R&R Insurance Blog

With summer coming to an end and fall creeping in, most of us are planning to hunker in for the cold weather. For many, this becomes the perfect time to start a home renovation or home improvement project. According to Statistic Brain, in the next two years 26% of homeowners plan a bathroom renovation or addition and 22% plan a kitchen renovation or addition.

If you are planning to be a part of that percentage, we highly recommend keeping these tips in mind:

1. Consider how the renovation will impact the value of your home. Do you need to update your property insurance? With large increases to the value of your home, it’s important to be sure your insurance agent is aware.

2. When working with a contractor, be sure to get referrals from family and friends. Do you trust the person you’ll be inviting into your home day after day? Do they have a clean track record?

3. Check out the Better Business Bureau for additional contractor and subcontractor references. This is a great way to avoid surprises and ensure you’re happy with the quality of work at the end of the project.

4. Make sure your contractor provides proof of insurance. Ask to see their certificates and be sure that coverage will be in effect the entire time the work is being done. This will cover any damages, injuries, etc. that may occur.

5. Contact your knowledge broker at R&R prior to signing any contracts. Not keeping your insurance agent informed may leave you with claims that are not covered. At R&R, we are more than happy to walk you through contracts and answer any questions you may have before signing the dotted line.

Home improvements and renovations are an exciting time for any homeowner! Be sure to keep these tips in mind, or contact a knowledge broker for more information.

There are various reasons as to why a business may try changing their Work Comp policy effective date: matching your Work Comp policy to your fiscal year or Package policy, request by new ownership, or you’re trying to get out of the Pool. Before you start down this road, you should first be looking at the financial impact of making this change.

It’s never as easy as it seems! We worked with a client who changed their effective date in order to make issuing certificates of insurance easier. This ultimately cost them $100,000!

A regular timeline has the Wisconsin Workers Compensation Rating Bureau (WCRB) using 36 months of data to determine an experience MOD rate. However, when changing your policy effective date, the WCRB is able to use up to 45 months of data. Say you have had a year or two with costly claims, they will hang on longer due to this process. Remember: the higher the MOD, the more expensive the premium.

It must be noted: an Anniversary Rating Date (ARD) would not allow you to take advantage of a rate or rule change.
Say after looking at business analyses, claims review, and the financial impact of changing the Work Comp effective date, you determine this is the best scenario for your business. Once you begin the process of changing your Work Comp effective date, it will take five years to get back to a regular rating cycle. Not only is this a time consuming process, it could be a very costly process.

The R&R Resource Center works with businesses every day to proactively manage claims, ensure correct analyses are being performed on Work Comp insurance, and educate the pro’s and con’s of changing effective dates. The processes in place help ensure accurate data which ultimately saves you money. Contact us today for a review of your current Risk Management Program.

Nationally known attorney Steve Parrish, recently released an article on Forbes.com describing the dangers of selling your family business back to your family – and what it could potentially cost you. Like any sale of a business, the devil is in the details. What looks like a straightforward sale to a child can create unforeseen taxes and can spin the family into acrimony and discord.

In the article, Steve addresses the potential tax traps associated with an intra-family sale. One of the most crucial elements you, as a business owner, face is the ultimate distribution of your business. Will it be sold to a third party or family member, or will it be passed to a family member via a will or trust?

Typically, your business is the focal point or hub of the estate. You may have a somewhat distorted view of how the IRS would value it. At R&R Insurance, we offer a Business Valuation that will provide an analysis of the 5 methods most used by the IRS. This is a complimentary service provided to you.

Many businesses have not explored a Business Continuation Agreement. We also provide a complimentary service where a group of attorneys and CPAs will thoroughly review any documents you have. This same group of advisers will then put together the Business Valuation Plan.

In addition, R&R will provide you with an analysis of any insurance programs (both business and personal) that may support your continuation plan. Is the coverage set-up properly to avoid any unnecessary taxes? Is it performing up to the expectations from when it was purchased? These are all questions we can answer.

Please feel free to contact Pat or Tom Driscoll if you have any questions.

Fully understanding your organization’s Work Comp Experience Mod and OSHA DART Rate will not only help you achieve your desired outcomes for employee safety, but will also give you a point of reference for benchmarking against others in your industry. In addition, knowing your DART rate will help you prepare for a potential site visit from OSHA.

