Managing Diversity – What An Employer Needs To Know

“Managing Diversity” is a critical human resources function for organizations large and small.  All too often, though, executives and managers lose sight of what diversity means from a legal and moral perspective, and the message then gets lost in the translation when it comes to the rank and file employee.

In 1997 the Department of the Interior identified diversity for its workforce as a crucial issue and provided the following definition of diversity for its own management purposes:

“The term ‘diversity’ is used broadly to refer to many demographic variables, including, but not limited to, racial, religious, color, gender, national origin, disability, sexual orientation, age, education, geographic origin, and skill characteristics…  Managing diversity is a comprehensive process for developing a workplace environment that is productive for all employees… The term ‘diversity’ is also used narrowly in employment recruiting and retention efforts to refer to race/national origin, gender, or disability…”

The EEOC (US Equal Employment Opportunity Commission) is the federal watchdog that oversees compliance for legislation such as Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion, sex and national origin.  Discrimination complaints filed with the EEOC have been on the upswing over the past four years, going from 77,444 in 1999 up to 84,442 complaints in 2002.  Small businesses with as few as fifteen employees are subject to Title VII, but determining who qualifies as an employee for the purposes of Title VII and other federal legislation is a tricky proposition and should be determined through consultation with an attorney or by researching the legislation directly. 

Title VII is not the only federal law that applies to employment discrimination cases.    For example, the Immigration Reform and Control Act of 1986, the law that created the I-9 requirements for employers, also furnishes protection against discrimination because of national origin or U.S. citizenship. It applies to any employer with at least four (4) employees. The Civil Rights Act of 1866 (42 U.S.C. 1981) forbids employment discrimination because of race or color and applies to any employer, even if there is only one employee.

State laws such as the Texas Commission on Human Rights Act of 1983 (Texas Labor Code, Chapter 21) also apply to employment matters, so it is important to be aware of the complex patchwork of laws that may or may not apply to any employment situation. 

The national jury-award median for employment-practice liability cases, which includes discrimination and retaliation claims, rose 44% in one year – from $151,000 in 1999 to $218,000 in 2000 – according to Jury Verdict Research’s ® report, Employment Practice Liability: Jury Award Trends and Statistics – 2001 Edition.  

Though these facts and statistics point to the growing need for employers of all sizes to carry Employment Practices Liability Insurance (EPLI), the news is not entirely negative.   According to Risk and Insurance (online at www.riskandinsurance.com) there are more than 70 insurers providing EPLI coverage and companies with fewer than 50 employees can expect to pay as little as $5,000 to $10,000 annually for the coverage.   Also, many EPLI policies come with pre-arranged legal services such as hot lines for attorneys versed in employment practices law, often at no additional charge.  Contact us to explore your EPLI options and to find out more about managing diversity in your workplace.

Are Your Valuable Collectibles and Antiques Adequately Protected?

Many Americans have a passion for collecting costly antiquities, while others may simple inherent some valuable antiques from their relatives. Either way, these antiques are often not adequately protected under a typical homeowner’s insurance policy. Being inadequately insured could mean significant financial and emotional loss if something were to happen to one of your antiques.

As far as antiques go, a standard homeowner’s insurance policy may very likely include restrictive coverage and limits and have a valuation only on the actual cash value. Before you mistakenly assume that adding a personal property replacement cost endorsement to your homeowner’s policy will provide you with coverage, you should realize that the endorsement lists several ineligible properties, including antiques, paintings, art, and memorabilia. There are also several coverage restrictions, such as excluding coverage if the antique is accidentally scratched or broken.

Here are six tips that may help you better protect your valuable antiques and collectibles:

1. Make an inventory of all your antiques and otherwise valuable collectibles. Take pictures and videos of each item, making sure to capture the item from all angles.

2. Ensure that your antiques and collectibles are appropriately stored and adequately secured.

3. For items of a lesser value, a general value assessment can be obtained for free online if you have a good photo and description for the antique or fine art dealer. For extensive or high-value collections, you certainly need to consider contacting an experienced antique appraiser. Most appraisers will need to inspect high-value pieces in person. The appraisal should include the replacement value, auction value, a description, and any comments the appraiser has about the item. Of course, this will most often involve a fee-for-service. Make sure the appraisal is done as per the requirements and codes of the American Appraisers Association -and- American Society of Appraisers.

4. Common, less valuable objects can usually be valuated online with the use of internet auction sites like eBay. This can give you a good market value for an item. Make sure you note both the asking and closing price of the item, but remember that the closing price will give you the best idea of the true value of the item.

5. Schedule an appointment with your insurance agent to determine if your existing coverage adequately covers and protects your antiques and collectibles, and, if not, what coverages you may need. Be sure to bring your inventory, photos and videos, and appraisals to the appointment.

6. Ask your insurance agent about a personal inland marine policy or endorsement, which can be added to your existing homeowner’s insurance policy to schedule your items on an agreed value based on the item’s appraisal. Although the above may also contain an exclusion for breakage, the exclusion can usually be eliminated for an extra cost.

There’s Nothing Old Fashioned About Preventing Loss

As a child you probably remember your grandmother always telling you, “An ounce of prevention is worth a pound of cure.” You had no way of knowing it at the time, but this advice was giving you the basic premise for a successful loss prevention program.  Preventing loss before it happens will have the single most profound effect on your end result.

The key, of course, is to look for possible loss and remove the circumstances that could cause it to occur. This may seem like common sense, but there is one important trick. Most project managers are competent when it comes to identifying the obvious such as the need to fence in the job site to prevent intruders or to have adequate access to the job site from the outside in the event you need the fire department. However, what is most important in loss prevention is preventing the less obvious from happening.

Take for example, your tools. You probably already keep tools and equipment in a locked area at all times when not in use. But have you thought of stamping tools with an identification number? Having them labeled with ID numbers will assist police in recovery efforts if they are stolen. Another variation on this theme is to paint the handles with bright, unusual colors. Nothing stops a thief quicker than merchandise that can be easily identified.

Working with combustibles always presents a challenge when it comes to managing loss prevention. All flammable liquids should be stored in appropriate safety containers and removed a safe distance from hot work and potential sparks. If distancing the liquids is a problem because of space, non-combustible shields should be properly positioned around the liquid containers. As an added precaution, a fire watch of the liquids should be maintained for at least a half-hour after the hot work is completed. All combustible waste generated during the work should be cleaned up immediately. Oily rags should be separated and stored in metal containers with tight fitting lids.  Fire extinguishers should also be strategically placed on the job site so they are available at all times.

When you’re on the job site, remember your project impacts the community even before it is finished. Keep in mind that we live in a litigious society and many losses on a construction project can be attributed to lawsuits brought against a company by injured pedestrians. It is important to be sure all electrical cords that pass through pedestrian areas are securely taped down so that accidental tripping is avoided. Likewise, all mud or water on public traffic areas should be cleaned regularly to avoid accidental falling by passersby.

Another area of consideration is when your work has an impact on other consumer services. Be sure to contact the local utilities before you perform any excavations. They can make you aware of the location of underground power lines or pipe work before they are inadvertently severed and you find yourself on the receiving end of a lawsuit.

