R&R Insurance Blog

Wisconsin contractors - budget for pedestrian safety when taking jobs on recreational land.

The courts are not ruling in your favor.

From the standpoint of a business, there is no better take away from the recently decided John Y. Westmas v. Selective Insurance Company of South Carolina. At stake for Wisconsin contractors was their inclusion in Wisconsin Statute § 895.52, known as the recreational immunity statute. By the most recent reasoning of the court, it would be difficult to imagine a scenario when an independent contractor could expect inclusion in this immunity law from the 1980s.

The Situation:

As I’ve written before on this incident, a little caution tape or an extra man on the job could have prevented a tragic pedestrian fatality in 2012.

Circling the 26-mile shoreline of Lake Geneva is a recreational trail open to the public but maintained by the private property owners. One such landowner is the faith-based youth camp Conference Point Center, who in 2012 contracted Creekside Tree Service to trim trees along the highly trafficked shore path.

On the first day of the job, Creekside Tree Service employed two safety “spotters” along the path to divert pedestrian traffic, and two “cutters” to perform the task at hand. On the second day the crew was reduced to three, with only one spotter along the trail.

It was on that second day when Jane Westmas and her adult son were walking along the path. A heavy 17-foot tree branch was cut from 30-feet in the air, falling and killing Jane. While there was an orange road cone on the trail, the pedestrian view was also obscured by the overhang of a nearby building and the spotter was not in their area of the trail.

Creekside admitted another spotter might have prevented the tragedy, but argued that they were immune from prosecution by Wisconsin Statute § 895.52.

The [Failed] Immunity Argument:

Arguing the recreational immunity statute worked in favor of Creekside Tree Service in the first of its three court rulings. Creekside won on the Circuit Court level, and for a moment appeared to be immune.

Wisconsin Statute § 895.52 was passed by the Wisconsin legislature in the 1980’s to encourage private property owners to open their land to the public for recreational purposes. This law grants “owners”, “agents” of the owners, and “occupiers” of the land immunity to injuries and fatalities that occur on the private land open to the public.

Creekside Tree Service argued they were both “agents” of Conference Point Center and “occupiers” of the land engaged in its maintenance for the public good. By a plain reading of the statute, it might appear they are immune from prosecution.

A case used to justify this line of reasoning is the 2007 Held v. Ackerville Snowmobile Club, Inc. In Held, a Snowmobile Club left trail grooming equipment along a path they were maintaining. A snowmobile rider collided with the equipment during a night ride sustaining injuries. The court sided with the snowmobile club finding them the “occupier” of the land and immune under statute § 895.52.

While they won at the Circuit Court level, the appellate court reversed this decision. Creekside Tree Service’s line of reasoning was thrown out, mostly due to more recent rulings by the Wisconsin Supreme Court.

The appeals court followed a 2016 case Roberts v. T.H.E. Ins. Co ruled on by the Wisconsin Supreme Court. In Roberts, a hot air balloon company was providing rides at a charity event in Beaver Dam (private land open to the public). Due to high winds, one of the tethered lines snapped sending the balloon into a line of spectators seriously injuring one. The Wisconsin Supreme Court ruled against the hot air balloon company declaring they were not “occupiers” of the land since there had to be a “degree of permanence” as oppose to mere use of the land.

Seeing as Creekside’s case is somewhere in-between Held and Roberts the Wisconsin Supreme Court took it up. On February 7, 2018 the WI Supreme Court gave clarity on the issue.

Neither An Agent Nor An Occupier:

The Wisconsin Supreme Court agrees with the appeals court – Creekside Tree Service is neither an agent nor an occupier of the land and thus has no immunity under Wisconsin Statute § 895.52.

Complicating this case is that the words “agent” and “occupier” are not defined in the immunity statute. The Supreme Court reasons it must rely on prior case law to define the terms. They agree that “an agent may be either an employee or an independent contractor” but that “[an] important factor in determining whether a person is an agent is the extent of control retained over the details of the work”. In this case, “Conference Point did not control or attempt to control the physical conduct of Creekside [Tree Service’s] employees” and is thus is not an agent.