However, in order to better understand these you two variables, you need to first recognize the difference between the two. The following is a breakdown of their differences:

EXPERIENCE MOD

The Work Comp Experience Mod is a numerical expression of a company's accident and injury record compared with the average for the firm's industry. An organization’s e-mod is calculated using payroll and loss data for the oldest three of the last four years.

An experience mod of 1.0 means a company has an average safety record, while an experience mod of 0.80 means a company has a good safety record that merits a 20 percent discount. An experience mod of 1.20 means the firm's accident rate is above the industry norm and raises a company's costs by 20 percent.

DART RATE

OSHA’s 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.

As you can see from the breakdown above, the common denominator between these two variables is eliminating lost time injuries. R&R Insurance has multiple resources available for helping you understand as well as achieve your desired outcomes for both your Experience Mod and DART Rate. Contact a knowledge broker for additional information.

Take control of the health and productivity of your employees - and increase profit. WellCompForLife is R&R Insurance Services’ total solutions approach to that will provide your company with the tools to increase the life span and productivity of your employees - and ultimately your bottom line!

The top three driving trends impacting an employer’s bottom line are Obesity, Workplace Injuries and the Aging Workforce.

Addressing These 3 Corporate Burdens to Increase Your Profit

1. Obesity - Yes, That Means Lose The Weight
Findings show that obese workers were more likely to report occupational injuries, with a great frequency of strains and sprains, along with falls and overexertion injuries. Consider these statistics: A comparison of obese employees to normal weight employees: 50% more workers’ compensation claims, 13x more lost work days, 7x higher medical costs, 11x indemnity claim costs. And this is just the workers compensation part. The negative effects of obese employees on your health insurance costs are overwhelming. Diabetes, heart disease, chronic pain - can all be attributed in part to being overweight. That means you have to do something about it - employee wellness programs, fitness, healthy eating, lifestyle changes for your employees and their families.

2. Reduce Workplace Injuries: Reduce the injuries to reduce the work comp claims!

• Slip-and-fall injury prevention: ensure a safe working environment by maintaining parking lots and sidewalks; encourage employees to wear appropriate footwear for wet or slippery conditions. Make sure you have handrails at all stairwells and inclines/declines - special attention to this for your aging workforce.
• Ensure employees can meet the physical requirements of the job: consider a post-offer, pre-employment physical for new employees – be sure the physician covers medical history as it may reveal something not seen during the physical (the cost of the test would pay for itself when preventing a back or shoulder claim!) Pay special attention to your aging workforce for their physical requirements.
• Ergonomics enhancement: ask employees for suggestions on how their job can be tweaked to avoid fatigue or soreness; consider job rotation for repetitive tasks (also promotes cross-training!)
• Wellness programs to aid injury prevention: help prevent strains, sprains, and falls by improving flexibility, strength, and balance. Great examples is starting a flex and stretch program, cover part of a gym membership, or hold exercise classes like yoga, Pilates, or Tai Chi.Also, having a structured return-to-work program has several benefits, the most important of which is the reduction of lost-time (lost-time has 3 times greater impact on your workers compensation premium dollars than a no-lost-time claim).

There are literally dozens of ways to increase safety and reduce injuries at your place of work. If they aren't apparent to you, bring a knowledgebroker in - we'll take a look around and give you some pointers.

3. Address the Aging Workforce
Experts predict that by the year 2020, 25% of the US workforce will be 55 years or older. Couple this statistic with the fact that most people are working past the traditional retirement age of 65 and organizations need to pay special attention to this sector of the workforce.

On average, older workers are injured less frequently than younger workers. However when older workers are injured, it will be more severe and have a longer recovery time. See Preventing Injuries in an Aging Workplace.

R&R Insurance has found that if businesses address the health of their employees, reduce their number of injuries and keep a close eye on ways to accommodate the aging workforce, you will see a significant positive effect on your bottom line! WellCompForLife processes will increase the health and longevity of your employees and their families giving you a lot more control over your health and work comp insurance costs, all while improving the productivity of their employees. This is control business owners don't realize they have. At R&R Insurance, we call this program WellCompForLife!

