In 2002, President George W. Bush signed the Terrorism Risk Insurance Act (TRIA) requiring insurance carriers and the federal government to establish a risk-sharing partnership for future losses. It was created as a result of 9/11 as a temporary measure to allow time for insurance carriers to develop their own solutions. Originally set to expire in 2005, the act has been extended twice, and will now expire in 2014.

“The private markets alone cannot and will not provide the level of terrorism insurance our economy demands,” says Marc McTeague, president of Best Hoovler McTeague Insurance Services, a member of SeibertKeck. “The threat of terrorism has become a greater concern for businesses in today’s uncertain and rapidly evolving global climate. It should continue to be part of a comprehensive risk management program.”

Smart Business spoke with McTeague about terrorism coverage today and where problems still occur.

Why was the TRIA created and how does it work?

For property and casualty insurers, 9/11 losses paid out a reported $40 billion from property, business interruption, aviation, workers’ compensation, liability and life insurance lines. As the largest disaster in the industry’s history, carriers were reluctant to continue providing coverage. State regulators agreed to allow carriers to exclude terrorism from policies, and coverage was soon unavailable or extremely expensive.

The TRIA was created as a temporary federal program of shared public and private compensation for insured losses to allow the private market to stabilize, protect consumers by ensuring the availability and affordability of insurance for terrorism risks, and preserve state regulation of insurance. Carriers set the price of coverage within the limits imposed by regulations.

With the federal backstop in place, commercial lines policyholders could choose to purchase or reject terrorism coverage from existing insurance programs; the program doesn’t extend to personal lines policyholders. This offer continues today with most coverage lines, except workers’ compensation policies where insurers and qualified self-insured employers cannot exclude terrorism coverage because of lifetime medical care for on-the-job duties.

What changes were made when the program was extended?

In 2007, the government modified and extended the act through Dec. 31, 2014. Several provisions changed, including:

  • Revising the definition of a certified act of terrorism to eliminate the requirement that the individual(s) is acting on behalf of a foreign person or interest. Some property insurers add exclusionary language related to non-certified terrorism coverage.

  • Updating the payout cap to $100 billion per year for insured losses.

  • Requiring the Treasury Department to establish a procedure for allocation of pro-rata payments in the event that a terrorism loss exceeds the cap.

When purchasing terrorism coverage, how much do premiums increase?

The cost for the TRIA on an average risk is usually a single-digit percentage of the policy premium. Higher risk businesses such as financial institutions, real estate, health care and utility companies tend to be in the double-digit percentages.

Many policyholders, regardless of size, continue to decline terrorism coverage — not considering themselves targets. Larger risks often feel the coverage doesn’t provide enough to protect their exposures.

What are some of the continuing problems with terrorism coverage?

It is the insurance industry’s goal to work with Congress on creating terrorism insurance renewal past 2014. Terrorism coverage provides market stability.

There will be a significant effect on real estate lending if this backstop disappears.  Mortgage-backed securities, for example, will be in default. Private markets aren’t able to offer coverage without the federal backstop and cannot offer the level of insurance our economy demands.

The Government Accountability Office is working to assess options and review proposals, and Congress is encouraging greater private market participation. We’re optimistic that a long-term solution will be reached.

Marc McTeague is the president of Best Hoovler McTeague Insurance Services, a member of SeibertKeck. Reach him at (614) 246-RISK or mmcteague@bhmins.com.

 

WEBSITE: To keep up with the latest insurance news and how your company could be impacted, sign up to receive our newsletter.

 

Insights Business Insurance is brought to you by SeibertKeck

Published in Columbus

An effective safety program gives your company a competitive advantage over one with careless operations. Safety awareness lowers your workers’ compensation rates through premium rebates and discounts, and better rates from less frequent and less severe claims.

“I can walk into a manufacturing plant and sense whether the company has a strong focus on their operations and safety. And, nine out of 10 times, I’m correct,” says Richard B. Hite, CEO of SeibertKeck Insurance Agency.

Smart Business spoke with Hite about how safety programs and a safety culture factor into decreasing your workers’ compensation premiums.

How can you use safety to take advantage of workers’ compensation rebates and discounts?

As one of four states that don’t allow employers to buy workers’ compensation from private carriers, Ohio and its Bureau of Workers' Compensation (BWC) have a number safety programs (www.OhioBWC.com/employer/programs/safety). The three fundamental ways to get credits to your basic rates, depending on whether you have a basic or advanced safety program, are the:

  • Drug-free safety program, a premium discount of 4 to 7 percent for implementing a drug-free program that promotes occupational safety and addresses the use and misuse of alcohol and drugs in the workplace.

