1099 tax form, will determine whether they are an independent contractor.

Workplace Dangers

While all businesses need electricity to get the job done, it can also pose a significant workplace safety issue if your workers are careless.

To reduce the chances of an injury or death, it’s imperative that you train your workers in electrical safety.

While too many of us have gotten an electrical shock at some point, it should not be taken lightly as even a small amount of electrical current can be fatal.

Here are some of the main areas you should focus training on:

Metal and water

Risk is greatest around metal objects and in damp conditions.

• Train workers to ensure that electric equipment, switch enclo-sures and conduit systems are properly grounded and that all external or damp operations are wired for wet conditions prior to operations.
• They should wear the correct gear, such as rubber gloves and boots, while working in damp environments.
• You should provide rubber mats, insulated tools and rubber sheets to protect them from exposed metal.

Defective equipment

Defective equipment can result in shock or electrocution.

• Workers and supervisors should inspect electrical equipment, outlets, plugs and cords before each use.
• If a worker finds faulty or damaged equipment, they should alert a supervisor who should remove, tag and have the item repaired.

Cord management

• Make sure outlets and cords are of adequate size and length to prevent an electrical overload.
• Keep cords out of the way if possible to avoid tripping hazards.

Lockout/blockout

• Follow lockout/blockout procedures.
• Workers should stop using a tool if they feel even a small shock.
• Workers should turn off the power if they smell a hot or burning substance, or if they notice smoke, sparks or flickering lights.

Watch for power supply lines

Contact with overhead power supply lines is one of the most com-mon causes of electrocution for construction workers. This usually happens when workers are using portable elevators, cranes, pipes or hoisting machinery that puts them in close proximity to power lines.

• Workers using high-clearance devices should continually scan for danger and take precautions to avoid contact with overhead lines.
• If an overhead line breaks, keep away from the wire and every-thing it touches. Call the power company to shut off the electricity.
• Only qualified electricians should repair electrical equipment or work on energized lines.

One last thing…

Besides training your workers in all facets of electrical safety, don’t forget to train them in emergency response procedures and CPR, too.

Property Protection

The average vacancy rate for offices nationwide skyrocketed in 2020 due to the pandemic to 15% at the end of second quarter, up from 9% in the first quarter, according to the website Statista.com.

Unfortunately, when buildings stand vacant they become susceptible to a variety of problems.

There are roughly 31,000 fires in vacant buildings annually, resulting in dozens of deaths, hundreds of firefighter injuries, and an average $642 million in property damage.

Insurance implications

Buildings that are more than 70% vacant for over 60 days also lose some important insurance coverage.

If the building is largely vacant, the standard commercial property insurance policy reduces loss payments by 15% for most causes of loss and does not cover others at all, including vandalism, water damage, glass breakage, and theft.

For an additional premium, the building owner may be able to purchase vacancy permit coverage, which reinstates some or all of this coverage for a specific period of time. An alternative – vacancy changes coverage – can reduce the minimum occupancy that the building must have before the insurance company will consider it vacant from the standard 31%.

We can work with you to get the coverage you need.

A vacant building is never a good situation, but with the proper precautions, the owner can maintain its value and keep it secure until new tenants move in.

Workplace Safety

Slips, trips and falls constitute the majority of general industry accidents, cause 15% of all accidental deaths, and are second only to motor vehicles as a cause of fatalities.

With those stark realities, any employer that fails to guard against these preventable accidents is asking for an injury to occur.

While you can put in place stringent safety procedures, require fall-protection equipment and install non-skid surfaces, there is one thing that is hard to control: the human factor.

Slippery surfaces a major challenge

Slippery surfaces are one of the biggest challenges a business faces in protecting its employees. High-risk areas include:

• Parking lots, especially in areas where water is pooling,
• Sidewalks,
• Food preparation areas, where grease and water can cause hazards, and
• Non-carpeted entryways or lobbies.

Tip: Conduct walkway audits to identify safety issues, so that you can develop plans to eliminate them. The plans need to account for varying weather conditions.