Join the WellCompForLife discussion on LinkedIn!

For more information about WellCompForLife, contact a knowledgebroker today!

It’s happening more often and to more businesses, regardless of the size or type of business.

An email is received instructing the transfer of money. It appears legitimate—from the CEO, CFO, or trusted vendor with instructions to initiate a wire transfer. No red flags are raised. The money is wired but the email was fraudulent. Unsuspecting businesses are falling victims to what is essentially a modern day con job. According to the FBI, “companies across the globe lost more than $1 billion from October 2013 through June 2015 as a result of such schemes.” The Wall Street Journal reported on one such company, Mega Metals that lost $100,000. Mega Metals, Inc is a 30 year old company with 30 employees.

What should you do from a both a preventive and reactive standpoint?

The best scenario is one in which the attempted fraud is detected and stopped. Alert and educate your employees so that they can be on the lookout for these schemes. One of our carrier partners has published a risk management brochure, the Guide to Preventing Social Engineering Fraud, by Chubb Insurance. Here are some of their recommendations:

1. Never release confidential or sensitive information to someone you don’t know
2. Establish procedures to verify incoming checks and ensure clearance prior to transferring money by wire
3. Establish call-back procedures to clients and vendors for all outgoing fund transfers
4. Verify any changes to customer or vendor details
5. Be suspicious of unsolicited emails
6. Avoid responding to any offers made over the phone or via email
7. Be cautious in situations where a party refuses to provide basic contact information

If all of the loss prevention measures fail and your business becomes a fraud victim, is your business insured?

Even though most business policies contain an extension of coverage labeled “Crime Insurance” this is usually intended to provide a small limit of liability for Employee Dishonesty losses only. The good news is that insurance coverage is available from several carriers designed specifically to cover this type of loss.

These crimes are successful because they exploit human qualities of trust, helpfulness and fear to manipulate people. Even with proper precautions prevention may not be enough.

Download our free e-book, Understanding Cyber Liability Insurance, or contact a knowledge broker to ensure that coverage is in place should your business become a victim.

Are you aware of punitive damages? Do you know if they are excluded from your current insurance policy? Society Insurance recently released an article covering the basics of punitive damages and how not having the proper coverage can affect your business.

Society states that simply put, punitive damages are a monetary award given to a plaintiff for the sole purpose of punishing a defendant for wrongful acts. They are not awarded in every case; acting maliciously or having an intentional disregard for the rights of the plaintiff are reasons for such an award. Gross negligence is a factor.

Punitive damage awards are above and separate from normal compensatory damages a plaintiff receives such as medical bills, lost wages, pain and suffering, etc.

An article by the Milwaukee Journal Sentinel outlines a case in Wisconsin where a $100,000 award for punitive damages was upheld. It involved a restaurant customer finding hair in his steak that was put there intentionally by a cook. The lawsuit claimed the cook had done it before. The jury’s verdict was a punishment for the restaurant not taking corrective actions with the cook sooner.

Unfortunately for defendants, some insurance carriers have excluded punitive damages in their policies. To learn more about the proper coverage for your business, contact a knowledge broker at R&R.

For many business owners, premium audit paperwork, auditors, or phone calls to complete an audit occur annually. For those business owners with employees, this is a guarantee. Every year, like clockwork, you will be required to report your employee payroll to your Workers Compensation insurer. And if the audit isn’t complied with, the carrier maintains the right to increase the payroll on your insurance and charge additional premium for it.

So why does an audit have to be completed every year? In order to understand this, it is important to know what exactly an audit is. When you purchase coverage, especially Workers Compensation, you are providing an estimate as to the annual wage you think you may pay an employee, or your gross sales for that time period for General Liability coverage. Your premium for the year is then based on that estimate. When the policy term ends and the audit is completed, it is an evaluation of the estimated payroll vs. what was actually paid out, or the estimated gross sales vs. actual. So if the estimate at the beginning of the year was higher than the audited figures, you may be eligible to receive a refund. And if the estimate was a slightly low, additional premium will be charged accordingly.

