Colsa Insurance Agency, Inc. Blog
Construction Firm Tips for Avoiding Insurance Disasters
When you're in the construction industry you already have lots to worry about: Keeping your workers safe in one of the most dangerous industries, uninsured or underinsured subcontractors, and finding experienced employees from a shrinking pool of talent.
Not only that, but lawsuits lurk in any project, exposing you to serious losses that can threaten the survival of your business. For these reasons, it's important that you understand your insurance coverages and that you know how to address any deficiencies that may exist in your risk management strategy.
To make sure that you are not left exposed, we recommend the following:
Choose the right insurance company
We can help you find an insurance company with the experience in writing policies in your industry and the resources to tailor coverage to your needs. Remember, some large projects and lenders require that you are covered by only an A-rated insurer.
Don't buy the cheapest policy
If the policy price is significantly lower than other insurers, that may be a red flag. Make sure the insurer will be covering what the project owner, your lenders and other stakeholders require. If you find out your policy is deficient after you've purchased it, you'll have to cancel it and buy a new one. There go your profits.
Understand your policy
All policies have exclusions and you should understand what the insurance company will cover and what it won't. We can sit down with you and review every line of your policy, including any additional insured endorsements or exclusions, so you know exactly what's covered and what isn't.
Don't buy insurance you don't need
We can do a thorough review of your business and its risks with your help. It's important your coverage meets your needs and that you don't carry coverage for risks you're unlikely to face.
Use the correct class codes
It's easy to misclassify certain employees, and if you err it can come back to haunt you. When it's time for renewal, go through your books and make sure you have job descriptions for all of your employees. Keep track of your staff so that you get it right the first time.
Also, keep track of new employees that you hire (or let go) during the course of the year, so that adjustments can be made to your policy.
Avoid the independent contractor trap
During the last few years, the IRS, the Department of Labor and a number of state agencies across the country have been cracking down on the practice of worker misclassification.
There are many implications for classifying someone who is an employee as a contractor, and all of them are costly. You could be looking at back taxes, owing additional workers' comp premiums, lawsuits, and more.
Don't understate payroll
If your insurer audits your business and they find that your numbers just don't add up, you could end up having to pay additional premium or risk policy cancellation.
Understand how 'claims-made' coverage works
"Claims-made" policies have lower up-front and ongoing costs and they only let you make a claim during the policy year during which a project is being built.
The biggest drawback of these policies is that if you have to file a claim years after the project is completed, you may be out of luck, especially if you've switched insurance companies.
Check your subs' insurance certificates
Know whether or not your policy will cover subcontractors or if they need to carry their own liability coverage. Verify that any subcontractors you use have valid and current certificates of insurance.
Keep your policies current and up to date
Many factors should prompt you to revisit your insurance policy: Hiring new employees, buying new equipment or vehicles, or opening a new office. These types of changes should prompt you to review your coverage with us to ensure you stay fully protected.
A new survey has found that cyber risks have risen to become the number one concern among businesses, replacing the COVID-19 pandemic and business interruption as the top risks in 2022.
The second-most cited risk was business interruption and supply chain disruptions, followed by natural catastrophes, according to the "Allianz Risk Barometer 2022."
The rankings follow a year that saw an explosion in cyber attacks, massive business interruption and supply chain disruptions that have left factories idle and store shelves bare, and record damage caused by natural catastrophes.
This annual survey provides perspective on the number and variety of threats businesses face, and which ones are causing the biggest headaches.
Here are the rankings of the top eight risk cited by risk managers in the Allianz survey:
1. Cyber risks — Ransomware has become the number one cyber exposure for business, according to the barometer, just ahead of data breaches. Cyber criminals have refined their business models and tactics, which has made it easier for them to carry out ransomware attacks.
Hackers have also started targeting technology and software supply chains, physical critical infrastructure or digital single points of failure.