In retrospect, the best way to exercise an ounce of prevention is to ensure that the project complies with all applicable codes and standards. They are designed to assist you not only when it comes to protecting your project from loss, but also when it comes to ensuring you have a quality project when it is completed.

How to Avoid Libel on Social Media Sites

When using social media sites, it is easy to get carried away with expressing disgust or irritation. Everyone is entitled to their own opinion, but it is important to avoid libel. The first step in avoiding it is to know the definition. Libel is any type of defamation that takes place on a more permanent source. Some examples include printed publications, blogs, films or any other written documents. Those who write, publish or are involved in similar practices should read about publishing laws. It is important to fully understand what is constituted as libel or slander. Avoiding such trouble online is the best way to also avoid a costly lawsuit. In addition to being expensive, lawsuits also tarnish the reputations of trusted publishing sources. Even bloggers who have a faithful followers may lose them if libel becomes an issue.

One of the best ways to avoid libel is to check facts. Responsible journalism demands this practice. Never rely on commercial sites for accurate information. Wiki sites are also bad sources for information. Anyone can add text to them, so it is easy for inaccurate stories and figures to surface. If a specific piece of literature lists a person or organization as the main source of information, contact the main source for verification. Quotes and testimonials should also be verified before printing. If a libel suit surfaces, it is important to have a list of sources to back the information. If it is impossible to verify a piece of information directly, be sure to clearly cite the source where the words came from.

In addition to avoiding misquoting people, it is important to avoid trade libel. Making disparaging remarks about a product or the company producing it is considered trade libel. After purchasing a defective product, it is easy to vent personal frustration online. In some cases, people simply want to alert others about a bad experience. However, it is best to contact the offending company directly. If the matter cannot be solved, contact the Better Business Bureau to resolve the issue. Never post insulting comments about a company or product online. Many social media profiles are public, and a quick Internet search for a person’s name may show several social media posts. Avoid jokes that may be interpreted as libel.

Overall, the main idea to remember is to test a comment or statement before posting it. Think carefully about the comment. Would it hurt a company’s reputation? Is it personally insulting to a certain individual? If it may be damaging and cannot be verified completely, avoid posting it.

Disaster Recovery Checklist for Business Owners and Executives

Everyone is responsible for the disaster preparedness of their own households. Business owners and executives, however, have additional responsibilities. Not only do they have to get their house in order, but they are also responsible for hardening their own businesses to continue to operate despite a local disaster – and to facilitate the recovery of the business, for the sake of investors, customers, employees and vendors.

Here are some basic tips those in executive positions can take to ensure the survival of a small business in the event of a disaster.

  • Create a written disaster preparation and recovery plan. This document should be in hard copy in your office, and emailed to new workers, so that they can access the plan even if your offices don’t exist.
  • Inventory on-site first-aid kits and other emergency supplies.
  • Secure data offsite. What will happen if your servers are destroyed in a flood or fire at your office? If your business would be damaged, it’s time to arrange to back up your files at a remote location, or on the Internet.
  • Designate an alternate meeting site. What happens if your office is suddenly destroyed or inaccessible? Your employees should know where to report for work. Managers should have a roster of phone numbers.
  • Arrange for alternate facilities. You may need to arrange new office space or warehouse space in a hurry. Have an alternate location already scoped out.
  • Get a generator. Don’t count on waiting until disaster strikes to get one. There will be a run on supplies. Ensure the generator has enough output to power your key equipment, whatever it is – be it computers, printers, and refrigerators (The cost of one generator big enough to power your refrigerator or freezer can pay for itself many times over in preventing food spoilage for those in food service businesses).
  • Name responsibilities. Who will come to the office prior to a hurricane to put up storm shutters? Who will be available to come fill and place sandbags? Who can clean up if there is severe damage, and when? Remember that your employees will have conflicting loyalties. Some may be having difficulties preparing their own homes and families. Others may be members of the National Guard, and may be mobilized for disaster response. Take this possibility into account.
  • Audit your insurance coverage. Lay out all your policies and make sure they cover the possible hazards, and that the amount of insurance reflects your needs. Double check flood coverage. Most regular insurance coverage doesn’t cover floods.
  • Double check key person life insurance and disability insurance coverage. The same disaster that disrupts your business could disable or kill key people, and cause severe disruption to the rest of the business as well.
  • Consider business interruption insurance. These policies help companies by providing a cash benefit to keep them going in case of a temporary closure. Can you make your payroll for a month or two while you get your business back on its feet after a disaster? If not, you may need business interruption insurance to avoid going bankrupt, or to retain valued employees while your business has shut down.
  • Have a public relations plan. Designate a spokesperson for the company. Reach out to the local media with your recovery story. Don’t let people get the impression your business closed – particularly if you have to relocate. This could be a fatal blow, even if you do everything else right.
  • Diversify your telephone systems. Hurricanes and other disasters may knock out Verizon phones but not AT&T service, and vice versa. It can take time before workers can repair towers or reroute signals. By ensuring your workers have different cell providers, you can spread the risk out, so that your ability to communicate by cell is not wiped out by the loss of any one cell tower.
  • Make a note of this phone number: 1-800-659-2955. It’s the phone number to the federal Small Business Administration. The SBA provides low-interest loans to qualified small businesses affected by disasters to help them keep running through a disaster and its aftermath.
  • Copy your tax returns and other key documents. Keep them online somewhere. Keep hard copies in a fireproof safe or deposit box offsite – preferably 100 miles away or more. If you live on the coast, keep it inland. If you live in a flood plain, keep it up hill. Identify your hazards, and don’t expose your valuable assets and papers to the same hazard in two different locations.

Above all, though, use your judgment, critical thinking skills, and work through the different contingencies that may affect your business. All businesses are different, and one business may have different needs than other business next door. For example, when Hurricane Katrina was menacing New Orleans in 2005, many nursing homes and other health care providers had difficulty evacuating their patients and residents. In some cases, low-paid staff didn’t show up for work – they were busy evacuating themselves or their families. If you rely on low-paid staff that takes the bus to work, don’t expect them to be available immediately prior to a hurricane, for example, unless you make and communicate arrangements in advance. For more information, visit Ready.org/business, which has a variety of tools and planning tips for business owners and executives.

Consider Safety Accommodations for the Older Worker

With age comes wisdom and experience. However, getting older also brings the inevitable decline in physical and sometimes mental agility. This change can present serious challenges for the older worker. The Department of Labor’s workplace statistics for 2004 indicate workers 64 and older had the lowest number of workplace injuries, however, the fatality rate for workers 55 and older rose by 10 percent.

How is it possible for older workers to have fewer job-related injuries than other age groups, but still experience increased fatalities? The answer to that question lies in the body’s reaction to the aging process. While older workers may have fewer accidents, when they get injured their injuries are often more severe. A longer healing process allows more time for complications that can lead to death.

However, it isn’t only the possibility of older worker fatalities that must concern employers. The type of injuries the maturing employee suffers is also significant. Older workers tend to report more back injuries than their younger counterparts. In addition, a number of workplace injuries are the result of performing the same tasks over and over. Repetitive motion injuries develop over time. Because of this, older workers report more musculoskeletal injuries since they’ve had more time for these types of injuries to develop.