Training

You should put together a training regimen that includes instilling in workers the importance of:

• Immediately cleaning up spills,
• Closing file drawers when done,
• Picking up loose or dropped items from the floor,
• Keeping aisles and walkways free from clutter, and
• Keeping their personal workspace clean and orderly.

But it doesn’t pay to tell them once. Regular reminders can help instill safety mindedness like the above.

Changing behavior is not easy and it takes time and commitment, but the best solution is a behavior-based safety approach. That includes being mindful of what they are doing.

Train workers so they will:

• Walk with caution and make wide turns at corners.
• Test footing before committing weight.
• Open doors with caution.
• Use railings on stairs.
• Ensure there are three points of contact when using ladders.
• Look before moving and be alert for trip hazards.
• Wear appropriate footwear.
• Push (rather than pull) carts to allow a better line of sight.
• Keep eyes and mind on the task in hand; no multitasking.
• Not text or talk on phone while walking.
• Take designated walkways, rather than shortcuts.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.

When you hire a new employee you always take a gamble on how good they will perform for you, their work ethic and and their honesty.

Some employers even have a hard time finding candidates that don’t have substance abuse issues, while some people are serial workers’ comp filers, malingerers or have prior industrial injuries that can end up affecting your bottom line and X-Mod.

Here are some suggestions to help you avoid hiring someone who is likely to suffer a workplace injury or file a fake injury claim:

Dig deeper in references

The difficult part is making sure employee selection meets your expectations. This may not be easy, since vetting applicants is often limited to calling references they provide and perhaps a drug test.

Yet, even the basic step of contacting references can be made more effective by asking them if they know others who may have knowledge of the applicant. By extending the reach, it’s possible to obtain additional information that can be helpful in evaluating a prospect.

The integrity test

Employers often don’t use integrity tests in the belief that they are too expensive. But, a study by Cornell hospitality professors Michael Sturman and David Sherwyn of 27,000 employees of a national hotel chain highlighted the value of using such a test.

Using a test developed by American Tescor, the hotel hired 6,100 of 29,000 applicants. They then used the data from the test and compared the workers’ comp claims of the new hires to those of existing employees who did not take the test. The researchers concluded that the cost savings of screening the workers was considerable.

Based on the number being tested, the cost of testing appears to be $8 to $14 per applicant. The study indicated that there was a notable reduction in workers’ comp claims among the new hires, which suggests that an integrity test can be a valuable tool for screening job applicants.

Because of the nature of the test, it can be administered before a job offer.

Avoid ‘medical baggage’

You can try to give every applicant who has been given a job offer a pre-employment physical before being approved for hire. If someone has been out of the job market for some time, they are often out of condition for some jobs.

Having been sedentary for a long time can lead to back and neck pain and repetitive motion injuries.

Also, job applicants can be carrying “medical baggage” that may not be found on a job application, but may be revealed with a thorough physical examination.

Drug testing

This is not just a matter of identifying illegal drug use, as a test may indicate that an applicant is taking one or more prescriptions for a previous job-related injury. That’s information that would never be known on a job application.

The goal is to obtain as much accurate information as possible regarding an applicant, so the picture is complete and reliable. While it takes more time and means additional costs, the expense pales against that of hiring someone with a propensity for filing a workers’ comp claim, or who is more apt to suffer a workplace injury.Employers need to comply with state and federal laws when undertaking drug screenings.

The Big Question

As 2021 gets underway and while you’re making New Year’s resolutions, you should also resolve to review the state of your business’s insurance program.

The best way to do that is to start by reviewing your enterprise’s activities in the past year and how they may affect your insurance policies in the new year. What you find as you go through the following checklist may surprise you.

Did your operations change last year? Workers’ compensation and commercial general liability (CGL) insurance premiums are based in part on the type of work your business does. If your business changed, the insurance company may revise how it classifies your operations when it audits your records. This could cause your premiums to increase; inform the insurer now to avoid a surprise later.

Did your payroll and sales change? These premiums are based on the amounts of your payrolls and sales. Employment practices liability insurance premiums are based on the number of employees. If you had a good year and these numbers increased, expect to pay additional premiums at audit time. Conversely, if both shrunk, ask your insurer to reduce its estimates so you can get the return premium now.