2. Business interruption — The COVID-19 pandemic has caused the greatest global supply chain disruption in history, which in turn can lead to business interruption, particularly for manufacturers unable to secure much-needed parts. The supply chain has been disrupted by a number of factors, including pandemic-induced port closures in China, port congestion and factory closures.
The biggest supply chain concern is cyber attacks on infrastructure and on supply chain and logistics technology.
3. Natural catastrophes — In 2021, the U.S. experienced 20 separate billion-dollar weather and climate disasters, putting it in second place for the most disasters in a calendar year, behind the record 22 billion-dollar events in 2020.
4. COVID-19 pandemic — Pandemic risk dropped from the number two spot in the 2021 rankings as businesses have become more confident in their contingency plans and safety protocols.
"Many companies are taking advantage of the increased awareness of business interruption, and we have seen more organizations investing in tools and systems to improve transparency of supply chains, work through scenarios and update their business continuity," said Philip Beblo, global property industry lead for Allianz.
5. Regulatory and legal changes — Under the Biden administration, there's been an uptick in regulatory activity, including workplace safety standards for protecting workers against COVID-19 infection. There are also new state laws and regulations that require businesses to make operational and organizational changes to comply.
6. Climate change — The U.S. continues to see increases in the frequency and intensity of storms, wildfires and tornadoes, which are causing more expensive property damage, business interruption and insured losses.
"The risks to businesses from global warming are being experienced with increasing force and immediacy — as direct damage after extreme weather events, but also leading to tightening regulation, and as threats to brand and reputation," said Line Hestvik, chief sustainability officer at Allianz.
7. Fires and explosions — Fires (excluding wildfires) and explosions caused in excess of $15 billion worth of damage globally between 2013 and 2018, according to an Allianz analysis of 470,000 insurance industry claims during the period.
Besides property damage, a major fire or explosion can prevent companies from operating for some time and such incidents are the most frequent drivers of business interruption insurance claims.
8. Shortage of skilled workers — Another issue that the pandemic has exacerbated is the skilled worker shortage. Nearly seven in 10 companies reported talent shortages — the highest in 15 years, according to a ManpowerGroup survey.
As the economy has reopened in the wake of business closures during the start of the pandemic, companies in most sectors have had trouble finding new staff and hanging on to valued employees as competition for talent is fierce.
Maybe you’ve been here before. You’ve just come off the plane, picked up your baggage and gone to the rental car counter. You’re tired from the flight, about to begin an ambitious vacation or a challenging business project. And, this is the point at which you’re asked, “Do you want insurance with that?”
Most travelers, facing that question from the rental representative, have the vague notion that they don’t really need to buy rental car insurance – which somehow is covered already. With just enough doubt in their minds, and the need to make a quick decision, perhaps they buy it just to be safe.
So, which is it?
Do you need to buy rental car insurance or not?
Truth be told, there isn’t a one-size-fits-all answer. However, you can likely reach a conclusion you’re comfortable with by considering these three questions.
1. What Types of Rental Car Insurance Are Available?
Typically, car rental agencies will offer you four types of insurance to purchase:
2. What Rental Car Coverage Might I Already Have?
Start with your personal auto insurance. It’s likely that your policy will provide the same level of coverage for your rental as it does for your own car. That usually includes liability insurance, and, depending on the policy you purchased, may include collision, comprehensive and medical payments, too. There are exclusions, however. Some insurers won’t cover rentals in a foreign country, or rentals that are being used for business. Get in touch with your independent insurance agent to verify your coverages.
Next there’s your credit card. Most cards offer some degree of coverage, but it varies widely. Coverage is usually secondary, designed to step in and pick up where your auto insurance leaves off, and it tends to be mostly confined to collision, damage and theft. For coverage to apply, most cards require that you decline the rental company’s collision damage waiver and pay for the car in full with the card that provides the protection. Again, contact your card company to find out exactly what is covered.
Then, consider your health and life insurance, too. If you’re in an accident involving a rental car and you have these policies, you likely have coverage for your own costs. Plus, with your homeowners insurance, you may have personal property coverage to help repair or replace valuable belongings that are lost, damaged or stolen while you’re in a rental. Your deductible and policy limits will apply, and the same goes for renters insurance or condo insurance.