As the work force continues to age, it is important for employers to recognize these facts and make accommodations that will allow older employees to remain safe and healthy. The American Society of Safety Engineers (ASSE) recommends the following environmental changes to keep maturing workers safe:

·   Improve illumination and add color contrast.

·   Eliminate heavy lifts, elevated work from ladders and long reaches.

·   Design work floors and platforms with smooth and solid decking while still allowing some cushioning.

·   Reduce static standing time.

·   Remove clutter from control panels and computer screens and use large video displays.

·   Reduce noise levels.

·   Install chain actuators for valve hand wheels, damper levers or other similar control devices, which bring the control manipulation to ground level and help reduce falls.

·   Install skid-resistant material for flooring and especially for staircase treads.

·   Install shallow-angle stairways in place of ladders when space permits and where any daily, elevated access is needed to complete a task.

·   Utilize hands-free, volume-adjustable telephone equipment.

·   Increase task rotation, which will reduce the strain of repetitive motion.

·   Lower sound system pitches, such as on alarm systems, as they tend to be easier to hear.

·   Lengthen time requirements between steps in a task.

·   Increase the time allowed for making decisions.

·   Consider necessary reaction time when assigning older workers to tasks.

·   Provide opportunities for practice and time to develop task familiarity.

Bear in mind that even though these changes are ostensibly being made for the older worker, they will actually have a beneficial effect on the health and safety of the entire work force population.

Learn Safe Boating Rules and Requirements

Every year, the U.S. Coast Guard reports thousands of accidents and hundreds of deaths resulting from recreational boating. Four leading causes of these tragic accidents are speeding, recklessness, inattention, and operator inexperience. These four problems magnify themselves, especially when combined with other safety concerns and issues.

Utilize and Maintain Safety Equipment

Having the right safety equipment on-board and in good working order can mean the difference between life and death on the water.

*Fire extinguishers – Boats with false floors or enclosed compartments require a Coast Guard approved fire extinguisher to be on board at all times. Be sure to keep it charged, and in a handy location.

*Life jackets and Personal Flotation devices – Each person on board needs to have a U.S. Coast Guard approved life jacket. Boats that are more than 16 feet long need to have a PFD that can be thrown to a person who has fallen overboard.

*Boat lights – Test your lights before you leave the dock. Be sure to carry extra batteries as well.

*Anchor – Not only do you need to have an anchor, but you also need to know how to use it. Each year improper anchoring is a cause of fatal and non-fatal accidents.

*Emergency supplies – Keep a first aid kit on board along with maps, flares, and matches. It is wise to keep your emergency supplies in a floating pouch.

Leave the Alcoholic Beverages Onshore

*Never operate a boat when under the influence of drugs or alcohol. The effects of alcohol can be increased by exposure to wind and sun, as well as noise and vibration.

*Most years, about a third of all boating deaths are drug or alcohol related. Don’t become a grim statistic. Stay sober and alive.

Loading and Unloading Your Boat

*Know your boat’s weight capacity and abide by it. Overloading your boat can spell trouble.

*Practice good boat launch etiquette and safety. Load equipment into your boat before you arrive at the ramp. Ask someone to hold the bow line and to help out in boat handling at the pier. Be courteous and cooperative with other boaters upon launching and upon your return.

Use Good Judgment and Common Sense

*Tell a close friend or family member where you are going and when you will return.

*Read and understand local and federal boating regulations before entering the water.

*Do not allow passengers to ride on seatbacks or on gunwales, and ask them to stay inside of protective railings.

*Watch your speed and follow all boat traffic rules.

When it comes to boating, take steps to prevent accidents before they happen.

Understanding the Role of Loss Mitigation Insurance

Loss Mitigation Insurance transfers an unknown or unwanted exposure from one company to an insurance company for a price. LMI caps what would otherwise be an unknown amount and is particularly effective if the company with the liability is in the process of merging or being acquired.

Employers of all sizes can benefit from a LMI policy. The coverage helps risk managers dispose of costly litigation that could damage the bottom-line and impair their ability to complete a refinancing arrangement. Before LMI, when an uncertainty in a merger or acquisition came up, both sides walked away until the lawsuit or financial impediment was resolved.

One solution used in such cases required the seller to deposit funds into an escrow account to cover the estimated losses from the claim or lawsuit. This tied up capital and there was no guarantee that the amount deposited would be enough to cover the final settlement. With a LMI policy, these problems can be resolved and the transaction put on track again.

LMI Takes Many Forms

There are several ways in which LMI programs can be structured. LMI can be underwritten to apply either in conjunction with, or independent of other insurance in force, such as Directors and Officers liability or general liability. For example, a deal to merge ABC Company with XYZ was delayed because of XYZ’s concern over the catastrophic exposure for a potentially adverse judgment against ABC. ABC arranged for a LMI policy to be written which responds if the loss exceeds the limits of ABC’s existing liability insurance. LMI relieved ABC of a potentially damaging award and the merger proceeded.

Another example of how a LMI policy helped solve a legal problem within a rigid time limit involved a consumer products company that was in the final stages of buying a company in an Eastern European country. The target company had been involved in litigation with a former employee regarding a patent and though most of the complaint had been dismissed, and a damage analysis of the remaining counts showed potential damages to be minimal, the purchasing company was reluctant to move forward. Further, the acquiring company’s option to purchase the Eastern European company was to expire in less than three months.

Although the investor wanted to exercise its option to purchase the company within the time limit, the patent litigation would not be resolved before that date. Also, the investing company was unfamiliar with the legal system in the target company’s country, which caused further concern. The solution: a LMI program was purchased by the target company that would cover excess losses from future settlements of the patent claim and the acquisition was completed before the time limit expired.


Premium Commitment

The size of the premium for a LMI policy depends on a combination of the risk analysis by the underwriter and the policy’s structure. Most LMI contracts are structured so the policy’s limits are never reached. If the policy is not breached, there is no claim. Because the risks covered by LMI policies usually have lengthy tails, it takes a long time for them to be settled, which permits insurers to realize investment gains from collected premiums.

Although LMI has only been written for a little more than five years, premium volume has skyrocketed from zero to more than $500 million annually in this time. Insurers are writing more of this coverage because underwriters have become more experienced in determining the extent of the exposure as well as drafting and pricing the appropriate policies.

An insurer’s willingness to underwrite LMI depends on the state of the insurance market and the availability of reinsurance. If the insurance market hardens, insurers have less access to the capital to support their underwriting efforts. In a soft market, insurers seek out opportunities to expand premium volume and are more willing to write LMI.

Insurance Considerations for Parents with College Kids

In today’s world, college students arrive on campus with more than their clothes, notebooks and pencils. They usually come with an arsenal of electronic gadgets. Laptops, smart phones, mp3 players, tablet PCs, printers and other devices are usually in their luggage. In some cases, today’s college students may not even live on campus. They may live hundreds of miles from their campuses. However, every college student has more expensive learning supplies than students in the past did. The belongings of college kids living in dorms will usually be covered under a homeowners insurance policy. Full-time students living off campus may also be covered if their primary residence is still their parents’ home. Insurers have several other qualification criteria, and they usually place a maximum age limit of 24.

