R&R Insurance Blog

Liability claims often exceed the basic limits afforded by an average home or auto policy. These claims are covered by a personal umbrella liability policy. Personal umbrella liability insurance provides individuals and families with higher limits of liability protection that is excess over any personal automobile, and other liability insurance. Just think of it as an extra layer of coverage, like an umbrella over everything.

Personal umbrella coverage is designed to cover claims that arise out of the activities of a personal or family nature; these types of policies do not cover professional or business activities. Personal umbrella policies are intended for catastrophe-type claims. Not all policies are exactly alike, but in general, the purpose of a personal umbrella policy is not only to provide million dollar excess limits, but to broaden basic liability protection. To adequately protect the insured a personal umbrella policy will provide an additional amount of liability above the limits on the auto and home policy, but it will also provide coverage for some exposures that are not already covered on the insured’s underlying policy, and it will provide coverage for damages caused by slander, libel, defamation, detention, confinement, humiliation, invasion of privacy, wrongful entry and related allegations.

Personal umbrella liability is written with a minimum limit of liability of $1 Million, with higher limits available. The personal umbrella liability policy pays on behalf of the insured person the amount of damages for an occurrence (the accident) that results in the insured person’s obligation to pay for personal injury, or property damages.

If there is a covered liability claim under your auto or homeowners policy and the dollar amount of the judgment is greater than the coverage limits you have purchased on those policies, the umbrella provides the additional limits of coverage.

Is the policy expensive?
Fortunately, catastrophic events happen to very few people. That is why the cost of this type of coverage is very affordable. The average cost is about $150 to $200 a year. The pricing is based on the number of exposures you have (exposures are the number of vehicles you own, the number of homes you own, if you have boats, recreational vehicles, youthful drivers, etc).

How does it work?
You, or a family member living with you, are the cause of an auto accident resulting in serious injury to the driver in another vehicle and his young passenger. Both the driver and passenger have injuries. You are sued, determined to be at fault, and the judgment is almost $900,000. Your auto policy provides coverage in the amount of $500,000. If you had a personal umbrella liability policy it would pay the remaining $400,000. If you did not have a personal umbrella liability policy the $400,000 would come out of your pocket. And what if you did not have $400,000 available? Your assets would no doubt be used to pay the judgment.

You have friends over for a backyard party. Their 16 year old son, while diving into your pool, breaks his neck and is paralyzed. The judgment in the lawsuit is $1 million. Your homeowner’s policy provides $500,000 for liability and responds promptly by paying out the entire $500,000 liability amount. Again, if you have a personal umbrella liability policy it would pay the additional $500,000. If you don’t, you will be paying it out of your pocket! And if you don’t have $500, 0000 your assets would be most likely used.

You have a large yard and you use your ATV on your own property. One summer day your 35 year old neighbor hops on the back for a ride. He either falls off or jumps off hitting his head on a rock and suffers head injury. He never fully recovers. He is married with two young children and three years later he still isn’t able to return to his job and may never work again due to serious brain damage. The judgment is for $1 million. The policy covering your ATV has a liability limit of $300,000, leaving you with a $700,000 out of pocket amount to pay. If you have an umbrella policy it would pay the additional $700,000.

The answer is YES, you probably do need an umbrella policy. For most people $150 to $200 a year or $12 to $15 a month is worth their peace of mind.

What exactly are your assets?
• Home and Personal Property
• Automobiles, Recreational Vehicles, Boats, etc.
• 401k, College Savings, and Future Earnings

What is worldwide coverage?
A Personal Umbrella Liability policy has coverage for things that happen anywhere in the world. Some policies, such as an auto policy, have a territorial limit.

What is the defense coverage?
The policy pays for the cost to defend any claim or suit for damages because of personal injury, or property damage arising out of the occurrence which is covered by the policy.

The Occupational Safety and Health Administration (OSHA) has rolled out its new program, the Severe Violator Enforcement Program (SVEP) to identify employers with repeated, serious citations, and intend to subject them to increased, multi-worksite inspections and higher penalties.

According to OSHA, the SVEP will “focus increased enforcement attention on significant hazards and violations” by concentrating on employers that have demonstrated “indifference” to workplace safety obligations through willful, repeated, or failure-to abate-violations in four areas:

1. Fatality or catastrophe situations;
2. Industries that expose employee to the most severe hazards–among the “high-emphasis hazards” covered by the SVEP are falls, amputations, crystalline silica combustible dust, lead, and excavation and trenching;
3. Industries that expose employees to the potential release of highly hazardous chemicals;
4. Egregious enforcement actions.

Once an employer is selected for the SVEP, OSHA will undertake a number of enforcement steps including enhanced follow-up inspections, as well as inspections at other worksites of that same employer—potentially on a nationwide basis. The program includes new features that will allow OSHA to conduct more aggressive multi-worksite inspections against those employers that fall within the program, as well as a nationwide referral program and closer coordination with states having OSHA state plans.

