R&R Insurance Blog

New research shows that employers are seeing an increase in internal crimes, ranging from fictitious sales transactions, the theft of office equipment and retail products meant for sale to customers, and payroll checks for phantom employees being transferred electronically to an employee’s bank account.

Employers suspect that workers are pilfering from them to cope with financial difficulties at home or in anticipation of being laid off. And it seems that no one is immune from this crime: churches, manufacturers, retail and service organizations have all found it necessary to report an employee theft claim.

There’s never been a better time than now to take another look at your employee theft insurance coverage. Your commercial property policy most likely covers loss by theft, but not if the theft is committed by an employee. Crime insurance is necessary to protect you from this loss.

Employee theft coverage protects the employer from theft of money, securities or other tangible property of the employer. It’s important to note that limits of insurance are not cumulative, meaning if the embezzlement takes place over several years, you can’t add the policies together. Therefore, it’s important to make sure the limit on today’s policy is high enough to cover your loss.

Talk to a knowledge broker today to discuss employee theft coverage, or to request quotes on higher limits. You may be surprised to learn how affordable it is!

One of the best articles I've read about certificates was published by the Independent Insurance Agents and Brokers of America. It addresses many of the off-the-wall requests that insureds and their agents see every day. These requests have become demanding, confusing and at times very expensive, if not impossible, to fulfill. This article explains clearly what is uninsurable, inappropriate, inpractical and/or illegal. Our agents deal with this issue daily and are ready to answer your questions and share their knowledge with you and your staff. We'll help you make sense of certificate requests!

In my constant effort to keep on top of all the current statistics regarding our aging population and how long term care insurance can benefit them, I came across this interesting study done by MetLife. Here is the synopsis, again all credit for information goes to MetLife:

Since 2007, the MetLife Mature Market Institute (MMI) has conducted a series of studies to better understand the Baby Boomer cohort — the population born 1946–1964. The MMI study, Boomers in the Middle, examines those of the Baby Boomer cohort born 1952–1958, and who will be 52–58 years old in 2010. Building on the MMI’s Boomers: Ready to Launch and Boomer Bookends studies, which examined the Oldest Boomers born in 1946 and Youngest Boomers born in 1964, this national survey establishes baseline data on Middle Boomers in financial, family, social, and retirement planning aspects of their lives.

• More than half of Middle Boomers still have children living at home, and about half have grandchildren. Two-thirds have at least one parent still alive, making them a good example of the proverbial “sandwich generation.”
• More than 60% of the Middle Boomers are working full-time with 68% of men and 53% of women in this category. Another 8% are working part-time, 6% are self-employed, and 5% are looking for work. An additional 7% are on disability, and 8% are fully retired.
• Most Middle Boomers describe themselves as being in good health, but at the same time are concerned about being able to afford health care costs in the future.
• Middle Boomers would like to retire at age 65 but do not think they will be able to do so until age 66, not a great difference in view of the economic turbulence they have experienced. Their plans to do so have not changed in the last two years despite economic challenges. They expect the largest portion of their retirement income (42%) to come from Social Security benefits, with another third from 401(k) and defined contribution plans.
• Middle Boomers on average plan to take their Social Security benefits at age 65, well before they are eligible for full benefits, between ages 66 and 66 and 10 months. About one in five plan to apply for benefits as early as age 62. Almost one-quarter anticipate applying for benefits at a later date than they had originally planned; 69% have not changed their plans, and 6% are planning on an earlier than planned application.
• The vast majority are homeowners (86%) with an average home value of $272,600. Fifteen percent would consider using a reverse mortgage for retirement income funding.
• More than half of the Middle Boomers feel that they are behind in their retirement savings, while about one-third feel they are on track or have already achieved their financial goals, about equal to the Youngest Boomers.
• About one-third expect an inheritance from their parents, averaging $181,000, while another 21% have already received an inheritance averaging about $120,000.
• Seventy-two percent have been providing financial assistance and support to their grown children and grandchildren averaging about $38,000 over the past five years.
• Almost two-thirds of Middle Boomers like the term “Baby Boomer” to describe themselves, a somewhat smaller percentage than the Oldest Boomers and larger percentage than the Youngest Boomers’ affiliation with that generational description.

Click here for the full report.

The American Association for Long Term Care Insurance suggests the following tips that can help you significantly reduce the cost of insurance coverage.