Although the liability limits of a homeowners insurance policy usually apply equally to covered college students, many insurers place a 10 percent cap on the possessions limit. However, some insurers may not have sufficient provisions to cover college kids in certain situations. Many parents want to purchase additional coverage to ensure their kids will be taken care of. A renters insurance policy is often the best solution. It usually costs between $150 and $200 annually. If a child will be living with roommates, the policy will not cover the roommates’ possessions. Another important possession to consider is a college kid’s car.

Parents should ensure their kids are fully covered when going to college. Rates will fall or rise depending on the school’s location. Some students may opt to attend college without taking a car. This is especially true for students who attend college in large cities where efficient bus systems exist. When this happens, parents should contact their insurers if the campus is at least 100 miles away. In many cases, parents receive a discount totaling up to 20 percent. However, students will still be covered on holiday visits and during summers at home.

Another important consideration is health insurance. Many college kids are known for making poor nutritional choices, experiencing high stress and not getting enough sleep. These factors can add up to more trips to the doctor. As a rule, student health plans offered by schools are very limited. They are expensive, have low cap amounts and may require students to seek care only on campus. Since children are usually covered by their parents’ medical insurance, most parents opt to rely on this type of coverage. However, children of parents with limited HMO plans may only be able to seek emergency treatment on campus. This could mean much higher bills or higher copay amounts.

An individual health insurance policy may be the best option for parents who have limited HMO plans. At about $150 less per month for one individual, these plans are affordable. Premiums are lower with high deductibles. Students with plans featuring a deductible of $1,200 or more may open a health savings account and make contributions without tax penalties.

Another consideration for college students is identity theft insurance. Typically, this coverage is limited. It cannot prevent parents or students from becoming victims of identity theft, and it doesn’t cover financial losses directly.  However, it does give coverage for the cost of reclaiming you or your student’s financial identity.  For instance,it may cover the costs of making copies, making phone calls, mailing documents, lost wages, and attorney fees.  Parents should check first to see if their homeowners policy includes identity theft insurance while the student is away from the family home. If a student is renting an apartment, ask if his/her renters insurance covers identity theft, or if that could be added to the policy. 

To learn more about insurance options for college students, discuss these issues with an agent.

Recognize the Common Culprits of Safety Program Failure

There are several common, identifiable reasons why safety programs fail.  By being aware of these potential barriers to the success of your safety program, you can modify your program to guard against them.  Commonly culprits of safety programs failure include:

Support from the Top Down

When employees don’t perceive their superiors as visibly committed to their organization’s safety program, they likely will not invest themselves in the program either.  Senior management and department leaders need to epitomize the procedures of a successful safety program.  They also need to be actively involved in both recognizing safety successes and implementing consequences for program violations.


To be committed to a safety program, employees need to understand the critical nature of safety and how accidents impact the organization and its employees.  They need to understand why they are investing their time and energy towards the safety program.   Specific achievable goals should be developed and rewarding employees for success should be considered.  Structuring goals in a manner that produces short-term successes can help build enthusiasm for the program. 


To keep the program in the forefront, safety leaders need to regularly communicate with staff about their expectations, the successes of the program, the consequences of not participating in the program and other key issues.  An ongoing training and education component should be central to the program.  Using multiple communication methods can be very effective. 

Corporate Structure

A highly decentralized organization can be detrimental to standardizing a safety program.  A company needs to find methods to impose uniformity and consistency across various departments and offices of their company. 

The Time Factor

In every organization, time is an extremely valuable commodity.  Management needs to assign priority status to safety and allows its employees to take the time to maintain a successful safety program. 

How to Prepare the Construction Site for Severe Storms

Every construction site needs a storm preparedness plan to ensure a safe environment during hazardous weather. It is important to take the necessary time to develop a good plan several months before the storm season begins. Contractors and builders lose millions every year during storm season because of a lack of preparedness. A plan can be executed in just a couple of hours, and the investment is very small. When comparing the invested amount to the possible losses, it is easier for any contractor to get started with making a plan. The following checklist should be completed far before the start of the storm season.

Storm Preparedness Checklist

1. Clean the construction site daily.
2. Take photos of the site daily to record project progress before a storm might hit.
3. Order crew leaders to complete current jobs before starting new ones.
4. Complete regular maintenance for electrical and mechanical equipment.
5. Maintain an adequate number of sandbags or water detention devices.
6. Secure all staging areas and trailers one month before the storm season begins.
7. Small items that could be blown or washed away should be stored in buildings.
8. Include subcontractors’ supplies, property and personnel in the plan.
9. Ensure all electronic devices have battery power supplies.
10. Give the emergency power generator system a checkup and tune-up.
11. Check all of the batteries in emergency exit signals and emergency lights.
12. Stock offices with emergency kits, flashlights and other safety gear.
13. Buy enough bottled water to last all site workers at least five days.
14. Make sure there are always enough office supplies to last several days.
15. Keep important documents in a safe place where water cannot damage them.
16. Educate key workers about what steps they must take if there is an oil spill.
17. Provide employees with phone numbers for all state and local emergency agencies.
18. Give all workers specific assignments to help execute the plan.
19. Develop a system to inform workers about when to come back to the site.
20. Carefully review the building insurance policy for storm damage details.
21. Find out how many extension days the contract allows for weather interruptions.
22. Post the completed plan in a location where it is easy for all workers to see.

Action Plan
After the preparedness plan is in place, it is important to develop the plan of action. Workers should understand the difference between the two plans, and they should know that the action plan is only implemented when a severe storm is imminent.

1. Personnel must assess and clean the site to remove debris or hazardous objects.
2. Dismount and secure all scaffolding.
3. To prevent damage from sand accumulation, protect underground drains and pipes.
4. If there are scheduled deliveries, postpone them for at least two days.
5. Disable all of the power lines, and remove the temporary connections.
6. Any hazardous or contaminating materials should be covered and secured properly.
7. Secure and cover every window or glass feature with storm shutters.
8. If time allows, booms can be laid down, or the load line can be hooked to a low point.
9. If dumpsters cannot be removed from the site, cover and secure them.
10. If there are any open excavations, close them to prevent water from accumulating.
11. Disassemble every temporary structure or fence that might be swept up by the wind.
12. Make sure all catch basins and storm water inlets are free of debris.
13. Secure all of the heavy equipment in a safe area.
14. Designate crews for the shifts, relief, cleaning and standby. 

Are Your Safe Driving Skills Up to Par?

As if we didn’t already have enough distractions, on-board GPS systems, portable DVD players, iPods, and Smartphones have created more driving distractions than ever before. And, it’s certainly not atypical for a vehicle to simultaneously have ringing phones, cartoons blaring from the backseat, a GPS incessantly yelping orders out, and fast-food fries flying around like ninja weopons.

Even though elements like the above have been proven to make it nearly impossible for a driver to devote their full attention to the road at all times, many drivers still think they’re perfectly safe drivers. Here’s a simple yes -or- no quiz that you should take to really determine just how safe you are when driving with distractions:

1. So long as I’m not watching, it’s okay for passengers to watch a movie on the vehicle’s in-dash video screen?

The answer is no. Not only do most front seat, in-dash video screens generally have a feature that prevents it from showing entertainment or business video when the car is moving, but it would also be completely unsafe to do so since it would inevitably catch the driver’s peripheral vision and distract them. Furthermore, many state laws regulate the placement and use of on-board video screens.