  • Safety council rebate program, a 2 percent rebate for active participation in a safety council, as well as another 2 percent possible based on the frequency and severity of your workers’ compensation claims.

  • Destination excellence program, up to 3 percent refunded based on industry-specific safety discounts.

Additionally, based on your company’s total losses and their severity, you get experience modification — a credit, or debit if you’ve had claims — to your base rates. The BWC also administers workplace wellness grants, which by establishing a more healthy and aware workforce can  reduce the frequency and severity of claims in the future.

Your property and casualty commercial insurance carrier is another source for safety assistance to help reduce claims. The national carriers already provide out-of-state workers’ compensation, so they have programs and information that your company may be able to take advantage of as a client.

How can you ensure employees actually follow your safety practices?

Many business owners examine their prior premiums and rates to see the total savings from BWC credits, rebates and discounts, and then share half with employees as a safety bonus. Employees know if they stay safe the employer will, for example, hand out gift cards. Also, if a department has no workers’ compensation claims for a certain quarter, the boss could buy everyone pizza.

Another incentive is posting accomplishments — the sign that says ‘We’ve had X consecutive days of no workers’ compensation losses.’ You might not think it works, but employees don’t want to be the one person to mess up, so they are more aware and take extra time.

Your safety committee should be helping with education and awareness. First, you train the trainers at monthly meetings, such as bringing in a loss control engineer or practical exercises like the proper way to lift a 100-pound object. Then, the committee members go down to the specific departments, which already should have safety resources for individual jobs.

How else can you institute a safety culture?

The written safety plan needs to be reviewed by employees, so make employees sign a statement that they read it. Post safety rules in relevant places — the BWC can provide posters. When new employees go through safety training, make sure you’re refreshing the memory of existing employees. Keep your job analyses current and match the right employees to the right tasks. An improperly trained employee who’s lifting and bending all day is an accident waiting to happen.

It’s only after you establish a strong safety culture to keep frequency and severity of claims down that you can think about the next level where you can get in a group or a retrospective rating program to earn your own rates.

Richard B. Hite is the CEO of the SeibertKeck Insurance Agency. Reach him at (330) 865-6573 or rhite@seibertkeck.com.

 

Website: To keep up with the latest insurance news and how your company could be impacted, sign up to receive our newsletter at www.seibertkeck.com.

 

Insights Business Insurance is brought to you by SeibertKeck

 

Published in Akron/Canton

An effective safety program gives your company a competitive advantage over one with careless operations. Safety awareness lowers your workers’ compensation rates through premium rebates and discounts, and better rates from less frequent and less severe claims.

“I can walk into a manufacturing plant and sense whether the company has a strong  focus on their operations and safety. And, nine out of 10 times, I’m correct,” says Cliff Baseler, vice president at Best Hoovler Insurance Services Inc., member of the SeibertKeck Group.

Smart Business spoke with Baseler about how safety programs and a safety culture factor into decreasing your workers’ compensation premiums.

How can you use safety to take advantage of workers’ compensation rebates and discounts?

As one of four states that don’t allow employers to buy workers’ compensation from private carriers, Ohio and its Bureau of Workers' Compensation (BWC) have a number safety programs (www.OhioBWC.com/employer/programs/safety). The three fundamental ways to get credits to your basic rates, depending on whether you have a basic or advanced safety program, are the:

  • Drug-free safety program, a premium discount of 4 to 7 percent for implementing a program that promotes occupational safety and addresses the use and misuse of alcohol and drugs in the workplace.

  • Safety council rebate program, a 2 percent rebate for active participation in a safety council, as well as another 2 percent possible based on the frequency and severity of your workers’ compensation claims.

  • Destination excellence program, up to 3 percent refunded based on industry-specific safety discounts.

Additionally, based on your company’s total losses and their severity, you get experience modification — a credit, or debit if you’ve had claims — to your base rates. The BWC also administers workplace wellness grants, which by establishing a more healthy and aware workforce can  reduce the frequency and severity of claims in the future.

Your property and casualty commercial insurance carrier is another source for safety assistance to help reduce claims. The national carriers already provide out-of-state workers’ compensation, so they have programs and information that your company may be able to take advantage of as a client.

How can you ensure employees actually follow your safety practices?

