Why key life insurance should be part of your business continuation plans

Small and midsized business owners are so busy waging the daily battle of business that they often don’t think long term enough. They don’t strategize for various eventualities like losing a key employee.

“Our job as a risk manager is to think about those types of strategies for you,” says Marc McTeague, executive vice president at SeibertKeck Insurance Agency. “I know what it’s like to own a business, and you’re just so busy running it that sometimes you don’t do proper planning. Or, you think, ‘Hey, it will never happen to us.’ But it does.”

Smart Business spoke with McTeague about the benefits of key life insurance.

What is key life insurance?

Key life or key man life is when a business owner takes out a life insurance policy on its key employees, with their permission. Then, if that crucial member of the team dies suddenly and the business suffers an economic loss from not having that institutional knowledge around, the key life bridges the gap. It allows you to find a new person, pay for his or her training, pay for any lost sales opportunities, etc.

The key employee could be a COO or controller who has control of all the banking relationships and finances, a superstar salesperson who is extremely well connected or a plant manager who has a significant role in your manufacturing processes and efficiency.

The great thing about key life insurance is that your agent can be creative with how the policy is written, whether it’s universal life, whole life, term life, blended products, etc. Also, you can do a split beneficiary with the person’s spouse or heirs. So, if you buy a $ 1 million policy — $500,000 goes to the company and $500,000 goes to another beneficiary.

As long as the business doesn’t write off the annual premiums it pays on the policy, then the death benefit is tax-free.

How does this relate to buy-sell agreements?

Buy-sell is when multiple partners or business owners buy life insurance on each other. That way if one dies, the remaining have funds to buy out the shares of stock.

They realize it’s the smartest way to avoid being in business with a spouse or heir they don’t really want to be in business with. Other than the personal traumatic loss of the human being, you don’t want to compound that and destroy the business or destroy relationships because of the inability to fund a buy-out.

However, you also can add key life to the buy-sell, which helps cover the economic loss with your partner gone.

Again, it’s important to have an agent who can help figure out the best way to structure these programs. It comes back to what you’re trying to accomplish. Are you trying to simply purchase the stock through life insurance? Or, are you trying to also fund for the economic loss that you’re going to have with that person not working at the company anymore?

Who should get this type of coverage?

A giant corporation or very large business is more likely to weather the storm of a loss of a key employee, than a smaller privately held organization that doesn’t have the wherewithal to have redundancy in its employee base. They are the ones that are truly at risk. A 500-employee organization is probably going to get along a lot better than somebody who has 50, but the large business is more likely to have this coverage.

Also, companies are more likely to get buy-sell coverage, than key life — even though key employees can have the same impact, or even greater, on the success of an organization than an owner.

People tend to focus on partners and owners, but if they really look at the profile of their employees they’ll see who could be replaced by simply hiring a recruiting firm and taking the time to hire the right candidate, versus those whose shoes they would really struggle to fill.

Actuary tables have become more accurate, life insurance premiums have gone down and life insurance products are more varied and easier to design, so you need to ask your agent about this coverage today.

Insights Business Insurance is brought to you by SeibertKeck

What you need to know to protect your company against regulatory violations

Regulatory risk encompasses a wide range of issues that can create problems for a business, says Chad Follmer, Healthcare Practice Leader at Woodruff-Sawyer & Co. In some cases, regulations are violated maliciously while in other instances, it’s an innocent mistake that gets flagged such as the wrong coding for a health condition.

“Even if you believe you’ve done everything right and been as proactive about regulatory risk as you can be, the odds are pretty good that at some point as a corporate executive, you could face allegations of a regulatory violation,” Follmer says. “In some industries, unfortunately, it’s really not if, it’s when.”

Health care is a particularly tricky realm to navigate. In 2014, the Department of Justice secured $6 billion in settlements and judgments in civil fraud cases with an estimated $3 billion of this sum representing recoveries from health care providers.

“The government’s return on investment is between $8 and $12 for every dollar spent on regulatory enforcement,” Follmer says. “From a political standpoint, people like the idea that their watchdogs are doing their job to recover this money.”

Smart Business spoke with Follmer about how to work with your insurance partners to craft coverage that minimizes your regulatory risk.

What is driving the increased attention on regulatory risk?