Did you acquire, form or sell any businesses? CGL policies typically provide short-term coverage for some newly acquired or formed entities. After 30 or 90 days, that coverage disappears unless you report the new entities to the insurer.

Workers’ comp policies do not automatically cover a new entity. If your business and the new entity have common ownership, you may be able to add that entity to your policy, but you must report it to the insurer.

Did your properties change? Did you buy or sell any buildings? Lease new ones? Add on to or upgrade any buildings? Buy new equipment? Make sure your insurer knows about these changes. Some property insurance policies provide limited automatic coverage, but only for 30 days or so.

Also, the amounts of insurance on your properties should reflect the cost of replacing them. If your building is 30% bigger than it was this time last year, you may be underinsured.

Did your auto schedule change? If you have sold, replaced or added any vehicles, make sure your insurance company has an up-to-date list of all vehicles.

Do you need new or additional insurance? Could you afford to pay for legal costs, settlements, penalties, lost income and recovery measures if you were sued over a network data breach or suffered a ransomware attack? If not, you may need cyber insurance.

Could a client sue you for alleged errors or omissions in your work? If so, you might need professional liability insurance.

Also, you may need greater amounts of general liability and automobile liability insurance, especially if you work for other firms. They often require their vendors and contractors to carry high insurance limits. You may need a commercial umbrella liability policy for additional amounts of insurance.

The takeaway

You’ve worked hard to build your business, and your work deserves protection. By using this checklist, you will get a good start on protecting what you have while you work in the next 12 months to make it grow.

Commercial Auto

As the cost of commercial auto insurance continues climbing at unprecedented rates, any business with vehicles has to make sure that it has procedures and policies in place to reduce the chances of its drivers causing accidents.

When a business entrusts a vehicle to an employee, it is liter-ally putting its assets on the line. That’s why you should set these no-exception rules for drivers:

• Always wear seat belts.
• No driving while under the influence of alcohol or drugs.
• No mobile phone use while driving.

You should also set guidelines for employees to follow when they use company vehicles, such as:

Limit their non-business use of vehicles – If employees take company cars home with them, you should set reasonable limits on personal use.

Allow plenty of time between meetings and assignments – This will make it less necessary for employees to speed.

Park vehicles wisely – Instruct workers to park vehicles in well-lit areas.Even with all the preventive measures in the world, an accident will occasionally happen. Employers should prepare their drivers for that event.

You can start by Develop procedures for what employees should do after an accident.

What to do after a crash

One of the most important aspects of controlling your insurance costs is having drivers who know what to do after and accident.

If one of your employees is involved in an accident:

• Report the accident to us or your insurance company.
• Follow the conditions listed in the insurance policy. Check with us if you do not know what they are.
• Follow the insurer’s instructions for getting repair estimates and communicating with physicians.

Your insurance company may be able to help. Many insurers offer loss-prevention guidance for their customers.

Businesses can reduce their risks and control their costs by working with their insurers and following these simple steps.

Construction Safety

Working at heights is one of the more dangerous activities for construction workers, and fall protection is recommended at most heights above 6 feet by Fed-OSHA. Employers in states that operate their own OSHA-approved plans must abide by their state’s requirements.

Cal/OSHA’s trigger for personal protective equipment is 7 1/2 feet, but that’s the main trigger. The agency has a number of different height triggers for fall protection.

Failure to provide fall protection equipment to workers when they are working at or above a height trigger is not only dangerous to your employees, but can also get your firm cited.

Fall protection triggers

Cal/OSHA has many fall protection trigger heights, depending on the activity:

Two stories or 30 feet, whichever is less: Connecting structural steel (iron workers).

20 feet: Most roofing work.

15 feet: Panelized roof systems, residential framing and roofing activities, work on 4” nominal or wider structural members and other than connecting steel (iron workers). This height also includes thrust-outs, trusses, beams and purlins.

Structural wood framing workers working near a lead-ing edge must be protected from falls of 15 feet or more by one or more of these:

• Guardrails,
• Safety nets,
• Personal fall protection system.