The audit process helps insurance carriers determine the final premium for your policy based on actual exposures. It also helps the carrier determine that your business is classified correctly – taking into account all of your exposures and operations. In addition, it may help determine any potential gaps in your coverage for additional operations or exposures that may have come up throughout the year. It is a service that helps guarantee you only pay the premium you should be paying. The premium audit process is also a condition of the policy when you agree to purchase it – you give the insurance carrier the right to examine your books and records for audit purposes.

Whether it is a physical audit, a phone call, or paperwork to complete, the audit is designed not only to benefit the insurance carrier, but the client as well. Being charged fairly for your coverage is important and making sure that you are protected adequately is vital for the success of your business.

For more information on the premium audit process, contact a knowledge broker at R&R.

Cincinnati Insurance stated in a recent blog post that losses occurring on property you own can affect your livelihood and that of your tenants. They can also affect your insurance rates and eligibility. Without the proper controls in place, you could be saddled with the responsibility of owing for injury or damages that you did not cause.

Recognize the Risks

When you understand the risks you face as a property owner and lessor, you can better manage them. Consider these scenarios:

• Natural perils – A tornado sweeps through town, damaging your building and your tenants’ contents.
• Fire – A grease fire starts in a restaurant at one end of your building. Before it is extinguished, fire damages multiple units and tenant contents.
• Third-party injury or illness – A patron slips and falls in the parking lot, spraining her ankle.
• Change in occupancy – A restaurant replaces a retail store in one of your units. As a property owner, you want to determine if the current sprinkler system is able to handle the demands of a restaurant.
• Change in tenant operations – A retail craft store expands its operations to include pottery making. With this expansion, your tenant adds kilns to heat-treat ceramic projects.
• Vacancy – Your unoccupied building is vandalized, resulting in damaged property.

Review the Responsibilities

A well-designed lease agreement can assist owners in transferring responsibility for payment due to bodily injury or property damage to the legally responsible party. Consult with legal counsel when evaluating your current lease or other formal contract. When consulting with your attorney, consider whether your agreement:

• is signed by all tenants
• contains appropriate anti-subrogation wording and indemnification–hold harmless provisions favorable to you and acceptable under your state’s laws
• authorizes you to develop, change and enforce rules and regulations for the premises
• defines which areas you control and which the tenant controls
• defines the maintenance obligations of all parties while specifying the scope of the operations and the steps you will take if the tenant defaults on these obligations
• grants you the right to inspect the leased premises for conformance with the lease provisions concerning maintenance and to point out to the tenant any obvious hazards
• requires the tenant to obtain permission before performing any building alterations
• contains provisions regarding use of hazardous substances, dispensing of liquor and other activities that increase the risk of loss
• requires service contractors who come on your premises to provide certificates of insurance verifying adequate limits of insurance and appropriate state licenses, where applicable
• requires tenants to obtain specified liability insurance on behalf of the owner, with you listed as an additional insured on a primary basis. Make sure you obtain proof that the tenant has acquired and maintains all required insurance

Click here to read the full post by The Cincinnati Insurance Company, or contact a KnowledgeBroker at R&R for additional information.

Wisconsin statutes allow sole proprietors, partners or members to elect to cover themselves by a workers compensation policy. Officers of corporations (with fewer than 10 stockholders) are automatically included for coverage, but up to 2 officers may exclude themselves from coverage.

Before you decide to exclude yourself from workers compensation benefits, it is a good idea to check your health insurance and disability insurance policies to be sure a work-related exclusion does not exist. Policies are not uniform in how this language reads. Insurance policies will commonly exclude any loss that’s covered by workers compensation. Some will state that the exclusion does not apply if workers compensation is “available” or “payable” to you.

Workers compensation benefits not only pay for medical expenses but also income replacement in the event you are unable to return to work either on a short-term or long-term basis. Those excluding themselves from workers compensation may want to consider disability insurance in addition to health insurance to address both aspects of work-related injuries.

It is important to address this question with your health and/or disability insurance provider so any gaps in coverage may be addressed in advance. Once you are excluded (or have not elected to be covered) from the workers compensation policy, work-related injuries and illnesses will not be covered. It’s important to know how your health or disability policy will respond to a work-related incident.

Please contact your R&R Knowledge Broker if you have any questions or would like to discuss further.