Health care qui tam, billing and Stark violations continue to be a focal point, but you also have cyber-related regulatory claims; wage and hour claims; potential violations of the Foreign Corrupt Practices Act; and for publicly owned companies, investigations by the Securities and Exchange Commission (SEC). The risks continue to grow and carriers are adapting their coverage to deal with the new threats.

How prepared are companies to respond to regulatory claims?

You may not be as prepared as you think. A growing number of insurance carriers are carving regulatory risks out of policies and offering clients the opportunity to buy it back via expensive standalone placements. Some carriers don’t see it as that big of an issue, but it’s creating divergence around regulatory risk and the coverage carriers are willing to offer.

Employment practices coverage started out this way as well. It used to be part of either your general liability or your director and officer (D&O) liability insurance. It would protect your business on issues such as discrimination in the workplace. Cyber liability is another area that was historically covered with general liability policies, but has now become an increasingly standard separate coverage.

In some cases, limited coverage can be bought as a policy enhancement on an existing professional liability form.

Review your policy and scour any recent coverage changes that have taken place to make sure you haven’t had any limiting coverages introduced. Talk to your broker or to an expert in regulatory risk about what coverage options might be available to solidify your protection.

In what other ways are insurance carriers changing how they work with clients?

With regulatory risk going up, the insurance industry is taking a more aggressive approach to underwriting risk and giving clients incentive to reduce the odds of a problem occurring. Let’s say you have a $10 million D&O limit. If you have a $100,000 deductible, your carrier might say for a regulatory risk, the deductible is going to change from $100,000 to $1 million.

Now you have more skin in the game to ensure you’re doing everything you can to account for that regulatory risk. Coinsurance is another tactic used by some carriers. You may have a policy for $10 million in coverage, for example, with a provision that you pay 20 percent of every claim all the way up to $10 million.

So if you have a total loss, the carrier will pay out $8 million and you’ll pay $2 million. These are additional reasons why you need to dig deeper into your policy to be clear on what’s covered, what’s not and how much it will cost. Consider bringing in an outside consultant or broker to do an independent evaluation of your policy.

In many cases, the risks your company face today don’t look anything like they used to. Ensure your company is as prepared as it can be.

Insights Business Insurance is brought to you by Woodruff-Sawyer & Co.

Extending privacy and security coverage to portable devices

Who would have thought anybody would take the time to hack  dating site Ashley Madison? But hackers, who have too much time on their hands, can make anyone a target — and release a firestorm in the process.

“If your organization stores personally identifying information, you can’t ignore this exposure,” says Karl Henley, vice president at SeibertKeck Insurance Agency.

Even if you don’t keep customer information or fall under the Health Insurance Portability and Accountability Act, you still have electronic employee files.

“The big one people overlook is their own employees because they always have their personal information,” Henley says. “You have their Social Security number and their bank account numbers for direct deposit.”

In addition, Internet privacy and security coverage, which is becoming broader, goes beyond protecting yourself from someone hacking your website. If companies make the right moves upfront, they can cover lost or stolen portable devices — and protect information from falling into the wrong hands.

Smart Business spoke with Henley about your privacy and security exposures and how to eliminate or minimize them.

What do employers need to know about Internet privacy and security risk?

This needs to be a discussion, in order to determine what your exposures are. Everyone can be a target, including manufacturers who send and receive plans and specs that are protected as proprietary.

Once you understand your exposure, you need to figure out if you can eliminate it. If not, then can it be transferred to another party, such as a payroll company? If you’re transferring the risk, don’t forget that the third-party needs to indemnify you in the agreement for a breach that is caused by them.

If you can’t make a third party responsible, then you need to insure for it. But take time to understand what you’re actually buying, beyond the words ‘cyber’ or ‘Internet.’ There is no standard policy in this space right now. For example, Internet liability coverage is personal advertising injury insurance for electronic media, which just protects against infringement and unauthorized use of advertising material, copyright, slogan, trademark, etc., through the Internet. It has nothing to do with protecting against breaches.

How can companies make sure that their portable devices are covered?

It’s becoming more common for hackers to gain access to your information through portable devices, such as laptops, tablets, removable storage and smartphones. This is partly because more organizations are using cloud-based computing where portable devices have greater access to protected information. At the same time, your employees may be saving their passwords on the device or even using an app that creates a list of passwords.

You can buy an Internet privacy and security policy that includes as a covered cause of loss a lost or stolen laptop or portable device, either as part of the standard policy or as an endorsement. But in order for those devices to fit into the definition of a covered cause of loss, the device has to be password protected and the regulated data has to be encrypted.