1. Leverage Your Good Health:Insurers will require you meet certain health qualifications to obtain coverage. Discounts are provided to those in good health and 62% of applicants between ages 40-49 qualified in 2009. The percentage drops to 46% for ages 50-59 and only 38% for ages 60-69. Once obtained, the preferred health discount is not lost when your health changes. In short - the younger you buy, the healthier you are, the less expensive it will be on an annual basis.
2. Right-Size Your Coverage: Some long term care insurance is always better than none. Factor in other sources of income such as Social Security, pension and 401k plans that can pay costs and allow you to add money-saving options such as a 90-day deductible (elimination period) or consider a limited-pay plan with a Shared Care option that allows two spouses to share a common benefit pool.
3. Compare Coverage: Each insurer established it's own rates, health standards and available discounts. As a result, virtually equal protection from two highly-rated insurers can vary between 30% and 80%. Make sure your insurance professional has access to policies from more than one carrier (R&R has access to multiple long term care insurance providers).

For more questions on long term care insurance, contact our Certified Long Term Care Specialist Jane Shevey at jane.shevey@rrins.com or call her - 262-953-7123.

A fleet of any size (simply the use of vehicles in a company or organization), is an exposure which can generate losses for the organization in all four categories: property, human resources, liability and net income. Risk managers recognize the importance of well-designed and properly implemented fleet safety programs. The new twist is that new technology and ever-changing laws require these plans to be reflective of these changes and dynamic for each individual organization.

In 2008, there were 37,261 motor vehicle fatalities and almost 2.5 million injuries in the United States, generating a more than $231 billion dollars in damages. Occupational fatalities associated with highway incidents in 2008 totaled 1,149, or about one in four of all occupational fatalities.

Every organization that uses vehicles in any manner should enforce a fleet safety program that at the minimum contains these components:

• Driver Qualification and Training
• Motor Vehicle Record (MVR) review
• Vehicle Inspection & Maintenance
• Tracking, Monitoring & Documentation

Driver Qualification and Training
Most organizations require basic state licensing and may elect to impose minimum requirements for age and experience of drivers for certain applications such as product load, people transportation etc.

Training drivers in defensive driving techniques and other fleet safety topics can be accomplished through online programming, behind-the-wheel coaching, and classroom instruction.

MVR Review
Regular evaluation of MVRs is a standard component in fleet safety programs. For MVR review to be successful, employers must consider exactly what records will be evaluated, and how they will guide employment and driving assignment decisions.

The MVR monitoring process can be outsourced to companies that provide background screening services for new and existing employees. These services monitor activity associated with fleet drivers and immediately notify fleet managers of any negative activity associated with an employee driver.

Vehicle Inspection and Maintenance
A comprehensive program for regular safety inspections and mandatory maintenance and repairs for fleet vehicles is an extremely important part of a fleet safety program that is often overlooked.

If any claim were to go to litigation, a defense attorney could take full advantage of any evidence indicating a delay in important safety precautions such as tire replacement or brake repair. Therefore, it’s not only important to stay on top of all vehicle maintenance requirements, it’s also essential to keep accurate records of maintenance and repair schedules in case it needs to be proven in court.

Tracking, Monitoring & Documentation
New technologies such as Global Positioning Systems, Ignition Interlock Devices and the onset of extensive mobile device usage has increased the need for close monitoring, highly documented policies and knowledge of the law.

Tracking Location
Global positioning systems (GPS) installed in vehicles can provide fleet owners with many useful tools to not only manage vehicle utilization, but also operational safety. These systems can measure and communicate the exact location and vehicle speed on a real-time basis to a central point. For an organization that must maximize efficiencies to survive, control speeding and other misuse of their vehicles, GPS technology used to monitor the actions of employees behind the wheel can be an important new tool to compliment a fleet safety program.

Ignition Interlock Devices
Another area of technology that is impacting fleet management policies is the use of ignition interlock devices (IIDs) by drivers convicted of DUI. These devices require the driver to blow a sample of their breath through the device before the vehicle’s ignition will start. IIDs can be court ordered for an employee convicted of DUI. The question for business owners and fleet managers is whether to allow IID installation in a company vehicle to accommodate a legal requirement imposed on an employee. It is important for fleet owners to understand the laws, and plan ahead for how they will respond to an IID order for one of their employees.