3. What Rental Coverage Might I Be Missing?
In the event something does happen to the rental car, you may be looking at loss of use and diminished value fees, and your regular policy may not cover them. Loss of use is the income that the rental agency loses due to the vehicle being in the shop for repairs, and diminished value is the calculated reduction in a vehicle’s resale value as the result of an accident. Credit cards sometimes cover these, but be aware that they may require documentation that rental agencies can be reluctant to provide.
So, before you make that next trip, give us a call and check with your credit card company. That way you’ll be ready to make an informed decision when you get to the rental car counter.
Reposted with permission from the original author, Safeco Insurance®.
Top image by Flickr user Timo Newton-Syms used under Creative Commons Attribution-Sharealike 2.0 license. Image cropped and modified from original.
As more Americans work from home than ever before, many employers are wondering about their obligations under OSHA as well as how to reduce the chances that workers may be injured while telecommuting.
Obviously, the chances of an injury when working from home are small. The most common issue that is likely to arise is long-term injuries from poor workstation design, which can result in carpal tunnel syndrome and other stress and ergonomic injuries that develop over time.
For the most part, employers should approach workplace safety for telecommuting workers as they would safety for office workers, particularly workstation design and arrangement (ergonomics) as well as work scheduling and distribution.
Duties under OSHA
OSHA's General Duty Clause applies to any place an employer has staff working, be that at the company's facilities or worksites, at a customer's worksite, or even if they work from home.
Under the clause, employers have a general duty to "furnish to each of his employee's employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees."
Fortunately, most workplace safety specialists say that employers have little responsibility in ensuring a safe workplace. In fact, OSHA has issued guidance stating that it:
Workers' comp still in play
While that is good news, employers are still responsible for any injuries an employee suffers while working from home under workers' compensation laws.
For an injury to be considered work-related it must:
With that in mind, employers do have an obligation to ensure that a home worksite is safe in order to prevent injuries, even if OSHA does not require it.
The international law firm of Foley & Lardner, LLP recommends that employers:
While you as an employer are not required under OSHA regulations to inspect your workers' home's for compliance, it is a good idea to give them guidelines for how to set up their home office and also work with them to supply any needed furniture or accessories they would need to safely carry out their work tasks.
You may also want to consider asking them to install a smoke alarm in their home and that they have a plan to evacuate in case of fire or other emergency. Also if they have a lot of electrical equipment, there should be sufficient ventilation.
The Trump Administration has issued a new rule that will require greater price transparency on the part of health insurers, including the rates charged by in-network physicians and copays and costs of drugs.
The final rule requires health plans and health insurers to disclose on a public website their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.
The aim of the new rule is to give health plan enrollees more information when it comes to making decisions when seeking out and price-comparing care and choosing medications. With more information about health care costs, health plan enrollees can:
The drug price transparency part of the final rule came as a surprise because it was not included in the original proposed regulations.
The new rules do not, however, take effect right away and different parts will be implement at different times. Nonetheless, it's important for health plan sponsors and employers to be aware of the rules as they will greatly affect how their employees access and shop for coverage and medications.
Most of the rules do not apply to grandfathered plans. Here's what they will do once they come into effect:
Transparency for enrollees
Insurers will be required to make available to health plan enrollees the following information:
This information must be provided through an online tool on their website and in paper form upon request. Items or services include encounters, procedures, medical tests, supplies, drugs, durable medical equipment, and fees (including facility fees).
Insurers will be required to make available an initial list of 500 shoppable services that will be determined by the Centers for Medicare and Medicaid, starting with the 2023 plan year. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after Jan. 1, 2024.
Health insurers will be required to make available to the public, consumers, researchers and others the following information in "machine-readable" files:
The idea behind these changes is to provide opportunities for detailed research studies, data analysis, and offer third party developers the ability to create private apps and websites to help consumers shop for health care services and prescription drugs.