A good insurance agent will help you become compliant when you buy the insurance policy. Your internal portable device policy needs to set standards for storing and changing passwords. Your encryption service or platform needs to meet the insurance company’s requirements, and every carrier is different. For instance, standard Apple encryption might qualify but you could need an internal policy that states all mobile devices are Apple and required to be passcode or fingerprint protected.

Make sure you ask your insurance agent if he or she has sample policies with best practices, in order to streamline adopting a compliant internal policy.

Typically when you have a breach, it’s because somebody wasn’t following the rules. But if you don’t set the rules upfront and provide ongoing training and awareness, your claim may be denied — even if you’ve already taken the proactive step of insuring for the risk.

Insights Business Insurance is brought to you by SeibertKeck

Environmental insurance reduces risk when investing in distressed property

A strong real estate market in Northern California has led property owners, businesses and developers to look more closely than ever at environmentally contaminated properties.

“In areas like Silicon Valley, these parcels contain large amounts of acreage with potentially beneficial uses such as new corporate offices/campuses and multi-use residential/commercial developments near transportation,” says Jeremy S. Roberts, Vice President for the Environmental Liability Practice at Woodruff-Sawyer & Co. “But they are within the footprint of large regional contaminated groundwater plumes.”

In some cases, these properties have already been developed to house modern office buildings, but are still in need of long-term remediation/mitigation measures due to residual contamination, Roberts says.

The effort to remediate a distressed property often scares potential investors away.

While there is certainly risk involved, many companies look toward environmental insurance products like Pollution Legal Liability (PLL) to alleviate concern and transfer risks associated with causing or discovering unknown pollution conditions.

Smart Business spoke with Roberts about how a PLL can become a future asset during a subsequent sale of the property.

How does the PLL become a future asset?

These PLL products are often purchased on properties with known contamination where the insured is not the responsible party for the known contamination.

Policies can be used as a risk transfer tool to cover liability claims that could arise from third-party tenants or inhabitants at the site, or for cleanup costs required after the property has been developed and a ‘no further action’ status has been designated.

This becomes valuable should regulatory guidelines change in the future. A properly structured PLL policy can also help you manage the future sale of the property.

You should include proper assignment terms to add a future buyer to the policy or to add future lenders to the policy and protect them in the event any claims arise out of that past contamination.

In many cases, the PLL that is being passed on to a future buyer helps facilitate the transaction and mitigate the business negotiations around the potential diminished property value.

What is the key to negotiating an effective PLL policy?
It’s critical that you look at this product as an option while still in your due diligence period.

The key is not just to focus on transferring as much of the risk as you can that could arise during property development, such as the discovery of unknown contamination and the resulting added cost, but to also look longer term.

These products can provide policy terms for up to 10 years, which gets you past your current risk and allows you to help transfer the policy to a future buyer.

You need to take the time to structure the policy the right way upfront so you have the flexibility to make that future transition and transfer the benefits of the policy toward the future buyer.

Focus on things like correct assignment provisions, insured contracts and indemnity obligations, future named insured provisions, lender additional insured status and waivers of subrogation.

What about environmental indemnities and regulatory comfort letters?

In many cases, a purchaser of a contaminated site may inherit an environmental indemnity being passed down from a prior property owner and/or responsible party.

Other times, the prospective purchaser may negotiate a ‘comfort letter’ from the lead regulatory agency confirming that by practice, the regulatory agency generally does not go after innocent purchasers of contaminated sites for future clean-up obligations.

However, given the litigious environment we live in, it is still worth considering additional risk transfer tools like PLL policies that can protect you as well as future lenders or buyers.

In such approaches where an environmental indemnity or regulatory comfort letter exists to the benefit of the insured, the typical exclusions under a PLL policy for known pollution conditions can be replaced with broader coverage triggers in the event the new buyers get brought into future liability claims for clean up, bodily injury or property damage. ●

Insights Business Insurance is brought to you by Woodruff-Sawyer & Co.

What you need to know to protect your company and its valuable data

An unfortunate fact of life in today’s digital world is that no one, be it an individual consumer of technology or a Fortune 100 business leader, can count on complete protection against becoming the next victim of cybercrime.

“These attacks are not going away. In fact, we are facing an increase in frequency,” says Jared Pelissier, Senior Vice President and Partner at Woodruff-Sawyer & Co.