2. Have there been any criminal cases alleging electronic devices were the causative factor in vehicle accidents?

The answer is yes. One example would be a 2004 case that took place in Alaska. The driver was allegedly watching something on his DVD player when he struck another vehicle and killed two people. Although the driver claimed he was only adjusting his CD player, he was charged with second-degree murder on the premise that he engaged in conduct showing an indifference to human life.

3. In-dash monitors for rear-view camera and navigation purposes can be installed in the front seat?

The answer is yes. If the device has the feature that prevents it from showing entertainment and business video, then it can be installed and used in the vehicle’s front seat.

4. It’s okay to drive as you eat or drink?

The answer is no. While driving as you drink coffee or eat a granola bar usually isn’t the distraction that watching a movie or text messaging is, it’s still an unsafe driving practice. The bottom line is that doing and thinking about anything aside from driving can distract you from the road and lead you to look away, remove your hands from the steering wheel, or become mentally preoccupied.

5. Does driver distraction cause very many accidents?

The answer is yes. Over 6 million crashes, 3 million crash-related injuries, and 42,000 crash-related deaths occur each year in the U.S., of which driver distraction accounts for 1.2 million to 1.8 million, or roughly 20-30 percent.

6. Do federal laws govern the use of mobile devices like a GPS in moving vehicles?

The answer is no. In some states, there are state laws that prohibit the use of hand-held cell phones in moving vehicles, but there aren’t any federal laws regulating the use of mobile devices in a moving vehicles.

7. Can the National Highway Traffic Safety Administration (NHTSA) regulate cell phone usage in moving vehicles?

The answer is no. Cell phone laws are enacted at the state or local levels. However, NHTSA is able to regulate the use of motor vehicle equipment and devices.

8. Are lawmakers concerned with vehicle crashes related to driver distraction?

The answer is yes. Over the last decade, several states have already passed or presented legislation related to driver distraction and vehicle crashes, and the number of states looking into such laws grow every day.

9. Do any states totally ban hand-held cell phone use while driving?

The answer is yes. Nine states, including California, Connecticut, Washington, New York, New Jersey, and Utah, prohibit all drivers from using hand-held cell phones while driving. Additionally, 30 states and the District of Columbia ban novice drivers from using both hands-free and hand-held cell phones.

10. Can your employer be held liable if you’re using a cell phone and crash into someone or something?

The answer is yes. Your employer can be held liable in a court of law. Under respondeat superior, an employer can be held liable in civil court for employee acts committed within the course of employment.

How many did you get right? Maybe you’ve learned a few new facts, or maybe you gained a new respect for what you already knew. Either way, it’s time to put down the food, turn off that cell phone, and start keeping your mind and body focused on the road ahead of you. 

Good Housekeeping Is Safety Job One

Cleaning up is usually not a task many people enjoy.  Whether it’s washing the dishes after a big meal or scrubbing the shower, most people would rather put off until tomorrow what they should be doing today.

The same is true for housekeeping at work.  Employees get involved in the day-to-day routine, always intending to clean up but never quite doing it.  Sometimes, they make a half-hearted attempt at sweeping aside some paper, but it doesn’t attack the real problem.  That’s because the problem with poor on-site housekeeping goes beyond just hygiene.  Lack of regular housekeeping can actually be the catalyst for injury.

Employers should establish a routine housekeeping program and designate someone to administer it and to ensure employees follow it consistently.  If a housekeeping program is going to be truly effective, management must show they have enough commitment to the program to formalize it and have a designated overseer.

This kind of strict adherence to good housekeeping practices will lower your company’s accident rates, which in turn lowers costs for medical claims and workers’ compensation.  Fewer injuries occur when there is sufficient work area for employees to move freely while doing their jobs.  Fewer injuries can also lead to increased production.  When work areas are hazard-free and supplies and equipment are orderly, workers can perform their jobs more efficiently with little down time spent looking for what they need.

A clean workplace also helps workers think more clearly.  If employees know they will be able to access what they need to perform their jobs, a major source of stress in the workplace is eliminated.  Work becomes less like “work” and much more enjoyable.  As employees find themselves less burdened with concerns about being physically able to get the job done, it boosts their morale, in turn increasing production and quality of their output.

What should you include in your on-site housekeeping program?  The California State Compensation Insurance Fund recommends the following:

• Neatly arrange small parts, tools, cords, hoses, and equipment

• Close drawers and cabinet doors when not in use

• Store materials and supplies away from edges and at a stable height

• Clean up liquid spills and tracked in water, mud, and snow, which could cause a slip and fall

• Properly store or dispose of oily rags or flammable liquids

• Put scraps or debris in available trash containers

• Keep aisles, walkways, platforms, and stairways clean, clear, and dry

• Insure easy access to fire extinguishers, safety equipment, and emergency exits

The most important lesson to teach employees is that following good housekeeping practices is an ongoing process that every worker should adhere to each and every day.  Once good housekeeping practices become a part of your workplace culture, it will take less time and effort to follow them because they will be second nature to your employees.

How to Keep Family Members & Visitors Safe in the Pool

Many children drown or are injured in residential pools every year. By implementing a good set of safety rules, parents can help keep their kids and visitors safe. Some people may think it sounds rude to lay down a list of rules in front of pool guests, but the cost of a liability lawsuit would be much worse. To avoid sounding like a stickler, simply explain to pool guests that their safety is important. Explain that they can help out by following the safety rules. Parents should review these rules with children frequently. Quiz them on each point to ensure they understand thoroughly. The following tips are helpful for developing a strong set of pool and spa safety rules.

1. Specify all requirements. This should be the most important step. Decide who can go in the pool and at what time. For example, children should have specific blocks of time when they are allowed in the pool, and they should not be allowed to go in when an adult is not present. Teach them it is dangerous to run. Instead of just telling them not to run, explain how they can slip, fall into the pool and possibly drown. Discourage horseplay or rough water games. Children who cannot get along in the pool should understand that there will be consequences. Kids should also understand how important it is to stay away from drains and filters.

2. Have an emergency plan. Even if strict rules are set in place, pool accidents may still happen. It is important to know what to do. Make sure a cordless phone is always near the pool. If an accident happens, it will be easier for someone to call 911. Adults should learn how to perform CPR. The Red Cross offers low-cost classes, and some hospitals or health clinics offer free classes. Make sure kids know how to dial 911, and they should know what address to tell emergency response teams to locate.

3. Teach kids how to swim. Although toddlers may not be up for actual swimming lessons, it is good to put them in the water with floating pool toys. Do not leave them alone, but let them get accustomed to the water. When children are old enough for swimming lessons, enroll them in beginner courses. Let them continue until they complete all of the courses. Adults who have never taken swimming lessons should also learn how to swim. As a backup, it is helpful to have a life-saving floating raft attached to a rope or pole.