"Higher penalties and more aggressive, targeted enforcement will provide a greater deterrent and further encourage these employers to furnish safe and healthy workplaces for their employees," said DR. David Michaels, OSHA Assistant Secretary of Labor.

In addition, the agency will be increasing civil penalty amounts under SVEP. OSHA said that companies can expect average penalty for a serious violation to increase from about $1,000 to an average $3,000 to $4,000. Future penalty increases would also be tied to inflation.

On Wednesday, May 5, 2010, Governor Doyle signed into law legislation (Assembly Bill 496) that will prohibit texting while driving in Wisconsin. The law will take effect on December 1st, 2010. Under the texting law, drivers cannot compose or send electronic messages such as a text or e-mail. Violations of this ban would result in fines of no less than $20 and no more than $400 for a first offense, and no less than $200 and no more than $800 for a second offense.

The ban does not apply to operators of authorized emergency vehicles or the use of a global positioning device. It also doesn't apply when the use of a voice-operated or hands-free device is used to text messages. Wisconsin joins 24 other states, including Minnesota, Iowa, Illinois and Michigan, that have already passed bans on texting, according to the Governors Highway Safety Association. Listing of laws by state.

There are new products and apps being developed that can be effective tools to help stay focused while driving and keep everyone safer. Here are a few that we've found:

www.key2safedriving.net
Establish profiles that won't allow calls or texts when a bluetooth device detects a car in motion.

www.aegismobility.com
Uses phone's GPS to determine if it's in a moving vehicle, logs incoming calls and texts and responds with a message that you're driving.

www.zoomsafer.com
Enables you to dictate text messages and update social-networking sites while driving.

We also suggest, especially for those parents who have teen drivers, that you simply turn the phone off you when get into the car.

"Better to be safe than sorry." This is normally a good philosophy to live by. But when it comes to filling out your company OSHA 300 log, this is one time where that rule can cost you.

Unfortunately, many of the people assigned to fill out the OSHA 300 log on behalf of their company haven't been the beneficiaries of any formal training. The OSHA log may have been thrown on their desk and because of that, they operate by the philosophy that if I send it into workers' compensation, then I'm going to also put it on the OSHA 300 log. This can result in over recording and inflated incident and severity rates - which could have serious consequences for your business!

The incident rate and severity rate (or DART rate) are two formulas that OSHA uses to measure workplace safety. Safety professionals will use these numbers as a benchmarking tool to compare accident rates for companies nationwide in the same industry – regardless of company size. These rates are an equalizer of companies of all different sizes because it's based on total hours worked in the company.

Incident rates are determined by taking the number of OSHA recordables (taken from the 300 log at the end of the year) multiplied by 200,000 divided by the total number of hours worked in your company - both by employees and temporary employees.

The DART Rate, which is an acronym for Days Away or Restricted Time, is a measure of accident severity. It counts the number of cases in the calendar year in which a company had an employee away from work due to an injury or who was working under restrictions due to a work injury.

Knowing the above information, let's take a look at a real-world example of a company who was operating with the "better safe than sorry" mentality and how it could have affected their chance to bid on a new piece of business.

CASE STUDY:

We received a phone call from a painting contractor who needed our help because they had to calculate their incident rate in order to bid on a job - it was a requirement of the bid.

In looking at their OSHA 300 log, this painting contractor had 8 incidents recorded in the calendar year. The problem was that they had only worked 90,000 hours that year. Using the formula explained above, we calculated their incident rate at 17.8. This rate was 4 times the national average for painting contractors. For companies or general contractors looking to hire this painter, this is a serious red flag and could likely be a deciding factor in determining if they get the work.

Based on years of experience, our first thought was that they didn't complete the OSHA 300 log properly.

We sat down with this contractor and went through each of the 8 cases on their OSHA log in detail. It turns out that in 3 of those 8 cases, the people never even went to the doctor - which means it shouldn't be on the 300 log. We also noticed a few other inaccuracies. So, when finished, there were only 2 legitimate injuries that should have been entered on the OSHA 300 log. We made the necessary corrections and recalculated their incident rate to be a legitimate 4.44 - which compares very well with the national average of 4.0 for painting contractors.

This new incident rate is something a potential customer or general contractor would feel much more comfortable with, as opposed to the incident rate of 17.8, which would be alarming.

If you're over reporting on your OSHA 300 log, your company can end up with excessively high frequency and severity rates, which can draw the wrong kind of attention. Typically, if OSHA sees a company with a high incident rate, they would be concerned that the company is not controlling the work place. They, along with potential customers, see it as an out-of-control injury situation.