Many business owners examine their prior premiums and rates to see the total savings from BWC credits, rebates and discounts, and then share half with employees as a safety bonus. Employees know if they stay safe the employer will, for example, hand out gift cards. Also, if a department has no workers’ compensation claims for a certain quarter, the boss could buy everyone pizza.

Another incentive is posting accomplishments — the sign that says ‘We’ve had X consecutive days of no workers’ compensation losses.’ You might not think it works, but employees don’t want to be the one person to mess up, so they are more aware and take extra time.

Your safety committee should be helping with education and awareness. First, you train the trainers at monthly meetings, such as bringing in a loss control engineer or practical exercises like the proper way to lift a 100-pound object. Then, the committee members go down to the specific departments, which already should have safety resources for individual jobs.

How else can you institute a safety culture?

The written safety plan needs to be reviewed by employees, so make employees sign a statement that they read it. Post safety rules in relevant places — the BWC can provide posters. When new employees go through safety training, make sure you’re refreshing the memory of existing employees. Keep your job analyses current and match the right employees to the right tasks. An improperly trained employee who’s lifting and bending all day is an accident waiting to happen.

It’s only after you establish a strong safety culture to keep frequency and severity of claims down that you can think about the next level where you can get in a group or a retrospective rating program to earn your own rates.

Cliff Baseler is a vice president at Best Hoovler Insurance Services Inc., member of the SeibertKeck Group. Reach him at (614) 246-7475 or cbaseler@bhmins.com.

 

Website: To keep up with the latest insurance news and how your company could be impacted, sign up to receive our newsletter at www.seibertkeck.com.

 

Insights Business Insurance is brought to you by SeibertKeck

 

Published in Columbus

Having a driver training or fleet safety program is likely something your insurance company already has on its radar. Companies with five or more vehicles and a history of claims could be required to complete the insurance company’s fleet seminar or safe driving training.

But even if your company has a good driving record, some type of driver safety class and/or additional training benefits your business directly, as well as the insurance company.

“It does have an impact on your rates, only because if you do implement a fleet training seminar, each year or every other year, you will start to see an improvement in your rates because it’s less likely that you’re going to have an accident,” says Todd Winter, executive vice president at SeibertKeck.

Smart Business spoke with Winter about the importance of driver training and steps to consider taking that could help you maintain a motor vehicle safety program in your workplace.

What’s the first step to driver safety for business owners?

Business auto happens to be one of the bigger exposures to a business because, if there’s an accident, depending on injuries, it can be a pretty significant. So first, you want to start with employee drivers who have a good driving record.

If job candidates are applying for a position that requires them to drive, you can require a check of their motor vehicle report to make sure they are acceptable. Insurance carriers can provide you with what they recommend to be acceptable. Of course, if their record were clear, that person would be a good choice.

What are some conditions that affect auto rates or how much training employees need?

A number of things affect the underwriting, such as the radius of operation — a long distance radius of 200 or more miles could mean a higher rate. Other considerations can depend on the size and weight of the vehicles.

Often companies don’t have a choice with what kind or how much training employees need. Many insurance companies provide it through their loss control department at no cost. A loss control engineer may require drivers to attend a two- to three-hour class and take a test, or just listen to a seminar.

What, then, can employers do to create and maintain a motor vehicle safety program in the workplace?

Having formalized vehicle maintenance and a safe driving program of some kind are must-have risk management tools. However, some employers may feel reluctant to institute them because of the amount of time to set them up in their office. The idea is that improving driver training and fleet safety programs only can help your company, as the business auto exposure is lowered.

Some best practices that could help are:

  • Safety policy statement indicating that the company has established a fleet safety policy to emphasize a commitment to the safety of its employee drivers and the general public.

  • Seat belt use to reduce the severity of injuries.

  • Restrictions on personal vehicles for employees using a personal auto for company use.

  • Driver selection and qualification, including application for employment, reference checks, motor vehicle report investigations and an annual review of driving records.

  • Vehicle inspection and maintenance.

  • Post notices and signs in your building and in the yard reminding drivers to be safe and maintain their vehicle.

  • Driver training annually, either online or conducted by a loss control engineer.

  • Accident reporting and recordkeeping.

Keep up with the latest insurance news and how your company could be impacted by signing up for SeibertKeck's newsletter.

 

Todd Winter is executive vice president at SeibertKeck. Reach him at (330) 865-6572 or twinter@seibertkeck.com.

