New claims for unemployment benefits fall 9,000 in latest week

WASHINGTON ― New U.S. claims for unemployment benefits fell below 400,000 last week for the first time in five weeks and a trend reading also edged lower, suggesting a modest improvement in the still-moribund labor market.

Initial claims for state unemployment benefits dropped by 9,000 in the week ending October 29 to a seasonally adjusted 397,000, the Labor Department said on Thursday. The government raised slightly its estimate for claims filed during the prior week to 406,000.

Economists polled by Reuters had forecast claims edging down to 400,000 from the previously reported 402,000.

The level of weekly claims remains well above pre-recession levels and has dipped below 400,000 only on brief occasions this year, suggesting no fast turnaround is imminent for the jobs market.

A Labor Department official said the government had to estimate claims for two states — Connecticut and Oklahoma — but believed the estimates did not affect the overall report.

The four-week moving average of claims, considered a better measure of labor market trends, fell 2,000 to 404,500.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 15,000 to 3.683 million in the week ended Oct. 22.

Economists had forecast so-called continuing claims at 3.69 million.

A total of 6.782 million people were claiming unemployment benefits in the week ended Oct. 15, up from 6.679 million during the prior week.

How to avoid a liability insurance nightmare with the right coverage

Edward Galloway, Shareholder, Jackson DeMarco Tidus Peckenpaugh

Joel Covelman, Senior Counsel, Jackson DeMarco Tidus Peckenpaugh

A lawsuit has just been filed against your company and several of the company’s executives. Your first thought: “We have general liability insurance, and paid a lot of money for it. The insurance company will pay the lawyers to defend us and pay any settlement or judgment that might be entered. No need to worry.”

But then the insurer tells you that your general liability insurance policy only covers claims for bodily injury, property damage and something called “advertising injury.” None of the claims in your lawsuit fall into those categories. You are on your own. Now, your company has to pay for the defense and any settlement or judgment. Suddenly, the lawsuit that you thought was “no problem” because you have general liability insurance is now a financial nightmare for your company.

How can a company avoid this scenario?

Smart Business learned more from Edward Galloway, shareholder, and Joel Covelman, senior counsel, at Jackson DeMarco Tidus Peckenpaugh, who specialize in advising companies regarding insurance issues.

Why would a business need anything other than general liability insurance?

The scenario described above is a painful reality for some businesses because they wrongly assume that their general liability insurance covers far more than it does. In our experience, these situations can quickly get even more complicated, causing the potential litigation costs to spiral out of control.

To illustrate this point, consider these possibilities: Imagine if one of the executives in your company who was sued has been advised that he should have a different lawyer, separate from the others, because he believes that others are at fault, not him. He asserts that under the terms of his employment contract the company has to pay for his separate legal counsel. Your company is now faced with paying two law firms to defend the case. Both sets of lawyers send you a litigation budget well into the six-figure range. They also tell you that they need expert witnesses to testify at trial, and the experts’ hourly rates are almost as high as those the lawyers charge. Early in the lawsuit, the plaintiffs make settlement demands also in the six-figure range, but instead of the money coming from your general liability insurer, you would have to pay it out of existing assets or revenues.

If you do not settle quickly, the defense costs are not the only ‘costs’ you will have to worry about. The time that your employees and you spend dealing with the lawsuit, such as preparing for and attending depositions, answering interrogatories, and searching for documents that are requested by the other side, is an additional cost to your company that is hard to quantify, but can have a very real impact on your bottom line.

How does a company know if its liability insurer is justified in denying a claim?

Just because your general liability insurer’s adjuster tells you that its liability policy does not cover your claim does not mean that is, in fact, correct. When a potentially big and expensive claim is on the line, it is worthwhile to seek the advice of a knowledgeable insurance lawyer to be certain you are presenting all the necessary information that will maximize the odds of triggering coverage under the policy, and to be sure the insurer is not wrongfully denying your claim under the law governing insurance coverage.

How can a company avoid having no insurance to pay defense costs or any possible judgment?

While there is not insurance for every conceivable kind of claim, every year, businesses of all sizes should conduct a thorough review of the internal and external risks they face. Competent insurance brokers and lawyers knowledgeable about insurance coverage and litigation can give advice about the types of insurance available, what risks they cover, and the cost of such insurance.

When shopping for insurance you should know that not all policies are the same. Although there is a great deal of standardization in insurance contracts, some insurers modify the industry standard coverage forms or exclusions. You should ask your insurance broker to obtain ‘specimens’ of the actual policies of insurance you are considering buying, so that your insurance coverage lawyer can evaluate whether there are meaningful differences in coverage, and so you can minimize gaps in coverage that are sometimes buried in the details of the policies being offered.

With a coverage analysis of the specimen policies, your company can then perform a cost-benefit analysis by weighing your business risks against the cost of insuring against them. If there is no insurance coverage available for some of the identified risks, or the cost of the coverage offered is too high, then the company at least knows what uninsured risks it is facing, and can contemplate steps to minimize those risks or create reserves to deal with them.

What are some of the other kinds of coverage available besides general liability insurance?

The typical general liability insurance policy issued to a business does not cover claims for breach of contract, negligent misrepresentation, fraud, sexual harassment of a company employee, wrongful termination of an employee, pollution liability, breach of fiduciary duty by a company officer or director, professional malpractice, employee theft, or workplace injuries to employees. Depending upon the insurer and the endorsements you select, your liability insurance policy may or may not cover auto accidents in company vehicles or in the private vehicles of your employees who are on company business, and it may or may not cover defamation of individuals, or disparagement of businesses or products.

Specialized types of liability insurance may be available to provide at least some degree of coverage for these types of claims, such as employment practices liability, pollution liability, directors and officers liability, and errors and omissions liability, among others.

To understand whether your business needs any of these or other coverages, an annual risk and insurance coverage audit is the starting point, along with a discussion with your insurance broker and insurance lawyer.

Edward Galloway is a shareholder and Joel Covelman is senior counsel at Jackson DeMarco Tidus Peckenpaugh. Reach them at [email protected] and [email protected], respectively.

Jobless claims fall but not enough to dispel worries about economy

WASHINGTON ― Americans filed fewer new claims for jobless benefits last week, but the decline was not enough to dispel worries the economy was dangerously close to falling into a new recession.

Applications for unemployment benefits dropped to 423,000 in the week ending September17 from an upwardly revised 432,000 the prior week, the Labor Department said on Thursday.

Analysts polled by Reuters had expected claims to fall last week to 420,000.

With fears mounting in the country that a new recession is at the door, the Federal Reserve on Wednesday warned of “significant” risks to the economy as it launched a new plan to boost growth through cheaper borrowing costs.

“(The data) suggests that job growth this month is probably not going to be stellar,” said Rudy Narvas, and economist at Societe Generale in New York.

“It gives more backing to the Fed’s decision yesterday to provide more stimulation. The economy is chugging along near stall speed.”

Recession fears are growing around the world. Data in Europe and China on Thursday showed private sector business activity declined sharply this month as the euro zone debt crisis and a stalling U.S. recovery hit confidence.

The Fed’s warning and the weak data in Europe and China hammered global stock prices. U.S. stock futures tumbled early Thursday on worriers about the global economy.

The four-week moving average of claims, which smoothes out volatility, rose to 421,000 from 420,500 the prior week.

Excluding one week in early August, claims have held above 400,000 since early April. A Labor Department official said there was no discernible effect from Hurricane Irene or other recent storms in the national reading.

Continuing claims eased to 3.727 million in the week ending September 10 from 3.755 million the previous week. The data showed that in the week ending September 3, the number of total recipients on benefit rolls was 6.889 million.