In other words, because the owners of the property did not control how Creekside trimmed the trees which resulted in the injury, they are not considered “agents” and thus not included in the recreational immunity statute.

The Wisconsin Supreme Court also ruled Creekside was not an “occupier” of the land. For this the court relied heavily on the aforementioned Roberts v. T.H.E. Ins. Co. Recreational immunity requires “a degree of permanence, as opposed to the mere use of the property in question.”

The Dissenting Opinion Is Insight for Contractors:

In the majority decision for the Wisconsin Supreme Court, it was made clear they did not believe this ruling would “contribute to a landowner’s decision to open the land for public use” and thus is within the spirit of the immunity statute.

The dissenting opinion has a completely different take. The two dissenting Wisconsin Supreme Court justices speak almost from a contractor’s point of view. They reason contractors would become more hesitant to take on jobs in land open to the public:

Refusing to recognize immunity for Creekside may force companies like it to weigh the risk of liability to the public when performing their tasks, dissuading them from working at these sites. This could create a domino effect of discouraging landowners, like Conference Point, from opening their land to the public because of the unsafe conditions arising from neglected maintenance the landowner is unwilling, unable, or unqualified to perform.

The dissent did not understand how it’s practical for contractor to be immune after the majority’s decision. Would the court “require Creekside employees to spend the night on the property to establish ‘a degree of permanence’?”  The dissent reasoned the “plain meaning” of the word “occupies” made it “logically impossible” to reason Creekside was not an “occupier” of the land and would fall under immunity.

 Safety First:

The tragic fatality is over. The court’s ruling has been made. What’s important is the future.

This case represented a legal grey area in-between the aforementioned Held and Roberts cases. What can be reasoned from this decision is that, when in doubt, contractors should not expect immunity when performing maintenance on private land open to the public. With courts relying heavily on prior case law to determine rulings like this, it can only be more difficult to claim immunity under the recreation statue in future cases after this judgement.

For a contractor, it’s best tragedies like this are avoided from the beginning. Imagine if Creekside had draped caution tape along the trail or had a second spotter on the day of the fatality. When taking jobs on recreational land budget for the safety of passing pedestrians.

Starting in 2018, the DSPS requires information from the Summary of Work-Related Injuries and Illnesses to be entered into the DSPS’ Online Injury and Illness Reporting System.  A user name and password is required to enter information into the online system.  For questions regarding online access, send an email to DspsSbHealthandSafetyTech@wi.gov or contact your local DSPS OSH inspector.

Per Safety and Professional Services (SPS) Chapter 332.10 – public sector employers must record information about every work-related injury or illness that involves loss of consciousness, restricted work activity or job transfer, days away from work, or medical treatment beyond first aid.  Significant work-related injuries and illnesses that are diagnosed by a physician or licensed health care professional must be recorded.  Public sector employers must also be familiar with recording criteria listed in 29 CFR 1904.8 through 1904.12 and follow this recording criteria as well.  Injuries and illnesses must be recorded on DSPS Form SBD10710A Log of Work-Related Injuries and Illnesses or the equivalent OSHA 300 log.

If there is uncertainty whether a case is recordable, refer to the Department of Public Safety (DSPS) – Frequently Asked Questions document.  This resource answers the following questions:

• When in an injury or illness considered work-related?
• What are the additional criteria?
• What is medical treatment?
• What is first aid?
• How do you decide if the case involved restricted work?
• How do you count the number of days of restricted work activity or the number of days away from work?
• What if the outcome changes after you record the case?
• How do you classify injuries?
• How do you classify illnesses?

Per SPS 332.205, all Wisconsin public employers must complete and submit DSPS Form SBD10710 Summary of Work-Related Injuries and Illnesses, or the equivalent OSHA 300A form by March 1^st.  It is required to submit this form even if there are no work-related injuries or illnesses that occurred during the previous calendar year. This Summary must be posted from February 1^st through April 30^th in an area where the employer posts other important notices.

If the DSPS does not receive the SBD10710 Summary form by the March 1st deadline, orders may be issued. In addition to orders, a SPS 332 safety inspection may be conducted.