Insights Business Insurance is brought to you by SeibertKeck

Published in Akron/Canton

Having a driver training or fleet safety program is likely something your insurance company already has on its radar. Companies with five or more vehicles and a history of claims could be required to complete the insurance company’s fleet seminar or safe driving training.

But even if your company has a good driving record, some type of driver safety class and/or additional training benefits your business directly, as well as the insurance company.

“It does have an impact on your rates, only because if you do implement a fleet training seminar, each year or every other year, you will start to see an improvement in your rates because it’s less likely that you’re going to have an accident,” says Marc McTeague, president of Best Hoovler McTeague Insurance Services, a member of SeibertKeck.

Smart Business spoke with McTeague about the importance of driver training and steps to consider taking that could help you maintain a motor vehicle safety program in your workplace.

What’s the first step to driver safety for business owners?

Business auto happens to be one of the bigger exposures to a business because, if there’s an accident, depending on injuries, it can be a pretty significant. So first, you want to start with employee drivers who have a good driving record.

If job candidates are applying for a position that requires them to drive, you can require a check of their motor vehicle report to make sure they are acceptable. Insurance carriers can provide you with what they recommend to be acceptable. Of course, if their record were clear, that person would be a good choice.

What are some conditions that affect auto rates or how much training employees need?

A number of things affect the underwriting, such as the radius of operation — a long distance radius of 200 or more miles could mean a higher rate. Other considerations can depend on the size and weight of the vehicles.

Often companies don’t have a choice with what kind or how much training employees need. Many insurance companies provide it through their loss control department at no cost. A loss control engineer may require drivers to attend a two- to three-hour class and take a test, or just listen to a seminar.

What, then, can employers do to create and maintain a motor vehicle safety program in the workplace?

Having formalized vehicle maintenance and a safe driving program of some kind are must-have risk management tools. However, some employers may feel reluctant to institute them because of the amount of time to set them up in their office. The idea is that improving driver training and fleet safety programs only can help your company, as the business auto exposure is lowered.

Some best practices that could help are:

  • Safety policy statement indicating that the company has established a fleet safety policy to emphasize a commitment to the safety of its employee drivers and the general public.

  • Seat belt use to reduce the severity of injuries.

  • Restrictions on personal vehicles for employees using a personal auto for company use.

  • Driver selection and qualification, including application for employment, reference checks, motor vehicle report investigations and an annual review of driving records.

  • Vehicle inspection and maintenance.

  • Post notices and signs in your building and in the yard reminding drivers to be safe and maintain their vehicle.

  • Driver training annually, either online or conducted by a loss control engineer.

  • Accident reporting and recordkeeping.

Keep up with the latest insurance news and how your company could be impacted by signing up for SeibertKeck's newsletter.

 

Marc McTeague is the president of Best Hoovler McTeague Insurance Services, a member of SeibertKeck. Reach him at (614) 246-RISK or mmcteague@bhmins.com.

Insights Business Insurance is brought to you by SeibertKeck

Published in Columbus

According to the U.S. Department of Labor, Bureau of Labor Statistics, the longer a worker is off, the less likely he or she is to return to work.

• After a six-month leave, there is only a 50 percent chance an employee will return to work.

• After a one-year leave, the chances drop to 25 percent.

• More than half of employees away from work more than 14 days experience financial difficulty.

A formalized return to work program is designed to help injured workers get back to work quickly and safely. Often, this will speed the employee’s recovery, avoid costly litigation and even improve employee relations.

“It’s beneficial because the employee wants to get back to work; they want to get healthy,” says Craig Hassinger, President of SeibertKeck. “Because you’re engaging them in the process, it helps with a positive mental attitude — they’re active, they’re involved and they’re getting better.”

Smart Business spoke with Hassinger — with assistance from Westfield Insurance — about how to set up and run your return to work program.

How does workers’ compensation affect insurance rates?

Rates are determined based on your loss experience. As your claims activity and the amount of claims paid increases, your premium rises. Although equally important, the payout probably has a bigger effect on overall rates.

That’s why return to work programs are so important because the quicker you can get people back to work, the less payout you’ll have. Back at work, they can do work that benefits the company and removes them from the workers’ compensation payroll.

How should an employer manage injuries right after they happen?

With early injury management, have a process for employees to immediately report when they get hurt. Communicating early reinforces the employer’s interest in the employee’s health and well-being.

Sometimes employees think they are doing you a favor by not telling you, or they don’t report a claim for fear of losing their jobs. Clearly lay out to employees that injuries happen, and you want to get them healthy again and learn from it so you can make improvements.

What role does the medical provider play?