“While everyone is improving their corporate cybersecurity systems with varying technologies, which will play an important part in proactively defending against breaches and attacks, the basic nature of the matter is that it is nearly impossible to detect or block every threat. You need to be prudent in assessing potential damages and liabilities that a breach could impose on your company. This will help ensure you have adequate insurance coverage in place to best protect your balance sheet.”

Smart Business spoke with Pelissier about how to work with a broker to identify exposures and obtain optimum coverage that protects your business.

Where is a good place to begin to protect your business against cybercrime?

It is all about your company’s risk profile. The best approach is to implement a holistic process.

You need to do more than simply get an insurance policy to protect your business. Partner with an insurance brokerage that has aligned itself with top-notch cyber defense firms to expertly assist with the assortment of cybersecurity services. These cybersecurity firms know exactly what to look for and can assess if a breach has occurred.

One crucial step is performing an assessment to determine if your system has already been compromised. On average, it takes 240 days before a company realizes its system has been breached. Often times the malware is collecting private information undetected and it generally takes five or six months before the IT team realizes the system has been compromised.

You can obtain a full report on where, when and how the compromise happened, as well as how to remedy the situation.

The other piece is penetration testing. As you determine if your systems have already been compromised, you should also gauge how easy or difficult it would be to gain access to your secure data.

Alongside those two tests, create an emergency incident response inclusive of forensic investigation capabilities. You will need a firm that is going to stop an active security incident, evaluate the extent of the attack and then look to remediate the situation and prevent subsequent incidents.

The goal for any risk management team is to create a situation where the company is less likely to have a breach or claim, but should one occur, ensure the company is more defensible in terms of liabilities.

Work with your broker to develop a meaningful process that provides proactive protection against these vulnerabilities. Use the assessment data and improved risk profile to craft custom language into your cyber liability insurance. You have to know who to go to and what to ask for to design the best cyber liability insurance program.

What if your company has already been a victim?

It’s very unsettling to operate under the belief that your company’s data is secure, only to learn that your network was breached six months earlier.

This can be particularly hard on the team you rely on to manage and protect your technology infrastructure.

Unfortunately, you’re not the first and won’t be the last company to feel this vulnerability. In the event of an incident, you need to focus on your data breach response plan and do what is necessary to safeguard your company going forward.

Take an aggressive approach to protect your company and demonstrate to insurance carriers that cybercrime is a threat you take seriously. Educate your employees about their role in keeping your company’s valuable data and assets safe and secure.

Proactive work at all these levels helps reduce your risk of a claim, resulting in better insurance premiums that reflect your improved risk profile. ●

Insights Business Insurance is brought to you by Woodruff-Sawyer & Co.

Understand your legal liability of employee injury beyond workers’ comp

Employer’s liability protects employers from the legal liability arising out of an employee injury that is not covered by your workers’ compensation policy.

Smart Business spoke with Andrew Rowles, vice president at SeibertKeck Insurance Agency, about this coverage, laws and court decisions on Ohio employer’s liability.

How does Ohio employer’s liability help cover this exposure?

At one time, workers’ compensation was the sole remedy for an insured employee in Ohio, but over time the courts have eroded that.

Today, employees can sue for damages arising from employee injuries if the employer intended to cause injury or knew or should have known the injury was substantially certain to occur.

Employers also can be sued for:

  • Care and loss of services, such as the spouse of an injured employee suing for the loss of family income.
  • Consequential injury to a family member of the employee, such as the spouse of a severely injured employee suffering a heart attack or nervous breakdown upon learning of the injury.
  • Third party over action is where an employee is injured and that employee makes a claim against a third party, such as the manufacturer of the equipment that injured them. That third party then comes after the employer to recover funds for the employees’ claim.
  • Dual capacity claims. If an employer is the manufacturer of the product that caused the employee’s injury, it can be liable not only as an employer but also as a manufacturer.

These exposures aren’t covered by Ohio workers’ compensation and are excluded by the standard commercial general liability policy, leaving the insured with a ‘gap’ in coverage.

It’s important to realize, though, that employer’s liability stop-gap provides some coverage, but only where permitted by law.

How have recent laws and court cases changed this coverage and added protection for employers?

In 2005, the Ohio legislature passed a law that requires employees to prove the employer acted with deliberate intent to cause injury to the employee.

In 2010, the Ohio Supreme Court upheld the law and confirmed its constitutionality. This case is a rare instance where employers have gotten more protection, not the employee.

