Protect Yourself Before Disaster Strikes

Tornados that have recently devastated parts of the Midwest could pop up anywhere. While there is generally little to no warning before these storms strike, there are some steps you can take to protect your family and your home from disaster.

1: Construct a safe room

Homeowners living in an area known for tornados should consider a safe room, which is built to withstand wind speeds of over 250 miles per hour. Usually, a safe room is located in a central, ground-floor area of the home for additional protection as well as accessibility. To find out more about safe room plans, check out the Federal Emergency Management Agency at www.fema.gov.

2: Reinforce the garage

Most residential tornado damage starts when wind enters through the garage, so you should make sure your garage doors are reinforced.

A qualified contractor can determine if the garage door system is able to resist high-speed winds and, if necessary, replace it with a stronger system. If your garage doors are more than eight feet wide, you should consider installing permanent wood or metal stiffeners.

3: Install impact resistant doors and windows

If you are replacing your patio doors or building a new home, consider installing impact-resistant doors made of laminated glass, plastic glazing or a combination of plastic and glass.

Likewise, if you’re thinking about replacing your home’s windows, be sure to install impact-resistant windows.

4: Remove clutter from the yard

Keeping your yard free of debris can also help to minimize storm damage. Prune weak branches and remove trees that could fall on your house. If you use gravel or rock landscaping material, consider replacing it with mulch.

Minimizing Pollution Liability for Truckers

Motor carriers (or “truckers”) are vulnerable to severe and costly auto accidents due to the size of the loads they often carry. These accidents may result in injury or death to occupants of other vehicles or pedestrians, or they may cause significant property damage. Even more ominous is the possibility of environmental damage caused by the release of dangerous substances that are part of the trucker’s cargo. Federal law regulates how these firms must meet their financial obligations for these accidents.

Congress enacted the Motor Carrier Act of 1980 to deregulate the trucking industry. In addition, the law established minimum limits of liability insurance coverage that certain motor carriers must carry. The coverage must apply to claims for bodily injury, property damage and environmental restoration arising from accidents that occur while the carrier’s vehicles are transporting property. The limits required vary by the type of property the carrier transports and whether or not the carrier operates for hire. For-hire carriers of non-hazardous substances must carry limits no less than $750,000; for-hire and private carriers of certain hazardous substances must carry at least $1,000,000, while other carriers must carry at least $5,000,000.

Unfortunately, standard policies for truckers are inadequate to meet these obligations. A trucker’s insurance policy typically does not cover liability arising out of the escape of pollutants that the insured is transporting. The policy will cover the insured’s liability for damage caused by fuel or fluid leaks from a vehicle’s systems and pollution damage arising from some vehicle maintenance, but this limited coverage does not meet a trucker’s obligations under the MCA.

The MCA, in addition to the minimum limit requirements, mandates that truckers have a special endorsement (form MCS-90, Endorsement for Motor Carrier Policies of Insurance for Public Liability) attached to their policies. This endorsement obligates the insurance company to pay for the trucker’s public liability regardless of whether or not the policy describes each motor vehicle and whether or not a regulator permits the trucker to serve that particular route or territory. The form defines “public liability” as including bodily injury, property damage and environmental restoration. “Environmental restoration” means restitution for the loss, damage, or destruction of natural resources arising out of the accidental release of any commodity transported by a motor carrier on the land, atmosphere, watercourse, or body of water. It includes removal costs and the cost of necessary measures to minimize damage to human health, the natural environment, and animals.

The MCS-90 endorsement does not expand the trucker’s policy’s pollution coverage; in fact, it requires the trucker to reimburse the insurance company for payments it makes that the policy would not require if not for the endorsement. To avoid having to make a large reimbursement to the company, the trucker should ask the company to add another special endorsement to the policy. The endorsement, titled Pollution Liability – Broadened Coverage for Covered Autos, reinstates coverage for the insured’s liability for the release of pollutants that the insured is transporting. Coverage does not apply to liability that the trucker assumed under a contract. However, the additional coverage brings the trucker into compliance with the MCA’s requirements and eliminates the possibility that the trucker will have to reimburse the company for losses.