The key is to communicate with physicians, ensuring they understand what kind of return to work program you’ve established. The medical provider can assist in identifying a position within the company that doesn’t hinder the employee’s recovery.

When should you make the return to work offer?

When possible, after physician approval, offer work to the injured employee. The offer should be in writing and describe the temporary work and conditions. It also should outline the expectations for employee and supervisor.

Once the employee is back at work, how should the case be managed?

A case manager should be assigned and work with the injured employee, physicians, your insurance carrier and management team. Typically the case manager is somebody in the human resources department or, depending on the size of company, anybody with a leadership role.

What’s the key to continually improving your return to work program?

As with any program, continually review successes and trends with all workers’ compensation claims. Adjust your return to work program and safety manuals to reduce future claims.

Your insurance broker can play a vital role in developing a return to work program or assisting to improve a current program. Look for a carrier with a strong risk management department.

If you rarely have workers’ compensation claims should you still have a return to work program?

Everybody should have some type of return to work program. In most cases, everybody is going to have a claim at some point.

Craig Hassinger is President of SeibertKeck. Reach him at (330) 867-3140 or chassinger@seibertkeck.com.

Visit Westfield Insurance at www.westfieldinsurance.com.

Insights Business Insurance is brought to you by SeibertKeck

Published in Akron/Canton

According to the U.S. Department of Labor, Bureau of Labor Statistics, the longer a worker is off, the less likely he or she is to return to work.

• After a six-month leave, there is only a 50 percent chance an employee will return to work.

• After a one-year leave, the chances drop to 25 percent.

• More than half of employees away from work more than 14 days experience financial difficulty.

A formalized return to work program is designed to help injured workers get back to work quickly and safely. Often, this will speed the employee’s recovery, avoid costly litigation and even improve employee relations.

“It’s beneficial because the employee wants to get back to work; they want to get healthy,” says Cliff Baseler, Vice President at Best Hoovler Insurance Services, Inc., a SeibertKeck company. “Because you’re engaging them in the process, it helps with a positive mental attitude — they’re active, they’re involved and they’re getting better.”

Smart Business spoke with Baseler — with assistance from Westfield Insurance — about how to set up and run your return to work program.

How does workers’ compensation affect insurance rates?

Rates are determined based on your loss experience. As your claims activity and the amount of claims paid increases, your premium rises. Although equally important, the payout probably has a bigger effect on overall rates.

That’s why return to work programs are so important because the quicker you can get people back to work, the less payout you’ll have. Back at work, they can do work that benefits the company and removes them from the workers’ compensation payroll.

How should an employer manage injuries right after they happen?

With early injury management, have a process for employees to immediately report when they get hurt. Communicating early reinforces the employer’s interest in the employee’s health and well-being.

Sometimes employees think they are doing you a favor by not telling you, or they don’t report a claim for fear of losing their jobs. Clearly lay out to employees that injuries happen, and you want to get them healthy again and learn from it so you can make improvements.

What role does the medical provider play?

The key is to communicate with physicians, ensuring they understand what kind of return to work program you’ve established. The medical provider can assist in identifying a position within the company that doesn’t hinder the employee’s recovery.

When should you make the return to work offer?

When possible, after physician approval, offer work to the injured employee. The offer should be in writing and describe the temporary work and conditions. It also should outline the expectations for employee and supervisor.

Once the employee is back at work, how should the case be managed?

A case manager should be assigned and work with the injured employee, physicians, your insurance carrier and management team. Typically the case manager is somebody in the human resources department or, depending on the size of company, anybody with a leadership role.

What’s the key to continually improving your return to work program?

As with any program, continually review successes and trends with all workers’ compensation claims. Adjust your return to work program and safety manuals to reduce future claims.

Your insurance broker can play a vital role in developing a return to work program or assisting to improve a current program. Look for a carrier with a strong risk management department.

If you rarely have workers’ compensation claims should you still have a return to work program?

Everybody should have some type of return to work program. In most cases, everybody is going to have a claim at some point.

Cliff Baseler is vice president at Best Hoovler Insurance Services Inc., a SeibertKeck company. Reach him at (614) 246-7475 or cbaseler@bhmins.com.

Visit Westfield Insurance at www.westfieldinsurance.com.

Insights Business Insurance is brought to you by SeibertKeck

Published in Columbus

’Twas the night before Christmas and Santa was in doubt. He read his insurance policy and wondered what was left out? He sees his agent but once a year, and his policy and coverages are not so clear …

“We are all busy — sometimes too busy — especially around the holidays, and many business owners put off looking at their insurance,” says Andrew Rowles, vice president at SeibertKeck Insurance Agency. “It is far from the most important item in their mind.”