For more information about DSPS reporting, recordkeeping and posting requirements, click here to download a copy of R&R's Public Employer Recordkeeping Flowchart.

As prescription drug costs continue to increase, it is important for employers to understand the trends behind cost of prescription drugs and what they can do to better manage their health care expenses. By taking the time to understand prescription drug trends and how the ACA is impacting the pharmaceutical industry, employers may be able to identify ways to reduce health care expenditures.

In 2014, prescription drug spending in the United States increased 13.1 percent—the largest increase since 2003. This jump was due to a number of factors—a major one being a 30.9 percent increase in spending on specialty medications, which are high-cost drugs used to treat complicated conditions like hepatitis C, cancer and rheumatoid arthritis. The growth in prescription spending was also due to more people being insured and gaining prescription drug coverage as a result of the Affordable Cart Act (ACA).

On Monday January 22, 2018, Congress passed HR195 to extend funding for the government through February 8, 2018.  President Trump signed the legislation into law Monday night.  Although this new law was crafted to continue funding the government, it did contain 3 specific items impacting employer sponsored health insurance plans:

• Health Insurance Tax
  • Presently, insured health plans include a premium tax that adds over 2% to the premium rate. This tax is part of the Affordable Care Act.  With the passage of HR195, the Health Insurance Tax will be suspended for 2019.
• Cadillac Tax
  • The Affordable Care Act contained what is often referred to as the “Cadillac Tax”. The tax was originally scheduled to be implemented in 2018.  It would result in a 40% excise tax for health insurance plans with annual costs in excess of $10,200 for single coverage and $27,500 for family coverage.  The tax would be paid by the plan sponsor.  This tax was delayed to 2020 and now, as a result of HR195, it is delayed until 2022.
• Medical Device Tax
  • Manufacturers of medical devices were set to be subjected to a 2.3% tax on their products. Again, this tax was part of the Affordable Care Act.  The passage of HR195 delays the start of this tax for 2 more years.

The new tax law (signed on December 22, 2017) eliminated the individual health insurance mandate penalty starting in 2019.  The employer mandate for Applicable Large Employers (generally companies with 50 or more full-time equivalent employees) and the 1095 reporting continues unchanged.

Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines. R&R Insurance Services will continue to keep you informed of changes.

Read here for a more comprehensive list of these current updates. If you have any questions, feel free to contact a Knowledge Broker at 800.566.7007.

The IRS has released updated tax withholding tables that employers must use in 2018. The new tables reflect the changes made by the tax reform law—which was enacted December of 2017. Employers do not need to obtain new W-4 forms from employees.

According to the IRS, Notice 1036 is the first in a series of steps that the agency will take to help employers improve the accuracy of their tax withholdings by the a new tax reform law, the Tax Cuts and Jobs Act, enacted on Dec. 22, 2017.

The IRS will issue more withholding guidance in 2018. Employers should become familiar with the new tables and begin using them as soon as possible, but no later than Feb. 15, 2018. Employers should also monitor the IRS’s Notice 1036 website for future guidance regarding income-tax withholding under the Tax Cuts and Jobs Act.

For more in-depth information, read here, or contact a Knowledge Broker at 800.566.7007.

To illustrate the benefits of working with one of the largest independent agencies in the Midwest, the following example presents a recent claim situation for one of our newest valued clients.

Shortly after Julie was introduced to Jeff Wolfgram, Knowledgebroker at R&R Insurance, she was involved in an unfortunate car accident. Due to the nature of her situation, Julie continued working with her current insurance agent to file the claim.

During the next several days, Julie’s agent never got back to her and found it easier to get in touch with Jeff for questions. Jeff provided guidance on filing the claim, managing the claim process, etc.

Because of the level of service and the expertise Jeff provided, Julie ultimately decided to switch agents and begin working with Jeff Wolfgram and R&R Insurance Services.

Contact a Private Client Executive for more information.

*Client names have been changed to maintain anonymity.

With the new year come new updates on regulations. Wisconsin employers are being reminded of the important OSHA and Injury Tracking Application (ITA) items listed below.