Due to the potential for very large losses from pollutants, the number of insurance companies willing to offer this endorsement is relatively small. Motor carriers subject to the MCA’s requirements should work with insurance agents who have expertise in this area. They will be familiar with the coverage needs of trucking firms and may represent insurance companies that insure truckers.

Minimizing Pollution Liability for Truckers

Motor carriers (or “truckers”) are vulnerable to severe and costly auto accidents due to the size of the loads they often carry. These accidents may result in injury or death to occupants of other vehicles or pedestrians, or they may cause significant property damage. Even more ominous is the possibility of environmental damage caused by the release of dangerous substances that are part of the trucker’s cargo. Federal law regulates how these firms must meet their financial obligations for these accidents.

Congress enacted the Motor Carrier Act of 1980 to deregulate the trucking industry. In addition, the law established minimum limits of liability insurance coverage that certain motor carriers must carry. The coverage must apply to claims for bodily injury, property damage and environmental restoration arising from accidents that occur while the carrier’s vehicles are transporting property. The limits required vary by the type of property the carrier transports and whether or not the carrier operates for hire. For-hire carriers of non-hazardous substances must carry limits no less than $750,000; for-hire and private carriers of certain hazardous substances must carry at least $1,000,000, while other carriers must carry at least $5,000,000.

Unfortunately, standard policies for truckers are inadequate to meet these obligations. A trucker’s insurance policy typically does not cover liability arising out of the escape of pollutants that the insured is transporting. The policy will cover the insured’s liability for damage caused by fuel or fluid leaks from a vehicle’s systems and pollution damage arising from some vehicle maintenance, but this limited coverage does not meet a trucker’s obligations under the MCA.

The MCA, in addition to the minimum limit requirements, mandates that truckers have a special endorsement (form MCS-90, Endorsement for Motor Carrier Policies of Insurance for Public Liability) attached to their policies. This endorsement obligates the insurance company to pay for the trucker’s public liability regardless of whether or not the policy describes each motor vehicle and whether or not a regulator permits the trucker to serve that particular route or territory. The form defines “public liability” as including bodily injury, property damage and environmental restoration. “Environmental restoration” means restitution for the loss, damage, or destruction of natural resources arising out of the accidental release of any commodity transported by a motor carrier on the land, atmosphere, watercourse, or body of water. It includes removal costs and the cost of necessary measures to minimize damage to human health, the natural environment, and animals.

The MCS-90 endorsement does not expand the trucker’s policy’s pollution coverage; in fact, it requires the trucker to reimburse the insurance company for payments it makes that the policy would not require if not for the endorsement. To avoid having to make a large reimbursement to the company, the trucker should ask the company to add another special endorsement to the policy. The endorsement, titled Pollution Liability – Broadened Coverage for Covered Autos, reinstates coverage for the insured’s liability for the release of pollutants that the insured is transporting. Coverage does not apply to liability that the trucker assumed under a contract. However, the additional coverage brings the trucker into compliance with the MCA’s requirements and eliminates the possibility that the trucker will have to reimburse the company for losses.

Due to the potential for very large losses from pollutants, the number of insurance companies willing to offer this endorsement is relatively small. Motor carriers subject to the MCA’s requirements should work with insurance agents who have expertise in this area. They will be familiar with the coverage needs of trucking firms and may represent insurance companies that insure truckers.

FTC Says Credit Scores Are a Valid Risk Predictor for Auto Insurance

A report issued by the Federal Trade Commission (FTC) says that credit scores are an “effective predictor” of risk when underwriting auto insurance. The study titled, Credit-Based Insurance Scores: Impact on Consumers of Automobile Insurance, confirms what industry professionals have always believed, that credit-based insurance scores provide an objective and reliable tool for determining which drivers present a greater risk and should therefore pay higher rates.

Insurance companies have always tried to correlate premium rates as closely as possible to the actual cost of claims. This practice helps insurers stay competitive and keeps them from hemorrhaging money. The majority of consumers also benefit from this correlation because they are not subsidizing people more likely to file claims than themselves.

Credit information has been used for a number of years to help underwriters decide whether or not to accept insurance applications. Developments in information technology have led to the creation of insurance scores, number rankings based on a person’s credit history, which give insurers a far more accurate way to assess the risk of future claims.

Statistically, people with a poor credit history are more likely to file claims. Insurance scores are used to help underwriters differentiate between lower and higher insurance risks, which enables them to charge a premium appropriate for the level of risk assumed.