These files are required to be made public starting with the 2022 plan year.
These are final rules but, as mentioned, the part of the rule that affects your group health plan and your employees doesn't take effect until 2023 as the industry will need time to prepare and comply.
Once the rules take effect, your covered employees should have a wealth of information at their fingertips when they are shopping and comparing health services and drug information.
Hurricanes can cause a tremendous amount of death and destruction. Longtime residents of coastal Florida, the Carolinas, Texas, Mississippi, Alabama and Louisiana are familiar with the drill - but there are always procrastinators.
Hurricane preparedness takes time. Don't leave it to the last minute. Here are some things to keep in mind when a storm is coming:
By understanding these guidelines, you can protect your home as well as you can and keep your family safe.
You will also have an easier time getting reimbursed by your insurance company for any damage.
As lawsuits against employers continue rising amid the coronavirus pandemic, some businesses are requiring workers to sign waivers absolving them of liability and responsibility should they contract the virus.
Eight percent of executives surveyed by law firm Blank Rome said they would require that their workers sign waivers of liability before returning to the workplace.
While employers are trying to protect themselves from a liability that didn't even exist a year ago, some human resources legal experts have expressed concerns that they may not be necessary and may be unenforceable.
The moves come as employers are wrestling with numerous risks that the pandemic has wrought, and with the U.S. Senate having proposed legislation that would limit the liability of employers for workers who become sick during the pandemic. A number of states have also enacted laws or emergency regulations that make it harder for employees to sue employers for negligence over COVID-19.
COVID-19-spurred employee lawsuits have mostly centered on employers not providing the proper protections for workers, discrimination or for being laid off for refusing to come to work.
Legal experts caution that employers cannot require workers to waive rights they may have, such as access to workers' compensation benefits or the right to file a complaint with OSHA.
They also say that some employers may consider waivers as a green light to not take precautions against COVID-19, but in such cases the waivers would likely not be legal.
If a worker claims they caught COVID-19 at work and the facts back that up, they would likely have access to workers' compensation benefits (some states even require it). But if the employer was negligent, the employee could have further legal avenues to pursue besides workers' compensation, rights that cannot legally be waived, lawyers say.
So even if an employee were to sign a document waiving their right to file a complaint if they feel their employer is being negligent, they may still have recourse.
Requiring workers to sign waivers could present a number of legal issues, according to the law website nolo.com, including:
While employees who refuse to sign a waiver of their company's liability may have grounds to challenge their employer, some liability lawyers say that employers instead of a waiver can ask their staff to sign a social contract that requires:
This type of agreement won't protect an employer from a lawsuit, but it does spell out that they are following authorities' recommendation for protecting employees.
While employees who refuse to sign a waiver of their company's liability could have grounds to sue, those who sign this type of acknowledgement of new workplace rules and government guidance are less likely to be successful if they are fired for not signing. This is because the acknowledgement is not forcing them to give up any of their rights and is rather for their and their co-workers' protection.
These social contracts also would provide workers with a list of their responsibilities when working during the COVID-19 pandemic, and outline what their employer is doing to protect them.
President Trump has issued executive orders aimed at reducing the cost of medications by tying Medicare payment for outpatient drugs to international prices, passing drug-maker rebates to patients and not middlemen, and allowing individuals to import prescription medications.
Another executive order aims to force community health centers that receive 340B drug discounts to pass discounts for insulin and injectable epinephrine on to patients.
Here's a run-down of the orders:
The Executive Order on Increasing Drug Importation to Lower Prices for American Patients calls for new regulations that would:
The system that Trump is proposing is reportedly modeled after new laws that took effect in Vermont in 2018, Florida in 2019 and then Colorado and Maine last year, allowing for the importation of certain prescription drugs from Canada.
Florida's bill directed the state's Agency for Health Care Administration to establish a Canadian Prescription Drug Importation Program and an International Prescription Drug Importation Program.