As the holidays approach, Smart Business spoke with Rowles about insuring one of the most familiar companies we all know — Santa Claus, CEO of the North Pole.

How does Santa know if he should purchase a liability insurance policy?

Santa is liable for the products he makes, along with potential property damage from coming down your chimney. To cover this exposure, Santa, just like every other company, should purchase a comprehensive general liability policy. Reviewing this with your agent to determine the appropriate limit specific to your risk management plan is key to defending against losses. Keep in mind, there are exclusions in a liability form that can limit coverage. For example, your policy excludes coverage for ‘your work’ in a typical CGL form.

How does Santa properly insure the North Pole operations facility?

Similar to many of today’s large corporations, there are many complexities to an insurance policy. Here is a quick overview of how Santa might cover his facilities.

  • North Pole — Since no one owns the location, he must have a tenant betterments and improvements policy to cover the buildout of the workshop.

  • Toys — Since Santa ships only by air freight, he should purchase business personal property off premise or, depending on the contract, an ocean cargo policy to cover the inventory when in transit.

  • Elves’ tools — Santa should have employees’ tools coverage under the property form for the extra small equipment his workers bring to the workshop. One reason this is important to review is many policies limit the amount provided for theft under the property form unless a specific limit is provided.

  • Reindeer insurance — These are expensive livestock that Santa should insure against mortality, loss of use and major medical. So don’t worry about that hole in your roof, if Rudolph breaks a leg; Santa has it covered.

  • The sleigh — This should be on an inland marine form. Like forklifts that your company sends to multiple locations, Santa uses this valuable equipment all over the world.

  • Workshop interruption — Santa works year-round to get ready for Christmas. Losing the workshop for just one day could make a difference between Dec. 25 and Dec. 26. Business interruption insurance would ensure that Santa has adequate cash on hand to make sure he meets his obligations, continues to employ the elves and could set up a temporary facility at the South Pole.

Why does Santa need directors and officers insurance?

We all know about how Santa determines who is ‘naughty’ and ‘nice.’ Business leaders make business decisions every day that could impact others, just like Santa does. Directors and officers liability coverage pays for defense in a lawsuit. If purchased on a duty to defend basis, the insurance company will supply expert counsel for a suit not resulting from bodily injury or property damage. Just wondering what list your insurance agent would be on?

Now that the world is in cyberspace, how does that impact Santa?

It’s true kids can now email their letters to Santa. Most insurance policies do not cover blogs, emails or electronic messages of any kind under liable and slander. Cyber liability coverage would protect Santa from any electronic communications by him, or his elves, that might be the subject of a suit, breach of security or business interruption.

What if the reindeer sued because of who Santa promoted to lead the sleigh?

Employment practices liability insurance (EPLI) is often a missed coverage in a risk management program. EPLI was developed to protect the employer from losses not covered by directors and officers or general liability. This form applies to discrimination, wrongful termination, failure to promote, sexual harassment, wage and hour, and whistle-blowers claims. This protects Santa and Mrs. Claus, as well as elves that supervise others working at the North Pole.

What if Santa uses the 401(k) contributions to upgrade the sleigh?

Under the Employee Retirement Income Security Act (ERISA), all 401(k) plans must be insured up to 10 percent of the plans’ assets for theft. So if Santa misappropriates funds, the elves’ retirement fund is OK. This is purchased under an ERISA bond or endorsing the crime policy.

How can Santa be ready for what the workshop is like after Christmas day?

All year, Santa’s helpers were busy working late hours. This can cause unwanted tension in the workplace and irritable elves could finally lash out. As an employer, you can purchase protection against the expenses that result from incidences of workplace violence. These can include the cost to hire independent security consultants, public relations experts, business interruption expenses and payment of death benefits.

Unfortunately, the ideal insurance policy is not gift wrapped and waiting for you under the tree. Business leaders need to invest their time meeting with an agent committed to helping you manage your risks to develop the right risk management plan and coverage to protect your company.

But I heard him exclaim, ere he drove out of sight, Happy Holidays to all, all my coverages are right …

Andrew Rowles is a vice president at SeibertKeck Insurance Agency. Reach him at (330) 865-6587 or arowles@seibertkeck.com.

