R&R Insurance Blog

We have all found ourselves in the position of reviewing an MSB Building Valuation and comparing it to a building's current valuation on the policy. While the policy reflects the building valuation as replacement cost, the insurance policy actually responds providing a reconstruction cost. What’s the difference you ask?

Replacement cost is defined as the cost to construct or replace an entire building with equal quality and construction. A replacement cost does not include site improvements, demolition, debris removal, fees, premium material costs and other costs associated with the construction process. Replacement cost also assumes that current building material, design or layout will be available and used.

Reconstruction cost is defined as the cost to replicate the building, at current construction prices, using the like kind and quality materials, construction standards, design, layout and quality. The MSB reconstruction cost includes additional expenses related to repair and restoration contractors’ fees, the construction process itself, the location of the property, demolition costs and debris removal. These factors create a valuation that is higher than a new construction.

A cost provided by a builder for new construction will not include items provided for and included as property items within the ISO Commercial Property form (CP0010). The MSB Rating system is programmed with these additional costs.

If you have questions about your Commercial Insurance Policy, contact a knowledgebroker at R&R.

Does your organization desire the freedom of a self-funded insurance plan, but need a little more certainty for budgeting concerns? If so, level funding might be the answer to your employee benefits questions.

Level funding is an option that can coincide with a self-funded plan. With level funding, employers pay a set amount each month to a carrier. This amount typically includes the cost of administrative and other fees and the maximum amount of expected claims based on underwriting projections, as well as embedded stop-loss insurance.

Pros of Level Funding

• Do not need to pay premiums that are based on community rates
• Only pay the actual claims + administrative fee
• Money set aside each month to cover claims that is NOT used will be refunded at the end of the year from the surplus

Cons of Level Funding

• You will still need to pay the claims
• The administrative fees may cut into the savings you hope to gain from having a self-funded plan
• Many level funding plans restrict their offerings to companies with a certain number of employees

 

R&R Insurance has extensive experience in the world of employee benefits. We welcome the opportunity to discuss the pros and cons of level funding for your organization.

Information provided by Zywave, Inc.

We are frequently asked "Who is covered under our commercial general liability policy?"

Reading your commercial GL policy and determining who coverage applies to can be confusing. The list below will more clearly outline who your coverage applies to:

• Individual: Named individual and their spouse
• Partnership or Joint Venture: Named partnership, named joint venture, partners, members, and their spouse
• Limited Liability Company: Named LLC, members, and managers
• Organization (Corporation): Named entity, executive officers, directors, and stockholders
• Trust: Named trust and trustees

In addition to the list above, there may be others who are afforded coverage under your policy with differing circumstances. In order to determine any gaps, contact your KnowledgeBroker.

Is your organization taking advantage of the numerous ways to save money on health insurance? Are you looking to reduce your insurance premiums?

While there are numerous benefits to implementing and maintaining a robust wellness program, reducing the number of employees who smoke is an important piece of the wellness puzzle. Proactively providing smoking cessation programs will have a direct impact on your health insurance premiums. In addition, smokers commonly have longer recoveries from surgery and often need repeat surgeries which causes work comp claims to skyrocket on individual surgical claims.

The Charolotte Observer recently published an article with examples of doctors refusing to operate on those who smoke. According to research, one study found that smokers who got joint replacement surgery had an 80 percent higher chance than nonsmokers of needing repeat surgery because of complications from infection.

Click here to read the full article.

Are you looking to revamp or jumpstart a wellness program at your organization? Contact me to learn more about the resources R&R has available to assist.

Each year as the weather gets warmer, the bikes come out. So it's good to know the rules of the road for motorcycles and how to drive safer around them. Here are a few key points from this great article by Mike Rodgers:

• When making left turns, look for traffic...then look AGAIN for bikers
• Let them swerve and leave as much space as possible
• Stay back - rear ending a motorcycle is obviously much more dangerous than a vehicle
• Make a conscious note

Have fun and be careful out there!

Motorcycle Roads: Find routes, maps, rides and trips

Killboy.com: Motorsports photography taken from the Tail of the Dragon

Motorcycle Related Links

World's Worst Motorcycle Crashes

Discovery Channel Motorcycle Wipeouts

For Wisconsin residents looking for Motorcycle Insurance, Home and Auto Insurance, contact knowledgebroker Jeff Wolfgram.

While we all hope to avoid accidents or the need to report an insurance claim, it is important to understand the process if/when a situation occurs. Below are step-by-step instructions to help you navigate the road to reporting a claim.

1. Who: Who is involved in the claim? Obtain names, addresses and phone numbers of those actively involved.
2. What: What happened? Write down details while the event is fresh in your mind, and avoid listening to other's statements as they may be misleading.
3. Where: Where did the claim happen? On your premises or somewhere else that you performed the work? On what street, in what town, etc.?
4. When: When did the claim happen? Document the time of the accident. When did you do the work for the claimant?
5. Additional Information: Was anyone hurt (be sure to document their name)?  Were the police contacted (number on police report, when it will be available)?  Do you have any photos, driver statements, or estimates for repairs that you can send us for when this is reported to the company?  
6. If this is a Work Comp Claim (injury while on the job): The employer will need to complete a 'First Report of Injury' form and get it to the carrier/agency.

For additional information about reporting a claim, contact your KnowledgeBroker. We are here to make the process as seamless and effective as possible.