Vermont and Florida have already submitted proposals to the U.S. Department of Health and Human Services to import prescription drugs from Canada, as the president in recent weeks has reiterated his intention to allow states to do so.
Federal law already grants HHS the authority to allow drug imports, as long as the department's secretary certifies the imported drugs are safe and effective and would lower costs to U.S. consumers.
HHS and the Food and Drug Administration in early August unveiled two pathways that entities could use to import drugs.
Under one pathway, HHS and the FDA would use existing rulemaking authority to allow states, pharmaceutical manufacturers and pharmacists to develop pilot programs to import drugs from Canada "that are versions of FDA-approved drugs that are manufactured consistent with the FDA approval."
Eliminating secret deals
Another order would prohibit secret deals between drug makers and pharmacy benefit manager (PBM) middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter.
The Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen would pass drug-maker rebates to patients and allow them to apply the rebate to their cost-sharing, such as deductibles in Medicare Part D plans.
The order states that the any rebate rule could not be advanced unless the HHS secretary gave public confirmation that it would not raise premiums, taxpayer spending or out-of-pocket costs.
In particular, the proposed rule would exclude from safe-harbor protections under the anti-kickback statute price reductions that are not applied at the point-of-sale or other remuneration that drug manufacturers provide to health plan sponsors, pharmacies or PBMs in operating the Medicare Part D program.
It would also establish new safe harbors that would allow health plan sponsors, pharmacies and PBMs to apply discounts at the patient's point-of-sale in order to lower the patient's out-of-pocket costs.
This would be a significant step in getting drug-maker discounts to patients instead of the PBMs. One of the reasons pharmaceutical prices are so high is the complex mix of payers and negotiators that often separates the consumer from the manufacturer in the drug-purchasing process.
The result is that the prices patients see at the point of sale do not reflect the prices that their insurance companies, and PBMs hired by those companies, actually pay for medicines. Instead, PBMs negotiate significant discounts off of the list prices, sometimes up to 50% of the cost of the drug, and often the Medicare patient can never enjoy that discount.
International reference pricing
Another executive order, which hasn't yet been published publicly, would establish an international pricing index that would set the price Medicare Part B pays for the costliest medications covered under the program to the lowest price in other economically advanced countries.
However, Trump said his administration will hold the order until Aug. 24 because he may not implement it. He said he needs to meet with pharmaceutical executives first.
Epinephrine and insulin discounts
The Executive Order on Access to Affordable Life-saving Medications would require federally qualified health centers to pass along discounts on insulin and injectable epinephrine received from drug companies to certain low-income Americans.
Only patients with low incomes; those with high cost-sharing requirements for insulin or epinephrine; those with high, unmet deductibles; and/or those without health insurance would be eligible for the discount.
In all, Trump issued four executive orders that will require the Centers for Medicaid and Medicare Services to draft new regulations, which would likely not be completed by the end of the year. Regulations often take months to draft and then have to be sent out for public comment before final regs are written.
The regulations will likely only come to fruition if Trump wins the presidency for a second term, as any regulatory initiatives in mid-stream would probably otherwise be abandoned.
For 2017, private flood insurance statements had to be reported. This was the first time that such information was required to be reported. The Insurance Information Institute released a list of the market's biggest insurance companies offering the coverage based on previously gathered data and they said that over 80 percent of the market share was held by these leading companies. The top company alone held nearly 55 percent. Total premiums written by all companies totaled over $375 million.
What is Private Flood Insurance?
This type of coverage is available for both residential and commercial properties. The policies cover excess flood and flood peril, and they do not include damages from sewer backups or crop flooding. In the past, only the government offered flood insurance. However, private insurers are becoming more comfortable offering this coverage today because of the following reasons:
Why Private Insurance is a Good Solution
After several catastrophic hurricanes over the past decade, the National Flood Insurance Program offered by the Federal Emergency Management Agency took a major financial hit. It is currently billions of dollars in debt. This has also helped open the market for private insurance companies to offer flood protection. Lawmakers like the solution since it will help get the NFIP out of debt faster.