7 1⁄2 feet: Work on unprotected platform, or perimeters, edges, sides, slopes, etc. of structures.

6 feet: Crossing over trenches/excavations on bridges/walk-ways.

4 feet: Unenclosed elevated work locations outside buildings.

30 inches: Unenclosed elevated work locations inside buildings.

1. Personal fall restraint system

• The fall restraint equipment should be set and adjusted so there is no free fall over the edge.
• A harness or body belt may be used.
• The anchorage point must support four times the intended load.

2. Personal fall arrest system

• Use harnesses, not body belts.
• Use shock-absorbing lanyard with two locking snap hooks.
• Anchorage point must support 5,000 pounds.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.

Construction Firms face a number of risks every day, from worker safety and protecting the worksite to contractual obligations. But, as the back office relies more on technology to keep business going, there is an emerging risk for the industry: cyber criminals. New machinery increasingly is computerized, and most design, engineering and construction firms are using some form of cloud computing. Also, the multi-user platforms that allow contractors, architects and project owners to collaborate can also be vulnerable to hacking. If that data is compromised, it could force a halt in construction while the parties determine the extent of the breach.

If your firm uses any of these client interface or data-sharing technologies, there is plenty of information that risks being exposed, including:

• Sensitive client data
• Confidential project information
• Proprietary data
• Subcontractor data or financials
• Employee data, including personally identifiable information.

If cyber criminals gain access to construction data, they could disrupt a project by destroying data servers and infrastructure, or by threatening the safety of people on-site. Hackers can also cause harm to an owner’s design and security systems.

What you can do

You should ask yourself these questions to identify deficiencies:

• Is your network secure and are you confident you are protecting your data?
• Where are you storing your data?
• Do you encrypt your data when it is on your or employees’ mobile devices and laptops?
• Did you perform due diligence before granting vendors access to sensitive data?
• Are you taking precautions to ensure that third parties are granted access on a need-to-know basis only?
• Do you have policies and safeguards in place to ensure shared information is not disseminated elsewhere?
• Are you training your staff in cyber security and privacy?

Commercial insurance won’t cut it

Your commercial insurance policy will not cover damages caused by data breaches. That’s because such policies don’t cover damages to intangible property – and many have exclusions for data and technology.

And your property policy will not cover you for loss of business if there is no direct physical damage to your property. Property policies don’t cover damage caused by hackers or rogue employees who shut down your or your project owner’s website or computer systems, or the systems of a service provider you rely upon to conduct business.

Professional liability insurance also will typically not cover damages associated with a cyber attack.

The answer: Cyber insurance

Cyber insurance will cover the costs of recovering from a data breach or malicious attack on your data systems.

It can cover losses from various cyber and electronic issues, including:

• Unauthorized access.
• Business interruption.
• Network damage caused by a virus, malware or human error.
• Any state-mandated notification costs if personally identifiable information was exposed.
• Costs of regulatory penalties, and compliance costs.
• Third-party security and privacy liability arising out of the failure to protect confidential corporate information, including personally identifiable information.
• Costs associated with impaired access or denial-of-service attacks.
• IT forensics and expenses.
• Crisis management and public relations expenses.
• Loss of business income due to network interruptions.
• Cost of recovering systems and data.
• Cyber extortion loss.

One final note about insurance: Many project owners have started including in their contracts requirements for cyber liability insurance coverage to be included in certificates of insurance.

Construction Safety

One of the most common injuries that construction workers and others in the industry sustain is falls from ladders. But, using a ladder seems like common sense, so many employers fail to properly train their workers in ladder safety.

Fortunately, the National Institute for Occupational Safety and Health can augment that training with its Ladder Safety smartphone app (available for Android and iPhones).

The app uses audio and visual signals to aid workers who must use extension ladders. One of the most common injuries occurs when the ladder angle is set too steeply, which can cause it to fall back or slide away during use. Alternatively, if it is set too shallow then the bottom can slide out.

Whether a person is on the ladder or standing under it when it is knocked or falls over, injuries are usually severe enough that they require emergency medical attention.

Experts say that the new phone app is a good way to keep workers safe, as long as employers encourage them to download it.