Mobile Devices
One of the most significant new challenges for fleet safety programs is managing the use of mobile devices on the road. The use of cell phones and other portable devices for talking, texting, email, social networking, and navigation while driving is now commonplace, especially among younger drivers.

The National Highway Transportation Safety Administration (NHTSA) indicates that drivers engaged in texting while driving increase their chance of being in an accident by 23 times. A troublesome reality for fleet owners is how easy it is to prove that a driver was texting at the time of an accident, due to the precise time stamp assigned to every message. These distractions must be considered and addressed in every company’s updated fleet safety policy. Every fleet owner must evaluate the communication needs of their drivers, device policies, and the law to manage that risk appropriately.

Business owners and fleet managers face a intimidating task to develop and implement fleet safety programs that comply with applicable laws and reduce risk to their property, their people and their profitability. A successful fleet safety program for your organization begins with a tailored plan that addresses the specific needs of your organization and then remains flexible enough to respond to changes in technology and the law.

Recent heavy rains have overburdened sewer systems, causing raw sewage to back up into drains in homes throughout the country. Backed up sewers can wreak havoc on a home, causing thousands of dollars in damage to floors, walls, furniture and electrical systems.

Sewer backups or the inability of sump pumps to handle runoff water from major downpours are not covered under a typical homeowners insurance policy, nor are they covered by flood insurance. A Sewage Backup endorsement must be in place in order for this type of claim to be covered. Sewer backup coverage is available from most insurers for a nominal cost—usually an additional annual premium of $40-$50.

For homes that have been severely damaged and are uninhabitable, homeowners policies may provide Loss of Use coverage, which provides reimbursement for lodging, food and other living expenses you may incur as a result of having to live outside of your home. Loss of Use coverage also reimburses you for the lost rental income if you rent out part of the house.

Causes of Sewer Backup

Aging Sewer Systems: The Civil Engineering Research Foundation reports that the number of backed up sewers is increasing at an alarming rate of about 3 percent annually. In addition, a recent report from the American Society of Civil Engineers indicates that the nation's 500,000-plus miles of sewer lines are on average over thirty years old. The increase in the number of homes connected to already aging sewage systems has also contributed to rapid increases in sanitary sewer backups, flooded basements and overflows.

Combined Pipelines: Problems also arise in systems that combine storm water and raw sewage into the same pipeline. During many rain storms, the systems are exposed to more volume than they can handle, and the result is a sewage backup situation that allows sewage to spew out into basements and other low lying drains.

Blockages Due to Tree Roots: Shrubs and trees seeking moisture will make their way into sewer line cracks. These roots can cause extensive damage. They may start out small, getting into a small crack in the pipe; but as the tree or shrub continues to grow, so does the root. Tree roots can enter the service pipe at joints and cause blockages. Tree roots can travel a long way, and roots from different types of trees act differently. If city trees are suspected, your plumber can contact the city, and samples of the roots will be used to help identify the trees and who is responsible for cleanup. Sometimes the blockage is a result of a combination of city and private trees. In this case costs are split between the city and the property owner.

Sanitary Main: A blockage can occur in a city sanitary main. If the blockage is not detected in time, sewage from the main can back up into homes and businesses through floor drains. Usually this happens slowly, giving the owner time to call a licensed plumber to assess the damage. If water is entering into your basement at a rapid rate, call the city public works office and report the problem immediately.

Water in Basement: Most basement flooding is not related to the sanitary sewer system. In many cases, soil settles adjacent to the building and, if not corrected, leads to rainwater flowing towards the building and down the outside of the foundation wall. This is particularly true in older buildings, where cracks may have developed in the foundation or floor slab that allow water to enter the basement. The cement floor and basement walls of these structures may have deteriorated to the point that they are no longer waterproof. In these cases, water can show up in a basement that has never had a water problem. This will usually happen after a number of rain storms, when the ground is saturated. Drainage can be improved by making sure that water drains away from the building. Owners may also be able to prevent flooding by water sealing the basement.

Most homeowners may not realize that they are responsible for the maintenance and repair of their house or sewer lateral—the pipeline between the city sanitary sewer main, usually located in the street—and the building. The sewer lateral is owned and maintained by the property owner including any part that extends into the street or public right of way. A cracked or deteriorated lateral or one filled with tree roots can allow groundwater to seep into the system, contributing to the problem.