Do you know if your OSHA 300 log is filled out correctly? Are you over recording? What you don't know could be costing you.

Contact us today to set up an appointment and learn how our risk management and loss control experts can help you. If you're interested in learning more about the OSHA 300 log, consider attending one of our OSHA 300 Webinars.

There is often confusion over the similarities between the policy for Pension and Welfare Fund Fiduciary Responsibility Insurance and the Employee Benefits Liability (EBL) endorsement for the Commercial General Liability Coverage portion. Although some coverage duplication exists in the area of administrative errors and omissions, the thrust of the two forms is different.

The EBL endorsement was designed primarily to provide coverage for administrative errors and omissions for a large variety of benefit plans. The Fiduciary policy form was designed to cover ERISA (Employee Retirement Income Security Act) exposures of fiduciaries for specifically designated plans to the extent that they are caused by a “wrongful act”. Fiduciary Liability vs. Employee Benefits Liability Tip Sheet.

Here's a common question we get; “I am supplied a car by my employer and am permitted to use it for both work and pleasure. My employer told me that I need to get my own insurance to cover me when I use the car off duty. How can I do that under my personal auto policy?”

The answer: The Personal Auto Policy has an exclusion that states that there is no coverage for the use on a vehicle furnished or available for your regular use. Thus, when driving the employer-owned company vehicle there is no coverage under his personal auto policy. This would be the same if the spouse or another family member used the company vehicle. This is a little known gap in all personal auto coverage, but a very common situation.

Normally, the policy written in the name of the business would protect the employee, but in this case the employer told the employee he was not protected off duty. This being the case this person has a huge gap in coverage.

The answer is to add an endorsement to the personal auto policy referred to as the Extended Non-Owned Coverage for Named Individuals to the personal auto policy. Each person in the family should be named in the endorsement if there is any chance they would drive the company vehicle.

This endorsement will fix the gap in coverage when an employee is furnished an auto for this regular use (or even has one available for his regular use out of a pool of vehicles). But note this is only for Liability coverage and there is not going to be any physical damage coverage for the vehicle.

If the company won’t add the extended non owned endorsement (or a similar one) to the personal auto policy or can't add it, the next option would be to buy a Named Non Owned policy to fill the gap in coverage. In effect, this accomplishes the same thing as the Extended Non Owned Coverage for a Named Individual but may be more expensive.

There are other examples when you would want to add the Extended Non Owned Coverage for a Named Individual. For example your neighbor might have an extra vehicle that they allow you to use whenever you need it, or a student in college who has the use of a room mate’s vehicle.

Here is another scenario: You don’t own a vehicle and don’t have a personal auto policy, but you do have a company vehicle to use. You then borrow someone’s auto and have an accident. There is no coverage under your company car policy. Here are the two solutions to fix that gap in coverage. #1 have the company amend their commercial auto policy to add the Drive Other Car Coverage endorsement or buy a Named Non Owner policy for yourself.

There are some other reasons that someone who has a company vehicle would want to add the Extended Non Owner Coverage for a Named Individual onto their auto policy even when the business auto policy extends protection to the employee, and that is that the limit of liability must be shared with the named insured (the employer). Or, the employee may not feel comfortable with the liability limit on the business auto policy, or may not have faith that the company will keep the coverage in force or keep the liability coverage at the same level. Many times the employee who has this company vehicle isn’t in any type of a position where they would even know if the company policy would cover them.

Another sound reason for any employee who drives a company owned pickup, van or larger truck on the job to have Extended Non Owned protection is that fellow-employee suits are becoming more common. This is, an increasing number of courts are allowing one employee to sue another (at fault) employee for injuries sustained in the course of employment. The employee’s personal auto policy excludes business use of a truck and the employer’s policy excludes bodily injury to a fellow employee. Thus, the employee is left without protection under either policy. The simplest way of coverage for this exposure is endorsing the employee’s policy with extended non owned coverage.

These are all great reasons why having the advice of a good, professional independent insurance agent can be invaluable!

The OSHA 300 log, formally known as the "Log of Work-Related Injuries and Illnesses", is used to classify work-related injuries and illnesses and to note the extent and severity of each case. The log itself is really a listing of employee injuries, and any contract or temporary employee injuries that happened during that calendar year. So, if you have temps working for you and they are injured at your work place, you are required to put that on your OSHA 300 Log.

The OSHA log differs from workers' compensation loss runs in that the OSHA log goes on a calendar year basis. Your work comp policy may go from July 1st to July 1st, but the OSHA log is always on a calendar-year basis.

If everybody has Workers' Compensation Loss Runs why do we have to do OSHA record keeping?

The short answer: Because OSHA says so.