4. Keep the pool area safe. When the pool is not in use, make sure it is covered. Purchase a pool cover manufactured by professionals. Never use a tarp. Some nets work well as pool covers, but they become weathered over time, so be sure to replace them every few years. Nets may also be easy for some children to remove. The optimal choice is a durable hard cover with a locking mechanism. Make sure there is a fence around the pool or yard. The fence should stand at least four feet high. If a house is used as a fourth side to enclose a pool, install door alarms. This will alert parents when kids enter the pool area. It is also helpful to install underwater alarms or surface wave alarms. If parents do not deactivate these alarms, they will go off when kids enter the pool.

If a child is missing, be sure to check the pool first. This is a thought that no parent wants to dwell on, but it is best to rule out that possibility first. Parents should always carefully watch kids who are playing in the pool. Accidents can happen in a second, and children can start drowning in less than a minute. Check drain covers frequently, and make sure they are compliant with current regulations. A pool service company will be able to provide information about current drain cover specifications. Remember to keep any gates to the pool area locked. Homeowners may be liable for uninvited people who wander into an unlocked pool area and get injured.

Sarbanes-Oxley Act Changes Rules for Privately-Owned Businesses

Responding to a number of scandals involving fraud at publicly owned companies, the U.S. Congress in 2002 enacted a new law intended to make undetected fraud less likely to occur.  The law applies only to public companies, mainly those whose securities are registered in accordance with the Securities Exchange Act.  Even so, experts predict that it will have an enormous impact on private companies as well. 

Among the changes many businesses, public and private, will undergo are creating mechanisms for fraud whistle blowing by employees, adapting to a different relationship with their external auditors, upgrading internal financial controls, becoming much more aggressive at preventing fraud, and improving audit committee accountability.  This magnitude of change is why the Sarbanes-Oxley Act has been variously described as “a paradigm shift” in how companies do business and “a whole new way of thinking about corporate governance.”                       

Some of the most notable of the act’s requirements include:

· Management must certify the accuracy of their companies’ financial statements.

· Management must attest to the effectiveness of their internal financial controls.

· Outside auditors must attest to the accuracy of management reports.

· The internal audit committee must have independence and must include financial experts.

· Steps must be taken to improve fraud detection and prevention (e.g., an employee hot line for reporting fraud, training about fraud, a written corporate anti-fraud policy).

· Auditors must proactively look for material misstatements in financial reports, evaluate opportunities to commit fraud, and maintain a skeptical attitude to the company’s reports.


Some experts predict that more private companies will fall under new rules similar to or the same as Sarbanes-Oxley as states enact new laws and apply them to private companies doing business in the state.  

Many banks and insurance companies are demanding a higher standard of action to prevent fraud and are closely examining a borrower or insured’s fraud prevention efforts.  Private companies that deal regularly with banks and insurance companies, and those that are potential acquisition targets, might find that they must comply with new rules even though they are not required to do so by law.  While previously a banker’s only concern was whether they would get paid, now they are more likely to be concerned with whether management has done enough to avoid the risk of financial mismanagement. 

Insurers, too, are engaging in increased oversight.  Prices are going up on coverage in every area of financial fraud and mismanagement risk. Underwriters are reviewing private companies’ financial statements much more carefully and sometimes require interviews to obtain additional explanations.

Customers, clients, professional services providers, and business partners of privately held companies want to avoid the spotlight of scandal and may insist on adherence to the principles of Sarbanes-Oxley.

Private company directors are also likely to push for stricter fraud-prevention efforts in light of a recent federal court decision that will hold them responsible for fiscal misconduct by company management under a standard of due care and loyalty just as directors of public companies are.  In Pereira v. Cogan, et al. (294 B.R. 449, S.D.N.Y. 2003) the judge ruled that directors at bankrupt Trace International Holdings Inc. failed in their responsibilities by allowing Marshall Cogan, Trace’s chairman and controlling shareholder, to drain company funds by drawing excessive compensation, loans, and dividends.  Significantly, the Trace directors were found to have violated their fiduciary duties irrespective of whether Mr. Cogan’s self-dealing actions were the result of, or enabled by, board action. 

The court noted that, during the period in question, the Trace board held no meetings and that, when it acted, it did so by written consent.  The directors argued that they should not be liable, since they had not taken any action nor played any part in the improper transactions. But the court rejected this idea, noting that directors have a duty to be informed of significant corporate expenditures and to disapprove of those that are not in the best interest of the corporation or its shareholders.

It will be years before the full effects of this new climate of corporate financial accountability will be realized.  For many private companies, as for public ones, the likelihood is that there will be little choice but to change some of their practices and to spend more to prevent fraud and other financial mismanagement.

Using Insurer Financial Ratings to Choose Your Insurance Carrier

The right to choose is one of our most closely guarded freedoms. But along with that right comes the responsibility of being accountable for the consequences of your choice. If the choice turns out to be a poor one, the consequences can have devastating effects, especially if the decision-making is in a business context.

When you select an insurance carrier you need to weigh each option against the same set of objective criteria. The goal is to use a set of pre-established conditions that will ensure the selected carrier will have the financial strength to stick with you over the long-term. This concept is the foundation for what insurance evaluation services perform.

Analyzing a carrier’s financial standing is a fairly complex task requiring a lot of intricate calculations. Each of the recognized insurance ratings firms have a somewhat subjective way of arriving at the ratings they give companies. However, there are some common criteria they all use in their evaluations. The first criterion is the company’s liquidity. Going-hand-in-hand with liquidity is leverage. Leverage is the amount of money a company borrows to increase its assets either through purchase or investment. The more leveraged a company is, the more debt and conversely, the less equity they have, which affects their liquidity.

Of course, companies are rated on their investment portfolio because it also affects their liquidity. Their portfolio needs to be diversified with quality securities in order to receive a high mark in this area.  The next evaluation point is risk-based capitalization. This is the theoretical amount of capital needed to cover the risks associated with their operation. If this money is put in reserve, it lessens a company’s available liquid assets. It also affects profitability, which is another area for evaluation.

Other more general aspects that are assessed include the overall conditions of the market, how diversified the carrier’s product line is, how competitive they are when measured against other carriers with a similar product lines, the experience level of their management team, how much of their product line is made up of policies that are extremely risky to underwrite and how large a reserve they have to cover risk. An insurance carrier that receives high marks in all of these areas of assessment is one that you can depend on to be around when you need them.

You have access to this information by reading reports generated by the insurance evaluation services. There are a number of them available, but the three most commonly used are:

  • A.M. Best Company – they are the original insurance raters, established in 1906. They use letter ratings to evaluate not only the company’s current financial condition, but also its future outlook. They also have a NR designation, or “not rated.” The NR designation includes the general reason why a rating was not assigned. Best lists its ratings scale and insurer profiles on its web site www.ambest.com.
  • Standard & Poor’s – they assign an insurer a financial strength rating based on an assessment of whether or not the carrier has the financial capability to meet its obligations as outlined in the terms of its insurance policies and contracts. A Standard & Poor’s evaluation uses both hard numbers and subjective factors such as general attitudes toward the company. Their ratings categories and reports can be found at www.standardandpoors.com.
  • Moody’s Investor Services – they also use an evaluative approach that includes both objective and subjective factors to determine if a carrier can meet its obligations to its policyholders. You can find their reports at www.moodys.com.