How to Prevent Backups In Your Lateral and in the City Main

Dispose of Grease Properly: Cooking oil should be poured into a heat-resistant container and disposed of properly, after it cools off, not in the drain. Washing grease down the drain with hot water is unsatisfactory. As the grease cools off, it will solidify either in the drain, the property owner's line, or in the main sewer causing the line to constrict and eventually clog.

Dispose of Paper Products Properly: Paper towels, disposable (and cloth) diapers and feminine products can cause a great deal of trouble in the property owner's lateral as well as in the city main. These products do not deteriorate quickly, as bathroom tissue does, so do not put them down the drain or toilet.

Replace Your Line with New Plastic Pipe: One way to prevent tree roots from entering your line is to replace your line and tap with new plastic pipe. If you have continuing problems with tree roots in your lateral, you may have to have the roots cut periodically.

Correct Illegal Plumbing Connections: Do not connect French drains, sump pumps and other flood control systems to your sanitary sewer. It is illegal, and debris and silt will clog your line. Consult a plumber to correct any pre-existing illegal connections. French drains are common drainage systems, primarily used to prevent ground and surface water from penetrating or damaging building foundations.

Install a Backwater Prevention Valve: A backwater valve is a fixture installed into a sewer line, and sometimes into a drain line, in the basement of your home or business to prevent sewer backflows. A properly installed and maintained backwater valve allows sewage to go out, but not to come back in. Property owners are responsible for the installation and maintenance of backwater valves. The cost to install one depends on the type of plumbing in the building and the difficulty of installation. Check with a qualified plumber.

What to Do If You Experience a Sewer Backup

A sewer backup can lead to disease, destruction of your valuables, damage to your house or business, and can even result in electrical malfunctions. Prompt cleanup of affected property can help minimize the inconvenience and prevent mold or further damage. If you experience a sewer backup situation, immediately arrange for the cleanup of your property. This should include:

• Wet-vacuuming or removal of spillage
• Mopping floors and wiping walls with soap and disinfectant
• Flushing out and disinfecting plumbing fixtures
• Steam cleaning or removing wet carpets or drapes
• Repairing or removing damaged wallboard or wall covering
• Cleanup of ductwork

Don’t let a sewer backup be a drain on your home or finances; make sure to have the proper coverage.

How to File a Claim

For insurance purposes, take before and after photos of the affected areas and itemize any property losses. Save all receipts related to repair, cleaning or damages and contact your insurance agent or company representative as soon as possible.

Information obtained from Insurance Information Institute

1. Cooperate in setting up the appointment. If the Loss Control Consultant has to make several calls, it sets up a poor first impression.
2. Provide enough time to do the survey. Ask how long the Loss Control Consultant needs to adequately cover all the questions.
3. Provide multiple contacts if necessary.The Loss Control Consultant can get more details from someone more closely related to the issue. Examples: Your Quality Control Director can handle the Products Liability part of the survey; your Maintenance Manager can handle the Property questions/tour; your Traffic Manager can handle the questions on the fleet. Make sure that the additional contacts understand the value of the loss control visit and the importance of the information being relayed. Your additional contacts should beon the same page with you.
4. State all of the positives about your organization, your programs,your efforts. You may want to make some basic notes to make sure you talk about any positive things you are doing.
5. Be open to suggestions made during the visit. If you react negatively to suggestions, the report may label you as “uncooperative”.
6. Have materials ready that you know will be needed such as a property diagram, vehicle list, sprinkler testing info. etc. Showing that you value and respect their time goes a long way.
7. If there are any questions that you can’t answer during the visit, be sure to get the answers and relay them as quickly as possible. An answer of “I don’t know” is seen negatively in their eyes.
8. If there is a weakness that has not been addressed or cannot be explained, it is good to ask for help. Carriers see this as a company who is “cooperative” and they like to partner with these companies.

See Questions you can Expect on a Loss Control Visit.

According to the Insurance Information Institute (III), dog bite claims cost insurers about $387.2 million in 2008. Here are some other interesting facts:

• The Centers for Disease Control and Prevention estimate that dogs bite 4.7 million people annually, resulting in 800,000 injuries that require emergency medical attention. Almost half of them are children.
• The average cost of a dog-bite insurance claim was $24,461 in 2008, according to the III.
• According to The Humane Society of the United States, roughly 39 percent of American households have at least one dog.
• Dog owners in 33 states and the District of Columbia are legally liable for deaths or injuries caused by their dogs.

With all this said, here are some things you should know about dogs, dog bites and how to avoid them.