Insights Business Insurance is brought to you by SeibertKeck Insurance Agency

Published in Akron/Canton

’Twas the night before Christmas and Santa was in doubt. He read his insurance policy and wondered what was left out? He sees his agent but once a year, and his policy and coverages are not so clear …

“We are all busy — sometimes too busy — especially around the holidays, and many business owners put off looking at their insurance,” says Marc McTeague, president at Best Hoovler McTeague Insurance Services, a member of the SeibertKeck Group. “It is far from the most important item in their mind.”

As the holidays approach, Smart Business spoke with McTeague about a look at insuring one of the most familiar companies we all know — Santa Claus, CEO of the North Pole.

How does Santa know if he should purchase a liability insurance policy?

Santa is liable for the products he makes, along with potential property damage from coming down your chimney. To cover this exposure, Santa should purchase a comprehensive general liability policy. Reviewing this with your agent to determine the appropriate limit specific to your risk management plan is key to defending against losses. Keep in mind, there are exclusions that can limit coverage. For example, your policy excludes coverage for ‘your work’ in a typical CGL form.

How does Santa properly insure the North Pole operations facility?

Similar to many of today’s large corporations, there are many complexities to an insurance policy. Here is a quick overview of how Santa might cover his facilities.

  • North Pole — Since no one owns the location, he must have a tenant betterments and improvements policy to cover the build-out of the workshop.

  • Toys — Since Santa ships only by air freight, he should purchase business personal property off premise or, depending on the contract, an ocean cargo policy to cover the inventory when in transit.

  • Elves’ tools — Santa should have employees’ tools coverage under the property form for the extra small equipment his workers bring to the workshop. Many policies limit the amount provided for theft under the property form unless a specific limit is provided.

  • Reindeer insurance — These are expensive livestock that Santa should insure against mortality, loss of use and major medical. So don’t worry about that hole in your roof, if Rudolph breaks a leg; Santa has it covered.

  • The sleigh — This should be on an inland marine form. Like forklifts that your company sends to multiple locations, Santa uses this valuable equipment all over the world.

  • Workshop interruption — Santa works year-round to get ready for Christmas. Losing just one day could make a difference between Dec. 25 and Dec. 26. Business interruption insurance would ensure that Santa has adequate cash on hand to met his obligations, continues to employ the elves and could set up a temporary facility at the South Pole.

Why does Santa need directors and officers insurance?

We all know about how Santa determines who is ‘naughty’ and ‘nice.’ Business leaders make business decisions every day that could impact others just like Santa does. Directors and officers liability coverage pays for defense in a lawsuit. If purchased on a duty to defend basis, the insurance company will supply expert counsel for a suit not resulting from bodily injury or property damage. Just wondering what list your insurance agent would be on?

Now that the world is in cyberspace, how does that impact Santa?

It’s true kids can now email their letters to Santa. Most insurance policies do not cover blogs, emails or electronic messages of any kind under liable and slander. Cyber liability coverage would protect Santa from any electronic communications by him, or his elves, that might be the subject of a suit, breach of security or business interruption.

What if the reindeer sued because of who Santa promoted to lead the sleigh?

Employment practices liability insurance (EPLI) is often a missed coverage in a risk management program. EPLI was developed to protect the employer from losses not covered by directors and officers or general liability. This form applies to discrimination, wrongful termination, failure to promote, sexual harassment, wage and hour, and whistle-blowers claims. This protects Santa and Mrs. Claus, as well as elves that supervise others working at the North Pole.

What if Santa uses the 401(k) contributions to upgrade the sleigh?

Under the Employee Retirement Income Security Act (ERISA), all 401(k) plans must be insured up to 10 percent of the plans’ assets for theft. So if Santa misappropriates funds, the elves’ retirement fund is OK. This is purchased under an ERISA bond or endorsing the crime policy.

How can Santa be ready for what the workshop is like after Christmas day?

All year Santa’s helpers were busy working late hours. This can cause unwanted tension in the workplace and irritable elves could finally lash out. As an employer, you can purchase protection against the expenses that result from incidences of workplace violence. These can include the cost to hire independent security consultants, public relations experts, business interruption expenses and payment of death benefits.

Unfortunately, the ideal insurance policy is not gift wrapped and waiting for you under the tree. Business leaders need to invest their time meeting with an agent committed to helping you manage your risks to develop the right risk management plan and coverage to protect your company. But I heard him exclaim, ere he drove out of sight, Happy Holidays to all, all my coverages are right …

Marc McTeague is president of Best Hoovler McTeague Insurance Services, a member of the SeibertKeck Group. Reach him at (614) 246-RISK or mmcteague@bhmins.com.