In March of this year, the 2010 ruling was upheld in Hoyle v. DJT Enterprises. The case affirmed that plaintiffs must prove that the employer acted with deliberate intent to cause injury, disease or death, for a civil action based on an employment intentional tort.

While the Hoyle decision maintains the existing conditions for Ohio business owners and keeps Ohio in line with the majority of jurisdictions that recognize workers’ compensation as the remedy for employer injuries, there are some points to consider:

  • Most liability policies exclude deliberate intent, so there is no indemnity coverage for employment intentional tort claims.
  • As a practical matter, employees will be limited to workers’ compensation remedies for their workplace injuries.
  • Even with this decision, employers still face potential litigation by injured employees. Keep in mind that employer liability coverage forms typically provide only defense expense coverage for allegations of intentional injury.

An enhancement endorsement could provide indemnity coverage for dual capacity claims and for unforeseen claims that fall within coverage definitions.

Considering the ruling, it might be a good time to sit down with your agent to make sure you understand your employer’s liability coverage and have adequately taken all of the risks into account.

Insights Business Insurance is brought to you by SeibertKeck

Directors and officers need your backing to make the tough decisions

Corporate directors and officers are required to make decisions every day that help shape the future of the companies they lead.

When circumstances force these leaders to make choices that are painful, the emotions of the people affected can run high, says Priya Cherian Huskins, a Partner and Senior Vice President at Woodruff-Sawyer & Co.

“Decisions get made that people don’t like and in this country, we allow free access to the courts,” Huskins says. “This exposes diligent, honest and hard-working officers and directors to the threat of being sued merely because somebody disagrees with their decisions.”

Directors and officers of both public and private companies potentially face unlimited liability for the actions they take within the scope of their duties as leaders.

Smart Business spoke with Huskins about what private companies can do to provide directors and officers with the confidence they need to effectively do their jobs.

Where do private companies begin in protecting their directors and officers?
The three pillars of protection are corporate governance, indemnification and director and officer (D&O) liability insurance.

Corporate governance refers to the controls and procedures that exist in the management environment to help run a company well. You need a clear set of rules and training protocols so that everyone understands the rules and agrees to adhere to them.

Rules such as anti-corruption policies govern behavior and provide confidence for those who follow the rules that they will be protected. Structure also helps shape the actions that are taken to resolve problems when they occur, in addition to making it easier to stay connected with what’s happening in your organization.

Indemnification agreements are an important protection for directors and officers accused of wrongdoing. When tough calls need to be made that involve layoffs, closing offices or other actions that negatively impact others, your leaders need to be confident that the company will back them up, even if the case goes to court.

The last pillar is insurance. If the company is insolvent, the indemnification agreement won’t help because there is no money. There are other instances in which a company cannot indemnify as well. D&O insurance can respond on behalf of directors and officers in many of these situations.

It can also reimburse the company for its indemnification obligations, serving as balance sheet protection for the company.

Why do some companies forego personal indemnification agreements?
People often think indemnification agreements are more appropriate for public companies. But private company directors and officers benefit from these agreements as well. Consider the case of a private company that is acquired by another company.

Your directors and officers will want an indemnification agreement that will force the acquiring company to defend them if a suit arises after the close of a sale.

What is the biggest mistake companies make in D&O protection?
D&O insurance can and should be heavily negotiated by an independent broker, but companies often treat it like a commodity.

It is true that a very small percentage of all private companies in a given year will see a suit against one of their directors or officers. When a suit does occur, however, it can easily become a multimillion-dollar problem, potentially bankrupting the individual being sued.

If you’re taking on significant debt or have plans to expand your business in the near future, you would be well-served to have a broker who specializes in D&O insurance to craft your policy.

How do you determine the right amount of coverage?
First, talk to an expert so you can calibrate the right amount of coverage for your company. Does your policy provide the broadest amount of coverage possible? Ask questions that are less about the policy and more about exposure.

Ask for instances in which your policy will not respond. You need to know if one bad act by a director or an officer could jeopardize coverage for the whole company. You want a broker who understands your exposures, can address your concerns and can help you negotiate endorsements to improve your coverage. ●

Insights Business Insurance is brought to you by Woodruff-Sawyer & Co.

How the wealthy can prevent coverage gaps in their personal insurance

Not all high net worth individuals started out that way; they’ve spent years building a business and career, slowly accumulating assets and wealth. Even though they have more items to insure and face different risks, they often don’t adjust their personal insurance to reflect their changing needs.