However, some in the insurance industry oppose this technique because they feel credit scores don’t always present an accurate picture of a person’s credit history. Credit scores don’t reflect the good payment records of consumers who pay their bills in cash. Credit scores may also provide an incorrect image of consumers who normally have good credit, but have been negatively impacted by one-time unexpected events, such as medical emergencies.

Despite these instances, the FTC report says the use of credit-based insurance scores provides benefits for consumers.Evaluating credit scores allows insurance companies to calculate risk with greater accuracy. This enhanced capability may make them more willing to offer insurance to higher-risk consumers for whom they would otherwise not be able to determine an appropriate premium.Using credit scores also may make the process of granting and pricing insurance quicker and cheaper, cost savings that can be passed on to consumers.

Avoid Lawsuits When Laying Off Workers

With the U.S. economy in recession, companies are trying to make up for declining sales by reducing expenses. Workforce reductions, though they may improve short-run profits, may also cause long-term problems if the firm does not handle them with care. Angry former employees may look for justification for legal action. The employees who remain will take on extra work with no additional compensation, while they deal emotionally with the loss of colleagues and fear that the job cutting will eventually hit them. Consequently, companies must approach layoffs with caution.

The company must first determine whether a layoff is the best option. While it may quickly reduce costs, it may also cause the company to dismiss valuable workers. This will hurt long-term productivity, lower the morale of the survivors, and wipe out valuable institutional knowledge. There is also a risk that a layoff will unfairly affect older or minority workers, which could lead to discrimination complaints. Therefore, the company should look at alternatives such as hiring and wage freezes, adjustments to employee benefits, not replacing workers who leave or retire, and job sharing.

If the company decides that it must reduce its workforce, several careful steps are required;

 

  • Establish a specific goal for the layoff to achieve, such as a dollar amount of savings or number of positions.
  • Identify those job functions and skills that it will need to operate successfully after the layoff.
  • Set a timetable so that the reduction has a clear end.
  • Comply with federal and state labor laws.
  • Determine which jobs are unnecessary and eliminate them.

When determining which employees to dismiss, the company may legally use criteria such as length of service with the company, the necessity of a certain job classification, employee status (i.e., part-time or temporary), or employees’ performance records. Management should review candidates for dismissal to ensure that the cutback does not disproportionately impact classes of employees protected by law. If managers can find no other compelling business reason for terminating those employees, they must seek out alternatives.

Once managers have made selections and the decision to proceed, they must inform the affected workers in a professional manner. They should be able to clearly explain the reasons for the action; workers’ entitlement to benefits such as severance, health coverage, and others; and post-employment services available to the workers, such as outplacement. The workers may express emotions ranging from stunned silence to rage; the managers must be prepared to deal with their reactions in a businesslike manner. Remaining employees will have concerns about their own futures and the firm’s outlook. Management should, to the extent possible, explain the reasons for the layoff, the likelihood of additional job cuts, and the business goals the firm seeks to achieve through the layoffs.

The company must take particular care when the layoff involves older employees. Severance packages usually require the employee to waive his right to press a claim under federal law. However, regulations impose procedural requirements that an employer must meet before a court will consider the waivers valid. Companies must take special care to meet those requirements.

Shrinking a company is an unpleasant prospect that no manager relishes. Employee lawsuits may well result from a workforce reduction. However, if the firm handles the action with care and sensitivity, it can make such claims less likely and will be in a better position to defend itself against claims that do arise.

Does Your Homeowner’s Insurance Cover a Stolen Cell Phone?

You just realized your cell phone has been stolen. Not only are you out the cost of the phone, but more than likely, the thief is placing hundreds of dollars of charges on your phone bill right now.

As people increasingly rely on cell phones, this type of loss is becoming more common. In fact, a recent Better Business Bureau report indicated that an estimated 600,000 cell phones will either be lost or stolen this year. Unfortunately, a homeowner’s policy probably won’t be of much help in protecting you in this unfortunate event. Here’s why.

