R&R Insurance Blog

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

Claims against employers are on the rise and business owners should explore employment liability if coverage is not already in place. Wrongful termination, discrimination and harassment claims filed against employers increased 23% between 2007 and 2008, and retaliation claims are up 30%.

Employment liability insurance is a product that continues to evolve as the economy changes. Within the last year, new plan designs for employment Liability insurance have included crisis management coverage, workplace violence coverage and network security.

For each Workers Compensation claim, an adjuster will open a file for the injured worker and set aside money specifically for the estimated cost of the claim.

Over the life of the file some money is spent and the remaining amount set aside is in "reserve". This reserve amount should represent the remaining cost of that claim.

Open Reserves
The dollars sitting in open reserves for your WC claims impact your Experience Modification. It is critical that these reserves be reviewed prior to the data being reported to the WC Rating Bureau.

If the actual cost of the claim will be less than the initial "estimated" cost, then the adjuster should lower the reserve. Lowering the reserve will help your Experience Modification.

When is the data reported?
Your WC carriers for the prior three years will report claim data to the WC Rating Bureau six months before your insurance renews. Open claim reserves should be verified prior to that date.

What is Equipment Breakdown?
Equipment Breakdown is Property coverage. It has a different title, but it is an extension to the Property form. In most Property forms you will find exclusions for losses due to steam boiler explosion, loss due to mechanical breakdown and loss due to electrical arcing (the latter is where I see the majority of claims). The intent of Equipment Breakdown is to fill those specific gaps (exclusions) for Property damage, business interruption, extra expense and consequential coverage.

Who has an Equipment Breakdown exposure?
Every insured has an exposure. If you use electricity, you have an exposure. A specific Property exclusion is "Loss due to electrical arcing." Without an Equipment Breakdown policy, if the power supply is lost because of a short, arcing, or a loose connection that causes the electrical main to disconnect or distribution of power to fail, there would be no coverage for the property damage, the interruption in your business, or the extra expense or consequential loss. If you had to temporarily relocate due to lack of power (which would affect your communication systems, heating, cooling, plumbing) there would be no coverage. Extra Expense on an Equipment Breakdown policy provides that coverage.

What Equipment Breakdown coverage is not is a maintenance policy. An example would be where rust and corrosion led to the demise of a gas fired heating blower. The unit had not been serviced in 10 years and thus no one knew that the unit was rusting away. Rust and corrosion are specifically excluded from coverage in the policy.

This question was posed by one of the LWMMI insured utility districts and the timing was perfect as the August 2009 issue of “The Municipality”, a publication of the League of Wisconsin Municipalities confirmed the response we provided. Here’s the response (slightly paraphrased) from “The Municipality”: Local governments are not subject to Occupational Safety and Health Administration (OSHA) regulations. But local governments are subject to state regulations which are at least as stringent as OSHA regulations. Although OSHA governs the private sector and federal agencies in Wisconsin, OSHA does not have jurisdiction over the state or local governments because the definition of “employer” under the OSHA Act of 1970 specifically excludes states and any political subdivision of a state. Instead, the State of Wisconsin has jurisdiction and sec. 101.055 of the Wisconsin Statutes requires that the Department of Commerce adopt, by administrative rule, standards to protect the safety and health of public employees. These standards must provide protection at least equal to that provided to private sector employees under OSHA standards.

Last week, I had a conversation with a business owner in Sheboygan about whether or not he should purchase the rental car insurance offered at the rental desk. Truly, the decision must take into consideration what is stated in your policy, and your agent should be able to answer that for you.

Most policies will cover physical damage to the rental car and liability coverage if you cause bodily injury and property damage to others. The two claims that are often NOT covered however are "Loss of Use" of the vehicle during the time of repair and "Diminution in Value" of the vehicle. When you think about "Diminution in Value," think if you pulled a CarFax report and it showed that 10K in repairs had been performed on the vehicle a few years back. Would you rather buy that vehicle or another without the damage although they look exactly the same? There is a dollar value associated with Diminution in Value that you could be on the responsible for if not covered by your policy. Loss of use is simply the loss of rental value to the rental business because the vehicle is in the shop getting fixed.

Next time, before you go on a business trip or vacation, be sure to determine what is covered and what it not. Ultimately, it's going to come down to your risk tolerance, but I still recommend that my clients take the insurance.

By the way, if you are told that you are covered for loss of use of diminution in value, I recommend getting it in writing.

Here are some top ten safety tips for rental cars:

• Don’t rent a vehicle larger than you can handle safely. If you are usually a subcompact driver, think twice before you rent a super-sized SUV or motorhome.
• Get acquainted with the controls. Look at the dashboard and steering column and locate lights, signals, horn, hazard flashers, windshield wipers and other essential controls. Make sure the controls are working correctly.
• Get the feel of the brakes before you need to use them.
• Check that the tires are inflated properly to prevent high speed crashes.
• Look in the trunk to see if there is a spare tire and a jack.
• If the vehicle has an on-board navigation system or emergency signal, make sure you know how it works.
• Ask for any special equipment such as a child seat, and make sure it is in good shape and functioning correctly.
• Figure out where you are going before you leave the car rental lot. Check the airport map and city map. Program the navigation system before you drive.
• For your own personal security, try not to look like a visitor in a rental car. Don’t leave maps where they can be seen from outside your car.
• Keep the vehicle windows up and the doors locked.

Prescription drugs are being misused and abused by a wide variety of people. According to SAMHSA, about 26 million Americans between the ages of 26 and 50 report they have used prescription drugs non-medically at some point in their life. Other age groups have lower lifetime incidents: 13 million who are age 50 or older, 9 million who are age 18 to 25, and 3 million who are 12 to 17 years of age.

Attached is a link to a Q&A with Michael Klein, Ph. D. about Combating Misuse and Abuse of Prescription Drugs - which I feel is relevant to the workplace as well. Having handled many workers compensation claims in a variety of jurisdictions including Kentucky and Wisconsin, drugs like Oxycontin and resulting addiction can undoubtedly impact a workers compensation claim in a negative way.

http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm220112.htm

The Wisconsin State Supreme Court says a brake maker wasn't negligent in a machinist's death.

Walter Tatera, a former Hales Corners machine shop worker, died of cancer in 2004. His estate sued FMC Corp., a Milwaukee brake manufacturer, alleging disks the company sent to Tatera's shop contained asbestos and caused his cancer.

A Milwaukee judge found the company was not liable or negligent in Tatera's death. A state appeals court last year, however, ruled FMC could be sued for negligence.

The Supreme Court reversed that ruling in a 4-3 decision. The court says FMC's conduct didn't amount to affirmative negligence.

Jill Rakauski, an attorney for Tatera's estate, says she's disappointed and believes the estate should be allowed to make a claim.