“They are so busy building a business, they often don’t take the time to adjust their coverage as their needs and circumstances have changed,” says Christine Hopkins, a client advisor at SeibertKeck Insurance Agency.

Most of these people would never go without necessary coverages on their business, but there can be major inadequacies with their personal insurance, she says.

Smart Business spoke with Hopkins about where high net worth individuals need more or different types of insurance coverage.

What is the biggest area that high net worth individuals underinsure?

The biggest concern is liability. While it is upsetting to lose an expensive piece of jewelry, it generally will not ruin someone financially; a liability claim, however, can. With inadequate liability and/or umbrella coverage, one incident can affect the total wealth and earnings of an individual and their family.

If the individual sits on non-profit boards, or is involved with charity work, he or she needs to consider increasing his or her limits and supplementing coverage with an umbrella policy. If a non-profit is sued, it is common to name all the individual board members in the suit as well. Without the proper coverage, you could be footing the defense or judgment bill yourself.

For example: A high net worth individual sat on a youth athletic league’s board of directors, and a former coach sued all board members for improper dismissal.

Thankfully he had a personal umbrella policy that covered him for liability resulting from unpaid or voluntary positions and paid for his entire defense.
Auto accidents are a common source of claims and can result in financial pain if you and your estate are not adequately covered. For example: An individual has a $1 million umbrella policy over a $250,000 per person liability limit with his automobile policy. Unfortunately, he or she had an accident in which a child was severely injured. The child’s care will more than likely exceed $5 million within 15 years; his or her estate, business, and earnings will all be at risk to cover this situation.

What problems do you see with homeowner’s policies?

Homeowners policies come with limitations on certain items like fur, jewelry, fine arts and firearms. These provided limits are not usually adequate for high net worth individuals. As individuals gather wealth, they tend to gather expensive items that with a standard policy have a very limited amount of coverage. It is important to review these items with your insurance agent to be sure the items are properly and fully covered. Collectibles and rare or unique items often require a separate policy, known as an Inland Marine Policy.

Making sure the values on your homeowner’s policy are correct, and ensuring you use insurance products that are designed for higher risk, will be extremely important in the event of a claim.

How should household help be covered?

If household help, such as a gardener, nanny, cleaner etc., doesn’t come from an established company, you need to pay workers’ compensation. This will protect you in case they are injured in your home. If the employee comes through a service company, ask for proof of coverage with a workers’ compensation certificate. It is also important to inquire with the company about background checks for anyone coming to work in your home to make sure there’s compatibility, experience and no other issues. Your insurance agent can assist you with determining if the company’s coverage will extend to the employee, or if you need to purchase your own policy for them.

A good agent will do a risk management audit, asking what you’ve got to protect and walking you through the different items you have to ensure there’s adequate coverage. By spending time with a qualified high net worth agent, you’ll know your assets and income are properly insured.

Insights Business Insurance is brought to you by SeibertKeck

Knowledge is an important tool when employees make health care decisions

Employers can play an important role in strengthening the way employees and health care providers interact and make health care decisions.

A more informed partnership can lead to better outcomes, higher satisfaction, lower health care costs and improved productivity, says Anne Presson, Director of Benefits Innovation at Woodruff-Sawyer & Co.

“If your employees have a better understanding of how to have a productive conversation with their physician, and they have the tools to make better use of their time together, instead of three visits to reach a conclusion, it could be one visit,” Presson says. “If each visit is a half day of work missed, that can make a big difference.”

Boosting engagement between patients and physicians is an opportunity for employers to have a meaningful impact on the patient experience and ultimately cost. Making sure your employees are health-literate and empowered to make good health decisions is key. It provides an opportunity to demonstrate that you care about the health of your employees and their families.

Smart Business spoke with Presson about what employers can do to create more understanding between employees and health care providers.

How can a company empower employees to become equal partners in making health care decisions?

Let’s say you’ve had a cardiac event and are referred to a specialist. You can do research on your condition on the Internet, but it’s not always evidence-based or from a reputable source and is sometimes left to interpretation. You go to the appointment nervous and without a clear awareness of what you’re facing.

The doctor comes in and tries to explain what’s going on, but he or she is starting from scratch.

You walk out not really remembering what was said. The result is a series of follow-up phone calls that might result in the need for another appointment just to get a clear understanding of the options available, to say nothing of selecting a treatment option.