Back in 2012, Coca-Cola was hit with a $24 Million distracted driving judgment. The plaintiff’s attorneys were able to successfully argue that Coca Cola’s cell policy for drivers was "vague and ambiguous." They also suggested that Coca-Cola was aware of the dangers but withheld this information from its employee driver, which led directly to the circumstances that caused the accident. The jury awarded $14 million in actual damages and another $10 in punitive damages to a woman hit by a Coca-Cola truck driver who was chatting on her cell phone.

Do you have a robust “fleet policy” in place? Are your employees aware of your expectations while driving? Do you periodically provide training to your employees who drive for business, whether in your company vehicle or in their own personal vehicle? If you answered no to any of those questions, you are exposed to a similar Coca-Cola fate.

Having and enforcing a “fleet policy” with a clear expectation on cell phone usage is vital to protecting your employees, the general public, and your company assets.

If you would like to see a sample fleet policy, please click here. It’s just one of the many resources that we share with our clients at R&R as a way of creating value.

Contact me if you would like to learn more about increasing the profitability of your company by proactively controlling risk exposures.

In an effort to align with national insurance rating, the Wisconsin Commissioner of Insurance is eliminating the “Anniversary Rating Date” effective May 1, 2017.  What does this mean for Wisconsin employers?  You no longer need to wait for your effective date to take advantage of new rates.

While the rate is one piece of the puzzle, other elements that play a vital role:

• How does changing your effective date affect your MOD?
• What are the short term policy cancellation penalties?
• What are the possible dividend implications?

While some of these answers remain to be seen, below are excerpts from the IIAW of Wisconsin in a recent article by Bernard Rosauer, President of the WCRB.

 

Anniversary Rating Date (ARD) Endorsement Withdrawal

The ARD change no longer requires the use of prior policy effective dates to govern the application of rates, rules and forms for workers compensation.

Without the ARD rule, nothing would prohibit an employer from cancelling a policy to take advantage of a recent rate filing decrease. The short rate penalty exists which acts as a deterrent to an employer who cancels. That penalty would likely substantially reduce, or complete eliminate, any “gains” to be had by the cancelling early to take advantage of the new, lower rates. Also, Wisconsin statute contains specific prohibitions for a carrier to cancel a policy except for issues such as nonpayment of premium, breach of the policy terms, fraud, and misrepresentation.

 

How Will the New ARD Rule Be Implemented?

The WCRB’s standard is to file changes on a new and renewal basis with a specific implementation date. For this particular item, this means that the ARD is eliminated for new renewal, and written policies effective May 1, 2017 and later.

Example 1

A policy is effective April 30, 2017 (one day before ARD is eliminated) and has an ARD of August 1, 2017. That August 1, 2017 ARD would still apply. When the renewal policy is written April 30, 2018, the rates in effect as of that policy effective date would apply for the full term of the policy.

Example 2

A policy is effective September 1, 2016. The rates effective October 1, 2015 apply until the September 1, 2017 renewal. The policy is cancelled and rewritten effective May 1, 2017. No ARD applies and the rates effective October 1, 2016 are applicable to the May 1, 2017 rewritten policy.

 

With complex and convoluted changes such as the ARD withdrawal, it is critical you have an agent with the analytical tools and capabilities to provide a full scope of the financial implications that can result from simply changing your effective date. R&R’s Work Comp Division is at the forefront of this change and can provide a thorough analysis to support your insurance decisions.

For more information, download the Anniversary Rating Date Road Map or contact your Knowledgebroker at R&R.

To illustrate the benefits of rebalancing an insurance program to strengthen wealth protection and better manage expenses, the following example presents a before-and-after comparison for one of our valued clients.

Steve and Julia are a couple in their late 50’s whose children have started promising professional careers and live independently.  They have two vehicles and live in a newly constructed home in Waukesha, WI.  They also have a second home in Minocqua, WI with a boat and boat house.  Both Steve and Julia serve on various boards and are active volunteers in their community.  Their previous insurance plan exhibited many of the typical patterns of overpaying and underinsuring for their homeowner, auto, valuables, boat and umbrella liability coverages.  Steve and Julia significantly improved their financial security while reducing their total premium 18% by rebalancing their program as follows:

Savings Opportunities:

• Move coverage from a national company to a regional company, to take advantage of the homeowners pricing in an area that is not subjected to the impact of coastal claims.
• Raise the deductible on their primary home to $1000, to match the deductible on their seasonal.
• Take advantage of loss prevention credits for a heat loss detection system and an automatic standby generator.
• Incorporate a 13% association discount related to Julia’s profession.

Coverage Improvements:

• Acquire full replacement cost coverage for their primary and seasonal homes with no cap.
• Increase “other structures” coverage in order to fully protect the boat house from loss.
• Combine their existing boatowners policy with their new package policy to improve coverage, which also reduces expenses and paperwork.
• Add identity theft, special personal property, and increase rental reimbursement coverage.

Contact Brandy Enger, Private Client Executive, to learn more about properly protecting your most valuable assets.

*Client names have been changed to maintain anonymity.

It’s not something that most people think about, but just like your business, NFL teams also have to purchase worker’s compensation insurance for their employees. And just like the benefits that are afforded your employees, football players are covered for lost wages, medical treatment, loss of earnings, etc.  

No doubt that the medical treatment for an injured NFL player could get to be quite expensive. But the concept of paying loss of earnings to a player beyond their normal playing years doesn’t seem to be sitting well with the owners of the Chicago Bears.

Click here for the article with additional information.

Benefits in Wisconsin are actually much richer. An employee injured in Wisconsin could continue to collect similar benefits for a lifetime, regardless of when they might have retired.

We will see how this all shakes out and whether or not it will have an impact on Chicago’s ability to sign players in the future.

Contact me with any questions about your Workers Compensation, and Go Pack in 2017!