Insights Business Insurance is brought to you by SeibertKeck Insurance Agency

Published in Columbus

The insurance market is always cycling between hard and soft. As it continues to firm, employers will have fewer low-price options.

Expect your broker to communicate with you regarding what’s coming up, with respect to firming prices, says Craig Hassinger, president of SeibertKeck. In this type of environment — even if it’s not a typical market turn — employers have to take the initiative.

“Business owners need to proactively work to eliminate risk by putting in place policies and procedures that need to be formally written down and followed,” he says.

Smart Business spoke with Hassinger about how employers can react to the hardening market and future premium increases.

What’s the difference between a soft and hard insurance market?

In a soft market, insurance companies are looking to gain market share and grow, as they take on more risk at lower prices. This is good for the insured to a point because there are a lot of options. However, it’s called a cycle for a reason, and that soft market tends to quickly change — and competitive insurance options dry up.  As insurance companies have taken on more underpriced risk, they start to get bad results, which eats away at their surplus and they start to pull back. This turn is usually predicated after a catastrophe such as the 9/11 terrorist attack.

What are the conditions of the current market?

Rather than just one catastrophe, the turn that’s beginning now is more because of a series of weather events such as tornados in Tuscaloosa and Joplin, flooding in Thailand, the earthquake in Japan and Colorado wildfires. These property-driven stresses on the market have hurt insurers and pricing is starting to firm.

In the past, the insurance market turned on a dime from soft to hard — all rates across the board. In this market, you’re seeing some price increases, but not for all insurance types. Property and workers’ compensation premiums have gone up, while liability and vehicle rates have stayed pretty even. This is not a classic market turn yet, but brokers keep hearing the word ‘yet.’ Insurance companies’ base portfolios are not making a whole lot, so they will eventually have to make up the difference with larger premium increases or covering less risk. However, this year — so far — has been a fairly friendly weather catastrophe year, keeping the turn slow.

For the insured that have high loss ratios, insurance companies are hitting those businesses hard with premium increases or non-renewing their policies. In these cases, it could be hard to find replacement insurance. However, the best of the best are still being treated well — the businesses that have low loss ratios.

Have some industries been hit harder because of the unevenness of the market turn?

Yes. If, for example, you’re a property manager who manages apartment buildings or commercial office buildings, you’re probably going to be hit harder. Other industries that rely more on liability and vehicle insurance may not see as much change. Regardless of the industry, make sure your loss control program is up to date and follow any risk management recommendations from your insurance company or broker. You also may need to increase deductibles or further spread your risk.

How can you combat the harder market?

Business owners need to do what’s necessary to become the best of the best. Put policies and procedures in place to mitigate your risk and decrease losses. For example, employers can utilize systems like Fleet Watch, which monitors drivers and vehicle usage by keeping track of factors like driver’s speed to give business owners real fleet data. Employers can drill down, find risks and eliminate them to keep rates down.

Employers should use data provided by their broker to reach the right decisions, such as asking whether raising deductibles or stop loss limits will be economically smart strategy or just make your underwriter feel better.

A good broker will help analyze everything from your current vendor/client contracts to previous losses. You might see risks that you didn’t know about. For instance, there could be a better way to create a contract so you push the risk out to a subcontractor.

Communicate with your broker on a regular basis. Brokers typically have a stewardship meeting well before the renewal to go over each of your policies and formulate a strategy for the renewal. If your renewal includes diminished coverage or added exclusions, then it may simply be a matter of pushback. You and your broker might tell your insurance company that if this is to be done, then something will be needed in return, while being prepared to look elsewhere. A proactive broker will handle these negotiations for you.

What about using self-insurance in this type of market?

You’ve got to analyze the situation thoroughly. There’s always going to be self-retention that makes sense, but it’s important to figure out where. For any self-insured program it’s a matter of rolling the dice, and your company has to have information to put the odds in your favor.

Combatting this market cycle is about consistent loss control and having a strong business model. Too many businesses fly by the seat their pants when it comes to preventing losses. A little dose of long-term thinking combined with a professional insurance broker goes a long way in helping you navigate through the hard and soft market cycles.

Craig Hassinger is president of SeibertKeck. Reach him at (330) 865-6237 or chassinger@seibertkeck.com.

Insights Business Insurance is brought to you by SeibertKeck Insurance Agency

Published in Akron/Canton
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