The most popular homeowner’s policy, the HO-3, provides the broadest coverage. It insures you for direct physical loss to all personal property described in Coverage C, as long as the loss was caused by a covered peril and not specifically excluded. The theft of the phone is considered a direct physical loss of property, but not the thief’s subsequent use of the phone. Unlike charges made on a stolen credit card, which have limited homeowner’s insurance coverage via a separate “Additional Coverage” grant, there is no such grant for unauthorized cell phone charges.

Here’s how to protect yourself from cell phone theft and fraudulent charges:

                    Keep as close watch on your cell phone as you would your wallet or purse. Be mindful of where your phone is at all times and be careful about who you lend it to.

                    Password-protect your phone. Read the user guide that came with your phone to find out how to “lock” your phone or enable the “password” feature to prevent a thief from making unauthorized calls.

                    Call your cell phone provider as soon as you realize your phone is missing. Be sure to keep detailed records, including the date and time you called your carrier, the name and ID number of the representative to whom you spoke, and what instructions you were given.

                    File a police report. This is an official record of the theft and your carrier may require you to provide a police report number when you report your missing phone.

                    Ask your carrier to open an investigation. If your phone company isn’t working to resolve the situation, request an investigation. This should stop collections agencies from taking action, as well as delay the reporting of non-payment of charges to credit bureaus.

                    Contact the Federal Communication Commission. The agency will forward your complaint to your service provider and mandate that they respond within 30 days. You can log on to http://www.fcc.gov/cgb/complaints.html to file a report.

                    Contact your state attorney general’s office. They handle complaints about cell phone fraud, in addition to disputes about contracts. Find your state attorney general by logging on to http://www.naag.org/ag/full_ag_table.php.

                    Contact your state’s public utility commission. You can find your state’s commission by logging on to the National Association of Regulatory Utility Commissioners web site at http://www.naruc.org/displaycommon.cfm?an=15.

Attitude Adjustment: Change Employee Behavior to Reduce Injuries

Despite common belief, the majority of workplace injuries are not caused by unsafe conditions, but rather employee behavior. These “misbehaving” workers often overestimate their physical limits and make unsafe choices—such as lifting a 300-pound piece of equipment without assistance.

When DuPont conducted a study of all its workplace accidents over a 10-year period, they discovered that 96% of the incidents resulted from employees working beyond their limits. A 2006 Liberty Mutual Workplace Safety Study showed that more than 50% of all workplace injuries were a result of overexertion, falls, twisting the wrong way and other such “behavioral” accidents. These injuries led to an estimated $46 billion in annual worker’s compensation costs.

The OSHA factor

Considering these eye-opening statistics, it’s obvious that workers need an on-the-job attitude adjustment. Some believe the industry should turn to The Occupational Safety & Health Administration (OSHA) to reverse this disturbing trend. Unfortunately, OSHA may not be the solution.

Although the organization has acted as the watchdog for workplace safety for the past 30 years, OSHA generally focuses on making the workplace safer as opposed to changing employee behavior. After all, it’s a lot easier to modify a facility or repair a piece of machinery than it is to change the way a worker thinks and acts. Plus, many employers are wary of opening their doors to OSHA in fear that the organization will become overly involved in their every day affairs.

Taking charge

Because OSHA doesn’t seem to be the answer, it looks like employers are on their own when it comes to changing employee behavior. That means business owners must take the initiative to educate employees and cut down on preventable workplace injuries.

Here are a few steps employers can take to cut back on “behavioral” accidents:

  • Appraise the situation: Take a closer look at past employee injuries that have occurred in your workplace. If you notice any patterns or trends, it’s time to make significant changes in that area. For example, if most injuries occurred when employees were attempting to carry heavy boxes, focus on teaching workers to safely move boxes with the assistance of another worker or a forklift.
  • Get supervisors on board: Ensure that your front line supervisors make injury prevention a top priority. Not only should they constantly enforce safety guidelines, but they also need to raise awareness throughout the ranks.
  • Work as a team: Workplace injury prevention requires plenty of teamwork. Make sure that all your employees understand the importance of working together and keeping an eye out for their fellow workers.
  • Create incentive programs: Consider offering your workers special rewards for sustaining a safe workplace. For example, let workers know that if there are no injuries within a 6- or 12-month period, they’ll be rewarded with a party, gift certificates or even an extra vacation day. This will give them greater incentive to make safe choices on a daily basis.
  • Hire the right people: Try to employ safety-conscious, reliable workers who are genuinely concerned with injury prevention.
  • Train your workers: Without the proper education and training, workers cannot be expected to perform their jobs safely. Ensure that all your employees are well-trained in safety guidelines and offer refresher courses each year.