Common "Vicious" Breeds Some Insurers May Not Cover
Some home insurers have lists of breeds and crossbreeds they will not insure; other insurers consider such breeds on a case-by-case basis, or charge more for certain "biting" breeds such as pit bulls.

• Pit bulls
• Rottweilers
• Chow chows
• German shepherds
• Siberian huskies
• Alaskan malamutes
• Doberman pinschers
• Presa Canario bulldogs
• Great Danes
• Boxers
• Akitas
• Wolf-hybrids

History is Considered
Some companies will ask "Do you own a vicious dog?" on home insurance applications. Previous dog-bite incidents will show up on your claims history, which insurers check before issuing a policy. Some insurers will consider whether an attack was provoked or unprovoked, but it depends on the dog's history.

Some insurers may cancel or refuse to renew an existing home insurance policy, decline your application for a new one or attach an exclusion for the dog to the policy — if your dog has even one attack in its history. The exclusion means the insurance policy would not cover any liability claims caused by the dog, making you personally responsible for any medical bills or lawsuits stemming from your dog's actions.

Prevention is Key
About 50 percent of dog bites occur on the dog owner's property. The best way to make sure your home insurance won't get cancelled is by preventing an attack. Spaying and neutering a dog can improve its disposition, especially with male dogs.

• Don't put your dog in situations where it will be threatened or teased.
• Build a fence around your yard or install a dog fence around you property to contain its location.
• Send your dog to obedience school.
• Hire a certified animal trainer.

If There's A Bite
If your dog bites someone, respond immediately. Restrain or confine your dog right away. Then do whatever you can to help the victim, whether that means calling 911 or driving them to the emergency room.

Once the victim is taken care of, you might have to contact the local authorities to report the dog bite. You should then call your home insurance company, especially if there are medical costs involved. Be sure to cooperate with your insurance company. The claims adjuster will no doubt want to investigate the circumstances surrounding the incident.

Take steps to make sure a similar incident doesn't happen again.

As a general rule, if an employee is terminated for cause, the obligation to pay workers compensation benefits continues. Similar to a layoff, or the employer’s inability to provide light duty work, a termination is viewed in much the same way. The injured worker is still considered to be restricted in the general labor market due to the injury, until he or she reaches maximum medical improvement, or is released to return to work without restrictions. *See Brakebush Brothers Inc. and Employers Insurance of Wausau vs LIRC 1997.

However, in recent years, the Wisconsin Department of Workforce Development has expanded their scope of potential situations where benefits may be suspended as the result of termination.

Here are a few exceptions:

1) The employee's employment with the employer has been suspended or terminated due to the employee's violation of the employer's policy concerning employee drug use during the period when the employee could return to a restricted type of work during the healing period. Compensation for temporary disability may be denied only if prior to the date of injury the employer's policy concerning employee drug use was established in writing and regularly enforced by the employer.

2) The employee's employment with the employer has been suspended or terminated due to the employee's alleged commission of a crime, the circumstances of which are substantially related to that employment, and the employee has been charged with the commission of that crime. If the employee is not found guilty of the crime, compensation for temporary disability shall be payable in full.

3) The employee has been convicted of a crime, is incarcerated, and is not available to return to a restricted type of work during the healing period.

The exceptions listed above all make good sense as it relates to benefit cessation. Without those exceptions, the employer’s insurance carrier is obligated to continue benefits. This also reduces or eliminates the circumstances whereby an employer terminates a worker simply to circumvent the payment of benefits.

Here are some topics that are generally covered in a loss control visit. If there are any questions you can't answer during the visit, be sure to get the answers and relay them as quickly as possible. An answer of "I don't know" can be taken negatively.

Operations:

• Detailed Description of Operations
• Any subcontracted work to others?
• Are certificates of Insurance obtained?
• Any significant changes in management or operations?

Fleet/Automobile:

• Number and type of vehicles used
• Radius of operations
• Maintenance of vehicles

Exposures and Controls:

• Type of equipment or machinery used in operations
• Machine guarding adequate?
• Are material handling exposures managed?
• Any ergonomic issues?
• Height, slip and fall or confined space issues

Employees/Hiring:

• Total # of employees – full time/part time/average age
• Source of employee hire
• Employment physicals or drug testing
• Annual turnover
• Any previous layoffs or future potential for layoffs?
• Average wages / Average tenure
• Health benefits
• Early return to work / type of program in place