In early 2017, the NFIP transferred financial risks totaling $1 billion to private insurers. This was done through reinsurance, which FEMA gained approval for, thanks to the Homeowner Flood Insurance Affordability Act of 2014 and the Biggert-Waters Flood Insurance Reform Act of 2012. More options and competitive pricing are two benefits that an improved private flood insurance market would create.
A Peek At Potential Savings
KatRisk and Milliman partnered to collect and analyze data from three states that have been affected by catastrophic hurricanes and face higher risks of future damages. The organizations looked at data from Louisiana, Texas and Florida. These three states represent over 55 percent of the NFIP's active policies in the USA. The researchers compared NFIP premiums to several private insurance premium models.
Research showed that more than 75 percent of Florida homeowners would see lower premiums with private insurers. More than 90 percent of Texas homeowners would save money, and nearly 70 percent of Louisiana homeowners would see a premium drop. About 70 percent of the Texas homes included in the model would qualify for a premium that is one-fifth of the NFIP's equivalent policy. The ratio dropped to about 45 percent in Florida and a little over 40 percent in Louisiana. However, researchers also found that about five percent of the modeled homes in Texas would see premiums that were higher than the NFIP's, and the ratio increased to about 15 percent in Florida and over 20 percent in Louisiana.
As researchers continue to track state-specific data in the coming years, more property owners will be making the switch to save money. To learn more about private flood insurance and if it is a good solution for individual needs, contact us.
Almost everyone has a risk of their home being flooded, regardless of where they live. And now as flooding has become an annual threat to many communities across the country, even areas that were not considered flood-prone are also at risk.
There was record rain and snow in many parts of the country in the early part of the year, and many areas can therefore expect flooding.
According to the Federal Emergency Management Agency, more than 20% of all flood insurance claims come from areas outside of high-risk flood zones - and that number is rising with each passing year.
That still means the vast majority come from high-risk areas. How can a property owner find out what their flood risk is?
Gauging your flood risk
FEMA considers a property to be at high risk of flood if there is at least a one-in-four chance of flooding during the life of a 30-year mortgage.
Geographic areas with this risk are known as special flood hazard areas (SFHAs). Federal regulations require federally regulated or insured mortgage lenders to confirm that mortgaged properties in these areas carry flood insurance.
The traditional way to determine a property's flood risk is to locate it on a flood insurance rate map (FIRM). FEMA publishes these maps based on geographic survey data. They are the official depictions of flood hazards in a locality.
FIRMs are freely available for review at the Flood Map Service Center on FEMA's web site. As a property owner, you can view your flood risk by entering your address in the search field.
Flood maps assign each area in a community to labeled flood zones. Areas with low-to-moderate risks of flooding are assigned to zones with labels beginning with the letters B, C, X or a shaded X. SFHAs are designated with the letters A or V. These areas are shaded on the maps for easy identification.
Property owners can also search for their flood risks at FEMA's flood insurance consumer web site, www.floodsmart.gov. By entering your address in the fields on the home page, you can quickly learn whether you face a low-to-moderate or high risk.
The site offers other valuable tools, such as an estimator that can calculate how much financial damage a given amount of water (two inches, four inches, etc.) would cause in homes of various sizes.
For example, six inches of water in a 2,000 square foot home would cause $39,150 in damage.
FEMA also offers a suite of flood risk products that go beyond the information provided in a FIRM. They include:
These products are helpful for community planners, but individual property owners can also use them to get a clear idea of their flood risks.
Elevation certificates may also be on file with local governments for certain properties. These documents show the elevation of the lowest floor of a building (including the basement) compared to the base flood elevation for the area.
An elevation certificate demonstrates community compliance with flood-plain management laws and is used to set appropriate flood insurance premiums.
A flood can be every bit as catastrophic as a fire. It is worthwhile for property owners to learn their flood risk and take steps to reduce it. Additionally, with the increasing risk of flooding in non-flood-plain areas, if you live near a flood plain, you may want to secure flood insurance.