Changing human behavior is no easy task. It will take loads of time and hard work to change your employees’ ways, but it will be well worth the effort in the long run. If you can successfully adjust your workers’ attitudes, you’ll enjoy lower insurance premiums, more productive workers and fewer injury-related absences.

You may even be eligible for inclusion in OSHA’s Safety and Health Achievement Recognition Program (SHARP). This program recognizes small businesses with an exemplary safety and health management system. If you receive this prominent recognition, your worksite will be exempt from programmed inspections as long as your SHARP certification is valid.

Minimize the Likelihood of a Homeowner’s Insurance Non-Renewal or Rate Increase

Almost three million households have lost their homeowner’s insurance since 2003 according to a 2007 national telephone survey conducted on behalf of Trusted Choice and The Independent Insurance Agents & Brokers of America.  Two-thirds of the households that lost coverage were located in the South. Only half of the non-renewed households said they were able to find other coverage.

As part of the current study, respondents were asked about changes they’ve made since 2003 to secure their home in the event of a natural disaster. Overall, a mere 28 percent of households indicated they have taken steps to secure their homes. Even in the South, where the threat of hurricanes is an annual occurrence, only 31 percent indicated that they had secured their homes.

The survey results also showed that about 35 percent of all American households had experienced a homeowner’s insurance rate increase in the previous 48 months. Twenty-two percent of the respondents answered that they had received anywhere from an 11 to 25 percent rate hike, while 13 percent said that they had received more than a 25 percent increase.

Trusted Choice offers the following tips to lessen the possibility of non-renewal or rate increases:

·   Monitor your claim activity – Insurance companies track how many and what type of claims you file. Frequent claim activity, no matter how small, can impact your rates and chance for renewal.

·   Stick with one insurance company – An insurance company is more inclined to look past an item on your claims record if you are a long-term customer. Changing insurance companies on a regular basis makes it difficult to build a relationship with an insurer.

·   Bundle your coverages – Keeping your homeowner’s and auto policies with one insurer makes you a more attractive customer. An insurance company may think twice about dropping your homeowner’s coverage if it may mean losing your auto insurance business, too.

·   Review your deductibles – Make sure that your deductible isn’t so small that you will be submitting every potential claim for payment, nor so large that it will cause financial hardship in the event of a loss. 

·   Home improvements help – Your home’s wiring, plumbing, heating and roofing should be in good repair at all times. At least twice a year, walk through your home and inspect it for developing problems.

·   Know a house’s claim history before you buy it – Ask for a disclosure report, which can be obtained from your real estate agent or the seller’s agent. Insurance companies will be wary of a home with previous structural or water-damage claims.

·   Consult your insurance agent – Working closely with an agent may be the easiest way to stay insured affordably.  And they will be your advocate when you have a claim or other problem. 

Curtail Workers’ Comp Costs in a Tough Economy

Workers’ compensation costs are always a concern for employers—but in today’s tough economy, employers should be more watchful than ever. As financially stressed employees grow increasingly worried about their money problems, many are preoccupied and less attentive on the job. This can greatly increase the risk of an injury. Plus, when employees become anxious about potential layoffs, workers’ compensation claims may increase as workers look for a way to maintain their income.

This is precisely why employers need to take every possible measure to rein in workers’ comp costs right now. Here are a few steps you can take to make sure employees stay happy and claims don’t mushroom out of control:

Open the lines of communication

Everywhere they turn, employees are hearing bad news about the economy. Consequently, workers are growing increasingly anxious about their job security and financial well-being. Now more than ever, it is absolutely critical for employers to keep the lines of communication open with their worried employees.

However, while it’s important to give workers the morale boost they need, it’s also important to be truthful. Don’t sugar-coat a bad situation. Studies show that employees who work for employers who are truthful, fair and supportive have lower levels of stress, anxiety and depression.

Research also shows that workers trust their immediate boss more than the company’s senior leaders. Therefore, direct supervisors should offer their employees plenty of support right now and immediately address any widespread anxiety or rumors.