The app checks the ladder’s angle when it is positioned and also provides several helpful tips for proper ladder use.

It is free to download for Android and iPhone devices.

The app provides feedback for setting up ladders at certain angles. In addition, there are references users will find helpful. There is also a guide for inspecting, using, accessorizing and selecting extension ladders.

In addition to downloading this app, you should conduct ladder safety training for your workers and include basics in regular tailgate meetings.

Premium Inflation

Despite the ongoing COVID-19 pandemic, commercial insurance rates are continuing to move higher across the board, with the exception of workers’ compensation.

A new report by online insurance exchange MarketScout found that in the third quarter of the year the highest rate increases were in liability lines, but property insurance rates climbed too.

Below we’ll look at what’s driving rate increases in individual lines of insurance.

Directors & officers liability

Increased litigation and hefty court judgments against the top brass at businesses around the country have resulted in substantial payouts by insurers, resulting in higher rates.

Insurers are also writing fewer policies, which in turn feeds into higher rates as the supply diminishes.

General liability and umbrella

Rates for these coverages continue climbing due to a number of factors, including large judgments, the cost of litigation and a rising tide of lawsuits against businesses.

Another factor that could affect future rates is the liability effects of the COVID-19 pandemic and if businesses will see a new ground-swell of lawsuits for failing to adequately follow and communicate public health guidelines. As a result, some insurers have started including communicable disease exclusions in their liability policies.

In addition, insurance companies have scaled back on policy limits, according to Arthur J. Gallagher. For example, carriers that have offered $25 million umbrella policies are now limiting them to a maximum of $10 million, or less.

Commercial auto

Rates continue rising in commercial auto, despite a drop in claims due to the pandemic. The increases in commercial auto premiums over the past few years have been due to an increase in distracted-driving accidents and deaths, escalating medical costs and climbing repair costs.

Property

Property insurance rate inflation is largely due to the increasing number of natural catastrophes occurring throughout the country. Hurricane activity and intensity continues to grow, as does the frequency and destruction of wildfires, tornados and flooding.

In response, commercial property insurers have been making changes to coverage terms and conditions, increasing deductibles and shrinking policy limits. These moves have been especially pronounced in areas with higher exposure to natural catastrophes.

The takeaway

With markets hardening, now is a good time to double down on your risk management efforts to reduce your exposure however you can. Depending on the insurance those efforts will take different forms, such as better protecting your properties against catastrophes or training your driving employees regularly in road safety.

Small Business

Many Small business owners make the mistake of not securing a policy after they hire their first employee. Some mistakenly believe they need at least five employees before they must secure coverage.

But in California there is no minimum and if you go without coverage and an employee is injured on the job, your firm could be held liable for all of the medical costs and any lost pay from missing work.

Also, if you are taking on independent contractors and they are primarily working for you, it could be a sign that maybe you should be classifying them as employees.

We hope in this article to clear up any confusion you may have about workers’ compensation if you are a small employer.

If you are running a business, you are not required to purchase workers’ compensation coverage for yourself. The same holds true if you are a sole proprietor and you work with your spouse in running the business.

You can cover yourself, though. In California, workers’ comp is optional where the partners of a partnership (or sole shareholders of a corporation) are the only ones performing work.

The hypothetical

There are benefits to being covered under workers’ comp. If either of you were to get injured while working at the store, you could receive benefits to pay for your medical bills and for time off work.

But what if your nephew comes to work for you over the summer? Are you required to cover him for workplace injuries?

Yes! Even though your nephew is family, he is considered your employee. In California, an employee is anyone that you “engage or permit to work.”

As a result, you should treat him in the same way that you would treat someone that you hired through a formal job application process.

In short, California law requires any business with one or more employees to carry workers’ comp insurance.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.

While the number of COVID-19 workers’ compensation cases filed in California continues to grow, total workplace injury and illness claims in the state have fallen nearly 20% so far in 2020 compared to last year.

Through September, the state had recorded 47,412 COVID-19 workers’ compensation claims, accounting for 11.1% of all claims reported since the start of the year. During that same period, California workers filed 425,280 workers’ compensation claims, down 19% from the first nine months of 2019.