How can the relationship be strengthened with decision-support tools?

Programs are available to help employees be more educated about their particular situation before they meet with their physician.

The Choosing Wisely campaign from the American Board of Internal Medicine and Doctella by Patient Doctor Technologies Inc. pose frequently asked questions about common conditions such as lower-back pain, headaches and heart disease.

They don’t replace the doctor’s visit, but allow you to do your homework before your appointment so you can have a more informed conversation with your physician. These and other decision aids have been developed by medical societies which lends credibility for both the patient and provider.

They address key questions such as what are the implications of the available treatment options? Do you really need this test? What happens if you wait?

The more prepared you are with evidence-based guidelines and key questions prior to your appointment, the more comfortable you’ll be with your decision. Armed with knowledge, you are able to work in partnership with your doctor to select the treatment and recovery plan that best fits your individual needs.

Where does a company begin in providing these tools to employees?

Providers often speak of wanting to have a closer relationship with employers to understand what’s going on with the populations they serve. Regardless of size, we encourage employers to take advantage of the opportunity to build a partnership with key providers. Incorporating decision-support tools into the mix is not only valued by employees, but providers see the benefit of having educated patients and will work with you to support these efforts.

How do you encourage employees to use the decision-support tools?

At the end of the day, of course, it’s every employer’s struggle to maintain awareness and get the tools to people at the right time.

Since employees are more likely to make changes when directed by their physician, it makes sense to take advantage of this powerful avenue. By working together with providers, you will be able to empower your employees to make well-informed decisions about their health and maintain a healthy and productive workforce. ●

Insights Business Insurance is brought to you by Woodruff-Sawyer & Co.

How to determine if your exposures stretch beyond your current insurance

As executives and other successful business people climb the career ladder, they accumulate wealth. But many of them don’t consider how their exposures change from year-to-year.

They may turn to independent agents and brokers for help — but often only on the heels of an unpleasant situation, mishandled claim or the inability to secure coverage on an important asset.

You didn’t become successful in business by taking a reactive approach to risk. So, why wouldn’t you take the same stance in your personal life?

Smart Business spoke with Tim Able, director of sales & marketing at SeibertKeck Insurance Agency about how high net worth individuals need to proactively approach their property and casualty insurance.

How do you know if you’ve outgrown your current insurance?

As your earning power and assets increase, you may not be receiving proper guidance from professionals who are familiar with the market you are now in.

It’s not uncommon to believe an agent employed by one of the major, mass-market insurers is still your best source for advice or to mistakenly think that all insurance policies and companies are alike.

For example, you may believe that you already purchased the maximum available limits, but you can buy personal excess liability or umbrella policies with limits that go above $10 million from a select group of insurance carriers.

In addition, you now face some unique exposures that your agent or broker needs to be able to discuss, such as international property, private staff liability, board of directors involvement, special event coverage for large-scale home entertaining, exotic collections or parental liability and social media.

Is it common that high net worth individuals are underinsured in their liability limits?

Most wealthy U.S. consumers do not carry adequate coverage to protect their family and hard-earned assets, and discussing liability limits is one of the most vital topics in the insurance conversation.

You need to have a comprehensive risk profile that requires exploring you and your family’s lifestyle, purchase and investing habits, in addition to geographic presence and future aspirations.

How can a risk manager provide value-added service, versus a non-specialty insurance broker?

Your needs become increasingly complex as your personal wealth grows. So, you should take advantage of the value-add services and unique offerings that can improve your risk profile, such as:

  • Annual risk analysis.
  • Dedicated claims teams.
  • Preferred vendor access.
  • International capabilities.
  • Travel accident and medical evacuation coverage.
  • Digital home inventory.
  • Fine arts specialty coverage.
  • Notary services.
  • Personal security consultation.
  • Domestic employee exposure.

What do you tell people who hesitate to switch providers out of loyalty?

Fifty-nine percent of consumers would likely switch providers if their insurer was unable to offer solutions meeting all of their unique needs. The problem is you may not realize that your needs aren’t being met.

Personal insurance and financial protection for your family and your assets is critical. You deserve adequate coverage and above-and-beyond service, even if it means switching to another provider.

In our litigious society, jury verdicts and settlement amounts are higher than ever. Those with deep pockets can become targets for liability lawsuits. Adequate protection has to be a cornerstone of your insurance portfolio.

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