Until You Know It’s Protected, Keep Your Boat on Dry Land

Americans love the sense of freedom and adventure that comes from boating. But boating can have a dark side, too. According to the U.S. Coast Guard, there were 4,730 boating accidents that involved 736 deaths in 2009. The price tag of these recreational boating accidents is high: about $36 million dollars per year.  And these figures are probably only the tip of the iceberg since the Coast Guard believes that more than 80 percent of all boating accidents go unreported.

Given this level of risk for accidents, it would make sense that boat owners would look for a way to protect themselves, but that doesn’t seem to be the case. A study conducted by Progressive Insurance revealed that nearly one third of U.S. boat owners don’t own a separate watercraft policy. That’s probably because boat owners assume that their craft is covered by their personal auto policy or their homeowner’s policy. This is a mistake that can cost them big time.

The standard auto policy covers the boat trailer for liability with the option to add coverage for physical damage. The boat itself, however, is not covered for liability or damage.

Some homeowner’s policies offer coverage for physical damage for boats, but only for smaller vessels. The typical homeowner’s policy contains a special property limit of $1,500 on watercraft, which doesn’t begin to equal the dollar value of most boats. In addition, the covered perils specific to the boat are also greatly restricted.

There is also liability coverage available for boats under the majority of homeowner’s policies, but once again, it is only applicable to smaller watercraft. The only exception is a boat with an outboard motor. That means that any type of boat you own that is powered by an inboard or inboard-outboard motor is excluded from liability coverage under the homeowner’s policy.

Because most boat owners are unaware how large a property and liability loss they expose themselves to without proper insurance, the Institutional Risk Management Institute (IRMI) has created a list of loss scenarios that demonstrate the need for specialized boat owners coverage:

·  Your cruiser collides with a speedboat whose operator fails to yield the right of way, causing extensive damage to your boat. The owner of the speedboat does not have any insurance coverage.

·  An expensive fishing boat you just purchased is stolen from your home.

·  Your 27-foot-long sailboat is damaged by a hailstorm and high winds while docked at the marina.

·  Your sport fishing boat is struck by lightning, incapacitating its electrical system.

·  Your daughter’s friend is water skiing behind your boat and  falls into the lake, injuring herself, due to the excessive speed of the boat.

·  You negligently cause another boat to overturn to avoid a collision.

·  Your outboard motor explodes, seriously injuring your next-door neighbor.

These scenarios illustrate the need to factor insurance costs into the equation when buying a boat.  If you fail to insure your boat properly, your boat loan may become the smallest of your financial worries.

Understanding the Process & Benefits of Deconstruction

The process of deconstruction involves structural and architectural components of a building being salvaged or removed before demolition. Remodeling and demolition projects produce more than 50 million tons of debris, which normally ends up in landfills. By hiring special contractors to assist in assessing what materials can be salvaged, the process is optimized. Plumbing, lumber, cabinets, some fixtures, concrete and a wide variety of other materials can be salvaged. After being saved, these materials can then be donated to charity or reused for future projects. In addition to this, it may be possible to gain LEED points or tax credits for some materials.

Basics Of Deconstruction
It is important to identify any permit issues and potential hazards. The main concept abbreviation to remember for the actual task of deconstruction is this: LOFO. It means last on is first off, which indicates the last piece of material placed during the construction process should be the first object to be taken out. When the deconstruction process is being carried out, the same tool that was used to install a specific object or material should also be used to remove it.

During the task of removing materials, it should not be necessary to use excessive force. When contractors find themselves reduced to this as the only option, something is preventing the object from being extracted. Evaluate the surrounding area to see if any alterations were made. If not, continue assessing the area until the source of the difficulty is found. For all projects, it is crucial to use proper safety tools. Employees should also be provided with the right safety gear and other materials. Workers should not be exposed to overhead activities, so work on only one floor at a time.

To keep safety a priority, plan an escape route ahead of time. All exits and hallways should be free of debris. Another important step to take prior to a project is to obtain an estimate, and one of the best sources for this may be the structure’s original blueprints. It is also helpful to know what to do with the material ahead of time. In addition to this, it is wise to have transportation for the materials scheduled beforehand. If the items will be donated, contact a charity such as Habitat for Humanity to arrange a time to receive them.

Costs Of Deconstruction
When planning a deconstruction project, this is the main area where people will notice an impact. Research shows that the highest value per labor unit varies for each residential construction component. The most valuable materials include following:

-Plumbing Fixtures
-Lighting & Electrical Features
-Massive Dimensional Lumber
-Wood Timbers
-Interior Wood
-Outer Sheathing
-Wood Flooring

Before starting a deconstruction project, people may consider various alternatives. These considerations are what lead people to choose the methods and tools used for the process. Although deconstruction is not a cheap solution, it does come with its own set of benefits. For example, it is better for the environment, reduces landfill waste, results in cleaner air and may be beneficial for charities if materials are donated. In the end, it is possible to create financial, environmental and social contributions.

Comparing Demolition & Deconstruction Costs
The United States Army uses the following formula to assess market price for materials: MP = MC + PC + TC + P. In this equation, P represents profit, TC represents transportation cost, PC represents processed cost and MC represents material cost. With demolition, there are rental costs involved when working with waste companies. There are also costs for relocating debris, maintaining equipment, paying workers and purchasing safety gear.

With deconstruction, there are costs for planning, management, hauling, labor, equipment maintenance and training. If salvaged materials are traded or sold, keep in mind they may be considered revenue. However, the benefits include LEED points, possible state funding and tax credits. In many cases, deconstruction provides a great overall solution for building owners. 

Why Insurance Premiums are Increasing

Insurance premiums are a function of these factors: The perception of future risks, recent catastrophic claims and the return available on investment. Huge fires and other disasters factor in, such as the Colorado Springs blazes earlier this year and other natural disasters have also forced large payouts. Even the devastating Japanese earthquake and tsunami from 2010 affects insurance premiums in the United States, since insurance companies routinely purchase re-insurance coverage from very large companies. And these reinsurance companies, such as General Re, have been increasing their rates. In addition, jury awards and settlement costs in a variety of commercial fields have put pressure on insurance company reserve funds.

Yes, insurance companies are just like you: They assess the risks they can cover, and then buy insurance themselves to protect themselves against very large but unlikely events that would overwhelm their reserves.

We saw a similar tightening of the property and casualty insurance world across the board, in 2001, following the 9/11 attacks on the World Trade Center. The direct costs themselves were significant, but reinsurance companies also increased their rates then, in order to cover their own risks and ensure clients were protected in case of acts of war, nuclear strikes, chemical strikes, etc.

Fortunately, their worst fears weren’t realized, but prudent insurers are in business to cover the worst case scenario, and so they had to plan and set premiums accordingly.

Fast forward to today, though, and we have a different phenomenon at work. Reinsurers had just started to climb out of the substantial capital shocks of 2008 and 2009 when they got hit with the Japan tsunami, which put pressure on capital pools. But as they work to replenish their reserves, all insurers, all over the world, have been forced to reckon with a new reality: Low interest rates.