The first COVID-19 cases among California workers were filed in March. They peaked in July and started to decline in August, just when parts of the state started opening up on a partial basis.

California Coronavirus WC Claims

While it’s too early to tell if it’s a harbinger of things to come, the numbers are high enough that employers cannot let their guard down when it comes to preventing the spread of the coronavirus in their workplaces.

Who is filing claims?

The top five sectors reporting COVID-19 workers’ compensation claims during the first seven months of the year were:

• Health care: 16,889 claims (37%)
• Public safety/government: 6,902 claims (15%)
• Manufacturing: 3,759 claims (8.3%)
• Retail: 3,593 claims (7.9%)
• Transportation: 2,255 claims (5%)

Overall claims falling

Due to the severe economic slowdown brought on by the coronavirus pandemic that forced thousands of businesses to shut their doors or have their employees work from home, the number of overall workplace injuries has tumbled. There were a total of 425,280 workers’ compensation claims filed in California in the first nine months of the year, compared to 526,469 claims in the same period of 2019. The case load in September dropped 30% compared to September 2019. “That decline reflects both the sharp drop in employment, the high number of workers now working from home, and the pandemic-driven slowdown in economic activity in the state,” the California Workers’ Compensation Institute wrote in a report about the numbers.

Handling workers’ comp claims

A new law that took effect in September extends workers’ compensation benefits to California employees who contract COVID-19 while working outside of their homes.

To qualify for the presumption, all of the following conditions must be met:

• The worker must test positive for or be diagnosed with COVID-19 within 14 days after a day they worked at your jobsite at your direction.
• The day they worked at your jobsite was on or after June 6.
• The jobsite is not their home or residence.
• If your worker is diagnosed with COVID-19, the diagnosis was done by a medical doctor and confirmed by a positive test for COVID-19 within 30 days of the date of the diagnosis.

The takeaway

If you have an employee who is working on-site and who tests positive for COVID-19, you should let them know about their rights to file for workers’ compensation if they miss work and/or need treatment.

The state’s insurance commissioner has approved new rules that bar insurers from using any COVID-19 claims against your experience modifier (X-Mod), so it won’t hurt your workers’ compensation experience if an employee files a claim.

Risk Management

Have you ever sent an employee out to pick up needed supplies? Offered to buy lunch for the crew and asked an employee to pick it up?

Unless you only send employees who are insured to drive your company vehicles, you may be putting your business at risk.

Your business may also incur liability if you travel on company business and have an accident in a rented car while traveling to meet a client or for other business-related purposes.

If there is an accident that causes damage to a third party and the driver’s insurance doesn’t cover the full costs, your company may be sued to recover the excess amount.

Employees who use their personal cars are generally required by law to have insurance. But unless you hire them as drivers, you probably have no idea how much insurance coverage employees actually carry – or even if they have insurance at all.

If you’re traveling on company business in a rental car, you’re probably covered by your personal insurance or by a policy purchased through the rental agency.

But if you’re in an accident and cause damage that exceeds the amount of personal coverage you have, an attorney for the injured party would almost certainly seek damages from your company.

The solution

The good news is that there’s a simple and relatively inexpensive solution: a non-owned auto insurance policy. This type of policy protects your business if an employee gets in an accident and causes damage while running a company errand. It also protects your company if you cause damage in an accident while driving a rental car on company business.

Keep in mind that non-owned auto insurance generally doesn’t cover drivers – its purpose is to protect the organization. These policies do not generally function as primary insurance; they are designed for excess liability protection.

In other words, if your employee causes damage or injury in an accident while driving a personal car on company business, their insurance would generally pay first.

But if the liability exceeds the amount of the employee’s coverage, non-owned auto insurance would protect your business from being responsible for damage costs not covered by the employee’s coverage.

The bottom line

Liability claims caused by vehicular damage can run into the millions of dollars.

Your business could be at risk if an employee has an accident while traveling on company business.

Your company could also be at risk if you or an employee has an accident while driving a rental car on business. Non-owner auto insurance can provide peace of mind – and vital protection.