The long answer: OSHA wanted a consistent way to track and measure injury rates throughout the country for various industries - the OSHA log allows them to do that. OSHA wants to capture the injury data from all the different companies in the U.S. They don't simply rely on workers' compensation records because workers' compensation laws vary from state to state and there can be differences in the individual laws - what's considered an injury, how much is paid, etc. But, with OSHA record keeping, it's supposed to be consistent from state to state across America. This is important because it allows OSHA to look at a company in Georgia and very directly compare it to a company in California, as far as injury rates are concerned.

What must be put on the OSHA 300 log?

Cases must be logged on the OSHA 300 Log if:

• There is a death
• Days away from work
• Job transfer or restriction
• Loss of consciousness
• Other recordable case

Most of these are easy to make a determination on. The one that is open for a lot of debate is the "other recordable case." We can tell you from experience, that if a company is skimping or putting too much on their OSHA 300 log, most of the time it's due to the "other recordable case" and how a company decides to interpret some of those standards that OSHA has set for this category.

It's important to know which companies are required to fill out the OSHA 300 log, what you should be putting on your log and why putting too much on your log can really hurt you. We will discuss all of these issues in upcoming blog posts. Be sure to check back frequently, or subscribe to our RSS Feed to automatically be updated on when new articles are published.

OSHA 300 Log Free Webinar:

December 14, 2010
January 20, 2011

Contractors working on pre-1978 homes must be trained and certified by April 22, 2010 under the EPA’s lead rule. Wisconsin's Lead-Safe Renovation Rule, DHS-163.

Who Must Follow the EPA’s Lead Rule Requirements?
In general, anyone who is paid to perform renovation work that disturbs paint in housing and child-occupied facilities built before 1978. This may include, but is not limited to:

• Residential rental property owners/managers
• General contractors
• Special trade contractors, including
  - Painters
  - Plumbers
  - Carpenters
  - Electricians
  - Window replacement contractors

Because renovation is broadly defined as any activity that disturbs painted surfaces, anyone who is compensated for most types of repair, remodeling, and maintenance activities must comply.

Handout from webinar on May 5th.

Employers have begun to analyze how the recently passed health care reform legislation affects the benefits they provide to their employees. While the scope of the legislation is broad, the implementation timeframe for different aspects of the rules is spread over a number of years. Some provisions of the law go into effect this year while others are not effective until as late as 2018. Employers need to understand what to focus on now, and develop a plan for dealing with additional changes coming over the next few years.

With this in mind, we are pleased to announce, in conjunction with our network partner Assurex Global, a webinar specifically designed to allow you to gain a greater understanding of the overall components that make up this new legislation.

This session will focus on the areas of the health care reform rules with the most direct impact on employer sponsored benefit plans. Particular attention will be paid to areas employers must address in 2010 and 2011. Participants will be able to submit questions to the presenter during the session and we plan to make a Q&A available to participants that will cover additional topics and questions that we are not able to address during the webinar. The session will cover these issues and more:

• What must employer health plans change in the next 12 months including; children covered to age 26, lifetime and annual maximum limits, changes to pre-existing limitations for children and more.
• What is a grandfathered plan and what changes apply to them?
• What should employer start to think about now regarding major changes that go into effect in 2014?
• Changes to FSA, HSA, and HRA reimbursement rules
• New W-2 reporting and employer notice and when they are effective
  Employer full-time employee coverage requirement and penalties for not providing qualifying coverage
• State run insurance exchanges for small employers and individuals

Our presenter for this webinar will be Bob Radecki. Bob is currently a Principal at the HR Consulting firm of W.J. Flynn and Associates, and has more than 25 years experience in the HR and employee benefits industry helping employers deal with difficult benefit and compliance matters. Previously, Bob founded and served as President of A.E. Roberts Company, a nationally recognized compliance consulting and training firm. He has served as the principal HIPAA consultant to a number of health insurance companies, and is recognized as a leading expert on a variety of benefit compliance issues including COBRA, FMLA, Health Reform and more. Bob has been the featured speaker at numerous industry events and conferences, and has published a number of articles concerning various compliance issues.

The recently enacted federal health reform legislation contains provisions for health insurance expense tax credits for small businesses. A qualifying employer must have less than the “equivalent” of 25 full-time workers. Employer eligibility rules, how to calculate the full-time equivalent workforce, amount of credit, how the credit is calculated, how to claim the credit and other important concerns were covered in this 60 minute Webinar hosted by Peter Frittitta, Vice President, Benefits Practice at R&R Insurance Services.

Key elements from the webinar:

• Presentation Slides (PDF)
• Quick & Easy Example #1: LMNOP Company: 18 Employees: 12 FT, 6 PT, 1 owner
• Quick & Easy Example #2: XYZ Company: 31 Employees: 11 FT; 20 PT; 2 owners
• 3 Simple Steps Qualification Form - IRS Small Business Tax Credit Guide