OSHA Updates:

1. OSHA has increased its penalties as required by the Federal Civil Penalties Inflation Adjustment Act.  Penalty levels increased approximately 2 percent. The new penalty levels will apply to all violations occurring after November 2, 2015, with penalties assessed after January 2, 2018. 
2. Employers can now submit their OSHA Form 300A data for 2017 to the ITA.
3. Employers will not have to submit their OSHA 300 and 301 information for 2017 to the ITA.

ITA Updates:

Employers can now begin to electronically report their Calendar Year (CY) 2017 Form 300A data to OSHA through the agency’s Injury Tracking Application. All covered establishments must submit the information by July 1, 2018. Employers can view their submitted CY 2016 Form 300A summary information, but they cannot edit or submit additional 2016 data on the ITA website.

Establishments that meet any of the following criteria DO NOT have to send their Form 300A data to OSHA. Remember, these criteria apply at the establishment level, not to the firm as a whole.

• The establishment’s peak employment during the previous calendar year was 19 or fewer, regardless of the establishment's industry.
• The establishment’s industry is on thislist, regardless of the size of the establishment.
• The establishment had a peak employment between 20 and 249 employees during the previous calendar year AND the establishment’s industry is noton this list.

Covered establishments with 250 or more employees are only required to provide their 2017 Form 300A summary data. OSHA is not accepting Form 300 and 301 information at this time. OSHA will issue a notice of proposed rulemaking (NPRM) to reconsider, revise, or remove provisions of the "Improve Tracking of Workplace Injuries and Illnesses" final rule, including the collection of the Forms 300/301 data. OSHA is currently drafting that NPRM and will seek comment on those provisions. 

For more information, contact a Knowledge Broker at safety@rrins.com.

Do you know what the following people have in common?

Amy Pascal, Greg Steinhafel, Frank Blake, Richard Smith, Noel Biderman

All were CEOs of companies that lost their jobs following a data breach/hacking of their respective companies.

• Amy Pascal was CEO of Sony Pictures.  The company settled a class action lawsuit for $15 million
• Greg Steinhafel was CEO of Target.  They settled class action lawsuits for $50 million
• Frank Blake was CEO of Home Depot.  The company paid $27.25 million to banks, $134 million to Visa, MC and more banks, $19 million in class action settlements
• Richard Smith was CEO of Equifax.  Suits are still pending at time of publishing
• Noel Biderman was CEO of Ashley Madison. They paid $11.2 million to settle claims

The expense of dealing with a data breach can add up quickly.  Take, for example, a hospital that experienced a breach of 40,000 records.  The price tag was $450,000 for credit monitoring and ID Theft insurance, $175,000 in notification and call center expenses, $25,000 forensics costs and $90,000 in legal costs, and $500,000 in regulatory fines.

In another instance, a former hospital employee downloaded 102,000 patient records.  The expenses amounted to $1.4 million in credit monitoring & call center, $500,000 in notification expenses, $500,000 legal expenses, $250,000 forensics, $1.5 million in legal expenses and $750,000 in regulatory fines.

Many companies were impacted by the Petya/NotPetya malware in 2017.  Consider a full day without phones, six days without email, nearly two weeks without complete access to documents, and  $700,000 in lost billings.  That’s what happened when this malware hit a global law firm.  What lessons did they learn?  With ransomware, detection comes too late; everyone has a plan until you get punched in the face; no firm is immune. Globally the malware cost $1.5 billion, including companies such as  FedEx which posted a $200 million loss and Maersk  which posted a $300 million loss, to name just a few.

All companies are at risk regardless of size, industry, or location.  How do you offset the staggering amounts that a cyber event can cost your company?  Invest in risk management, cyber security, and cyber insurance.

Harvey Weinstein, Roger Ailes, Charlie Rose, Mike Cagney, David Guillod, Michael Oreskes and the growing list of executive sexual harassment scandals have dominated headline news over the past few months. The rising awareness of workplace misconduct, in an increasingly litigious society, may have employers quaking at the cost of defense. Regardless in size of the company, every business should consider putting the proper coverage in place to respond to this type of event.