Insurance companies make money in two ways: Bringing in premiums, and investing the “float.” Normally, insurers break even or even run a slight loss on premiums. This keeps premiums affordable, but is only possible because they can invest their accumulated reserves at a profit.

Ten years ago, an insurance company could get 5 or 6 percent on a portfolio of Treasuries. Now that same insurer struggles to get 2 or 3 percent on a AA-rated bond portfolio, and U.S. Treasuries – the traditional mainstay of conservatively-run insurance companies, may well be generating a negative real return after inflation.

Something has to give.

That’s what we’re seeing now: Actuaries have no choice but to increase premiums to cover anticipated payouts in light of the new lower interest rate environment. To do otherwise risks insolvency, which does no service to the insured at all, and even defeats the purpose of insurance.

The tightening of the reinsurance market, combined with adjustments to account for the lower returns on assets, is now making its presence felt on Main Street: Aggregate commercial insurance ratios increased for the fifth consecutive quarter, and by 5 percent in the first quarter of 2012 alone. That’s the biggest increase we’ve seen since 2004 (remember those summer hurricanes in Florida that year?)

The two lines responsible for the largest increases, according to a Towers Watson survey, were the two segments most vulnerable to jury award and medical cost increases (workers compensation), and increased reinsurance costs from megadisasters and lower interest rates (commercial property insurance), respectively.

Insurance markets tend to cycle along with other industries. As reinsurance pools of capital get replenished, or as interest rates rise, allowing carriers to generate more revenue from the “float” rather than rely so much on point-blank premium collection, rate increases tend to moderate, and new carriers spring up to compete for business.

So if you are seeing rates increase, it’s more a matter of prudence in the face of risk and low returns on capital, which affect all carriers everywhere. As a result rates increase to make sure there are enough in reserves to cover future claims . No one is exempt, and it’s a bigger issue than any single insurance agency, carrier, or insurance line.

Are mp3 Players a Safety Hazard at Work?

“Music hath charms to soothe the savage breast.” At least so thought William Congreve, a 17th century English playwright. However, the music Congreve was referring to didn’t come out of technological concoctions such as the mp3 player. Had he been alive today, he might be less concerned with the effects of the music and a lot more concerned with the effects of using this technology, especially on the job.

The mp3 player is fast becoming the method of choice for employees who need their daily dosage of tunes during the workday. While it can be argued that usage of personal music players in the office help employees concentrate by letting them tune out extraneous noise, it should be noted that any productivity gain comes with a price.

The first safety hazard associated with repeated mp3 player use is a condition that results from the hand movements necessary to navigate through a playlist. The British Chiropractic Association has called the movement “unnatural,” stating it separates the joint in the thumb every time the action is performed. The ultimate result of repeating this movement too often is a Repetitive Stress Injury (RSI). In addition to RSI, the prolonged gripping of the device, the repetitive pushing of the small buttons and the awkward wrist movements can lead to carpal tunnel syndrome and tendonitis. As the devices become even smaller with each succeeding product generation, the risk for these conditions will become more prevalent. And as every employer knows, an employee with carpal tunnel syndrome or tendonitis is not only unproductive, but prone to racking up large medical claims.

The potential for hearing-related problems connected with mp3 player use is another source of alarm. Digital technology permits users to listen to thousands of consecutive hours of music. Older technologies either required users to turn over a cassette or contained only an hour or so of stored music. Either way, the ears had a brief respite from the sound. Also, the higher-quality sound of new music players makes it easier for users to turn up the volume to dangerous levels. High-volume levels can result in tinnitus, a condition in which the sufferer hears continuous buzzing in the ears.

Many tinnitus sufferers complain of buzzing, whooshing, chirping, hissing, ocean waves and even music in their ears. Some people only experience tinnitus occasionally, while others experience it 24 hours a day. The problem is associated with the sensorineural system, which transmits signals from the inner ear to the brain. An employee suffering from tinnitus is not going to exhibit increased levels of concentration.

As if this weren’t enough, employees walking around with earphones not only block out extraneous noise, but everything else, including warnings of imminent danger such as a fire alarm. This puts them at increased risk for personal injury.

For these reasons employers who permit the use of mp3 player or other personal music players in the workplace should establish guidelines concerning the length of time an employee can listen and in what areas mp3 player use is permitted.

Why Your Company May Need Product Liability Insurance

If your company manufactures any kind of product, from lemonade to engines, computers to clothing, it could easily find itself on the wrong side of a lawsuit by a plaintiff claiming your product(s) caused some kind of injury or damage. In today’s litigious society, it is not even necessary for you to be the manufacturer of the product. Sellers are often sued alongside the manufacturers.

It’s only natural that people want to be safe from injury and property damage whether from food poisoning, getting into an auto accident due to tire failure, or having the foundation of their home crack, but how do protect your company from liability? The answer may be with product liability insurance.

Most liability claims are covered as part of your company’s commercial general liability (CGL) policy. However, products that are particularly likely to lead to liability may be handled separately. As part of a sound risk management program, you should know well in advance how your current coverage would respond to such claims.

The CGL policy covers any bodily injury and property damage occurring away from your business premises that happens as a result of your product or completed work. If a product is consumed on the same premises, such as food served in a restaurant, the policy provides coverage once the insured has relinquished possession of the product whether the injury or damage occurs on or away from the premises.

The standard policy excludes damage to the product when the damage was caused by some part of the product itself or faulty workmanship in its manufacturing. For example, one small part in a complex, expensive piece of equipment may fail and cause tremendous damage to that equipment. If the part that fails was purchased from an independent subcontractor, the insurer of the manufacturer of that part would cover damage to the equipment. By contrast, if the manufacturer of the expensive equipment itself produced the piece that failed, the damage is not insured under the CGL policy.

Product liability exposure lasts as long as the product is in use. Someone may be injured or damage may result from use of the product years after it was manufactured and the product may no longer be in production. Product liability insurance should be kept in force as long as the products are being used and could cause injury or damage. Partnerships and sole proprietorships are especially vulnerable. These business owners cannot evade personal liability exposure by taking cover behind a corporate shield; thus, they need to take particular care to keep product liability coverage continuously in force. Because of the continued liability exposure, insurers require insured’s to provide detailed information about discontinued products.

The CGL provides coverage for product liability that may arise when products are sold internationally, but only if liability is determined by a lawsuit in the United States, Puerto Rico, or Canada. Since product liability lawsuits are often filed in the country where the alleged injury or damage occurred, any business whose products are sold overseas will need a foreign coverage endorsement added to its CGL policy.

Another type of coverage not provided by the CGL policy is the expense of a product recall, though this can be expensive and severely damaging to a company’s reputation. Separate product withdrawal expense insurance may be available depending on the particulars of your business and its product.

The basic premise of most product liability lawsuits is that the product manufacturer or vendor failed to take appropriate steps to insure the product was safe and sound. It is impossible to eliminate all hazards in connection with many products. No matter what you do, someone could fall off a ladder or burn themselves with a hair dryer, and so forth. To show that you did everything possible to prevent such injuries, it is critically important to communicate with buyers and users of the product about such hazards. The thing to remember is that if there is a lawsuit, your best defense is to prove you took all reasonable measures to assure no one would be injured.