Construction

The average of a construction worker is now in the 40s. In the construction industry as a whole, baby boomers (people born between 1946 and 1964) represent 40% of the workforce, according to the Center for Construction Research and Training.

The nature of construction work presents many hazards for workers, many of which may not appear until late into a person’s career. Research suggests that long-term construction work impacts a worker’s musculoskeletal system.

Also, any time an older worker suffers a workplace injury, they are more likely to be out of commission – and the road to recovery is longer.

Because of the physical demands of the work, construction workers who are employed have to be healthier than the general population, but the same physical demands cause workers with injuries or illness to leave the industry.

We know that 10% of construction workers do not return to work after an injury, and that construction workers with a musculoskeletal disorder (MSD), lung disease or injury are more likely to retire on disability than workers with the same conditions in less physically demanding work.

Compared to office workers, construction workers are also less likely to have health insurance and have an increased likelihood of developing a chronic disease as they age. Their odds also increase for developing lung disease, stroke, back problems and arthritis.

Risk factors for older workers

Lower-back injuries are a common injury experienced among construction workers. Also, as people age, they naturally lose strength and muscular endurance, which could have an effect on their ability to carry heavy loads. They may also lack the flexibility of younger workers and experience trouble working in awkward positions, making them more prone to a workplace injury.

Physical workload is an important determinant of work ability among construction workers, and in turn work ability is highly predictive of disability among such workers. A construction worker between the ages of 45 and 54 with a low WAI and severe low-back pain has a 40-fold increased probability of disability retirement compared to a construction worker without those risk factors.

And if they are injured, it will take someone older than 40 twice as long to recover from a typical injury.

A study of U.S. construction roofers found that workers over 55 had lower physical functioning and were more likely to have both a chronic medical condition and an MSD.

The study found that older age, reduced physical function, and lack of job accommodation among these roofers were each predictive of early retirement.

It also found that construction roofers who had received job accommodation for an MSD or a medical condition were four times less likely to retire compared to workers with similar medical status but without accommodation.

Some form of job accommodation was offered to more than 30% of the workers in the study, and many of the accommodations were relatively simple, such as allowing more time to accomplish a task or changing the work schedule. Few employers provided new tools or equipment.

Using the proper tools and work practices is important. You should also recognize the importance of job rotation among workers to help prevent repetitive-motion injuries.

Shifting focus from hazardous to safe work practices will help reduce injuries and keep older and more experienced employees safe and healthy on the job.

Industrial Injuries

Employees are your most valuable assets, but many businesses overlook the importance of having a workplace safety program in place to protect them. Loss control is about employers caring for their workers’ safety. Successful loss control programs are means of reducing injuries and the severity of a potential accident.

If you want to reduce the costs and risks associated with workplace injuries and illnesses, you need to address safety and health right along with production. A plan must be written that includes procedures and is put into practice. Implementing an Injury and Illness Prevention Program (IIPP) will help you do this.

The IIPP will identify what has to be done to promote the safety and health of your employees, and the safety of your worksite. Taking an approach to loss control will make the workplace safe, decrease workers’ compensation and overtime costs, reduce turnover rates, and minimize the risk of Occupational Safety and Health Administration fines – all of which in turn will increase productivity and profits.

Loss control starts with an authentic commitment from management. Employers should also ensure that supervisors, managers and employees are all on board and, together, the two collaborative teams will achieve success.

Hazard assessment, evaluation, action-planning, problem-solving, implementation, record-keeping and documentation are the steps for a successful loss control plan.

Open communication with employees is important to facilitate a successful loss control program. Employee cooperation is connected to everyone understanding what the program is all about, why it is important to them and how it personally affects them.

Consider different channels via which your workforce can be informed, including meetings, e-mails, newsletters or check inserts. Training is an important aspect of your program to ensure everyone has a good understanding of workplace safety.

The takeaway

Remember to update and maintain all your programs at least once a year and/or if there are any changes.

If you are ready to make the commitment of reducing injuries and illnesses and managing claims, you can expect your costs to go down and your profits to go up.

This newsletter is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting insurance, workplace safety, risk management and employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.