Keep a close watch on claims

Although employers should always meticulously monitor claims, this becomes even more vital in a rough economy. That’s because many workers may attempt to abuse the system when they are feeling financially stressed.

As you scrutinize the amount and type of claims being filed by your employees, keep an eye out for suspicious trends or patterns. This may help you identify potential abuse. If you suspect any type of exploitation, report it immediately.

Give employees the right title

If your company has recently gone through lay offs or experienced a reduction in workforce, some workers may have changed positions or taken on additional responsibilities. If this is the case, ensure that your employees’ job classifications are up-to-date.

Encourage good health

Companies with wellness programs, fitness opportunities, nutritious food choices and other health-related perks have healthier, more productive employees. Healthy employees are less likely to suffer from illness or injury—which means they are less likely to miss work.

This is why it’s so important to adopt some sort of wellness program for your employees and establish a relationship with a qualified occupational medical provider. Find physicians who follow ACOEM (American College of Occupational and Environmental Medicine). Although they may be more expensive, it’s well worth the cost. These experts will take time to understand your company’s needs and ensure your workers stay healthy, productive and on the job—which will save you untold amounts of money in the long run.

Educate your employees about finances

In our current economic downturn, many of your employees are likely struggling to manage their finances. They don’t know where to turn for financial advice and expertise.

To relieve some of their stress, consider sponsoring office workshops and classes about financial matters like reducing credit card debt, investing wisely, securing a home loan and saving for college. This will give your employees the financial guidance they need while ensuring that they stay happy and productive on the job.

 

In any economy, whether it’s up or down, one thing is always clear: every day a worker is off the job, the employer loses money. Although you may be focused on other company problems right now, such as a reduced workforce, dwindling budgets and a decrease in sales, it’s important to maintain your focus on workers’ compensation issues.

Try to cut back on illnesses and injuries with a wellness program and other health perks. If an employee is injured, do everything possible to return that worker safely to the job as quickly as possible. After all, the longer an employee is out of work, the more difficult it is to get him back to work—and the higher the price tag for the employer.

Thorough After-Flood Cleanup Minimizes Mold Growth

If you and your home are the victims of a flood, your cleanup must be thorough to ensure that mold growth is eliminated to the greatest extent possible. You should completely dry wet structures as soon as possible after the event. However, while you want to act quickly, approach the cleanup process carefully, to avoid the mishaps and accidents that can occur in the less-than-safe environment that a flooded home can be.

The following tips, courtesy of the Kansas Department of Health and Environment, can help you to thoroughly clean up while protecting your own health and safety:

• Keep children and pets out of the area until you have completely cleaned it.

• Wear rubber boots, rubber gloves and goggles during cleanup.

• Discard items that cannot be washed and disinfected, including mattresses, carpeting, carpet padding, rugs, upholstered furniture, cosmetics, stuffed animals, baby toys, pillows, foam rubber items, books, wall coverings and paper products.

• Discard drywall and insulation that has been contaminated with sewage or flood water.

• Clean all hard surfaces such as flooring, concrete, molding, wood and metal furniture, countertops, appliances, sinks, and other plumbing fixtures with hot water and laundry or dish detergent.

• Use fans, air conditioning units and dehumidifiers to help dry the area.

• Wash your hands with soap and water after you have finished cleaning. Use water that has been boiled for one minute and then cooled. You can also disinfect water for personal hygiene by creating a solution of household bleach mixed with water.

• Wash all clothes worn during the cleanup in hot water and detergent, separately from uncontaminated clothes and linens. Use a self-service laundry for washing large quantities of clothes and linens until your onsite wastewater system has been professionally inspected and serviced.

• Get immediate medical attention if you become injured or ill.

If you need to turn off the main power and have standing water inside your home, remember to do so only when you are in a dry location. If you must enter standing water to reach the main power switch, call an electrician to turn it off. Never use an electric tool or appliance to turn off power while standing in water. Be sure the electrician checks the house’s electrical system before turning on the power.

If the house has been closed up for several days, enter only long enough to open doors and windows, and then leave them open for at least 30 minutes before you stay inside for any length of time. This allows potentially hazardous air to circulate out of the rooms, while letting fresh air inside.

As always, don’t hesitate to call a qualified professional for advice and/or help with the cleanup process.