Management fearful of costs associated with allegations ranging from sexual harassment to retaliation would best find relief with proper employment practice liability insurance (EPLI).

EPLI Overview

For most businesses, EPLI would not rank highest on a list of insurances to obtain such as general liability, property & casualty, and workers’ compensation. That said, EPLI should be an enticing insurance since, by a wide margin, it is the least expensive of the aforementioned.

EPLI coverage can be summed up as settlements, judgements, and the defense costs associated with claims against improper acts in the employment process. Common claims include harassment, defamation, discrimination, a hostile work environment, breach of contract, emotional distress, wrongful termination, and denial of career opportunity.

Not all EPLI polices are the same and it is best to discuss with your agent the proper coverage. One difference is the way policies may respond to 3^rd party claims.

Many EPL policies will only cover 1^st party claims. These are claims made by your employees or independent contractors. John Doe claiming wrongful termination would be covered in this scenario, but a customer receiving a harassing comment from your staff would be excluded from the policy. In short, if you deal with vendors, clients, or anyone from outside your organization, you have a 3^rd party exposure. Certain classes of business are at a greater risk - think restaurants, bars, and retail.

To address this exposure, make sure your EPLI carrier includes 3^rd party claims. In this scenario the company would also have coverage with vendors, customers, service providers, or business invitees.

A comprehensive summary of the legal environment and coverage practices of EPLI can be seen for free in R&R Insurance’s Employer's Practices Liability Insurance by Brian Bean. The 80 minute video is an excellent introduction for the information seeking executive wearing many hats.

EPLI Increasing Need

The elephant in the room is increased media attention around sexual harassment. Every day it seems a new celebrity or high profile executive has an allegation brought forth. A cursory glance at the trending #MeToo on Twitter would suggest a growing movement to callout organizational harassment of women.

EPLI not only mitigates sexual harassment risk, but a wide range of trending risk in the employment process.

In the last 20 years America has seen a 12% uptick in individual charge filings with the Federal Equal Employment Opportunity Commission. While Race and Sex discrimination make up the majority of cases, they have only risen slightly in number going year by year. The largest percentage increase in discrimination cases since 1997 have been Age (24% increase), Disability (36% increase), Religion (55% increase), and Retaliation (57% increase).

It may be surprising that 41.5% of these complaints were filed against companies with less than 100 employees – and these numbers only count filings at a federal level.

Media attention and rising awareness should be a major concern for a business lacking proper EPLI coverage. Its cost, relative to other business insurance, is low and mitigates a financially disastrous risk to the company. Executives would do well to, at the very least, inquire about the proper EPLI coverage from their agent.

This effort should be combined with proactive harassment training for your employees along with and proper procedures to respond to a claim situation.

One of the challenges that businesses have in protecting themselves from cyber attacks is keeping up with patching vulnerabilities.  In 2017 we saw in both the WannaCry  and the Petya/NotPetya events how quickly malware can spread globally through un-patched, unsupported software.

This week, major computer design flaws have been identified.  Here is a good explanation from KnowBe4, Inc. of the issue:

"Computer researchers have recently found out that the main chip in most modern computers—the CPU—has a hardware bug. It's really a design flaw in the hardware that has been there for years. This is a big deal because it affects almost every computer on our network, including your workstation and all our servers.

This hardware bug allows malicious programs to steal data that is being processed in your computer memory. Normally, applications are not able to do that because they are isolated from each other and the operating system. This hardware bug breaks that isolation.

So, if the bad guys are able to get malicious software running on your computer, they can get access to your passwords stored in a password manager or browser, your emails, instant messages and even business-critical documents. Not good.

So, What Are We Doing About This?

We need to update and patch all machines on the network. This is going to take some time, some of the patches are not even available yet. We also may have to replace some mission-critical computers to fix this.

In the meantime, we need you to be extra vigilant, with security top of mind and Think Before You Click."

This impacts not only corporate computers and desktops, but also smartphones and internet servers.   Intel, Amazon, Google, Apple, Microsoft, Firefox have either released fixes or will be soon.