Florida Workers Comp Rates in 2020

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Third consecutive year of improving rates in Florida

Florida Workers Comp Rates in 2020 are going down by 7.5 percent, marking the third consecutive year of declining rates. Previous recommendations from the National Council on Compensation Insurance (NCCI) were for a decline of 5.4 percent. This decline marks the third consecutive year of continued declines for the marketplace in Florida. Over the past 5 years, the market for workers compensation insurance has been quite volatile for a number of reasons. According to officials with NCCI, the rate decreases are because of improvements in technology, creating safer workplaces, improving risk management, and a long-term shift from manufacturing to service sectors.

Sunset, Siesta Key, Florida, Beach

These better workers compensation rates go in to effect on January 1, 2020. Florida Workers Comp Rates in 2019 saw even more substantial declines of 13.9 %. 2018 saw a 9.6% decrease, and 2017 saw a 14.5% increase. There have been a number of things that have happened over the course of the past five years that have caused instability in the marketplace within Florida. Those things that have occurred include two 2016 Florida Supreme Court Decisions; Castellanos v. Next Door Company and Westphal v. City of St. Petersburg, Senate Bill 1402 in 2017, and the bankruptcy of Guarantee Insurance Company in 2018. Guarantee Insurance Company was the systems assigned risk provider. The bankruptcy left more than thousand businesses scrambling to find a new carrier.

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According to NCCI, claim frequency decline for workers’ compensation is not unique to Florida for numerous years frequency has been declining countrywide similar to Florida. A representative from NCCI testified that claim frequency decline is due, in part, to safer workplaces, enhanced efficiencies in the workplace, increased use of automation, and innovative technologies, and the that decline is expected to continue in the future.”

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Idaho Workers Compensation Rates to Decrease in 2020 by 6.2 Percent

Idaho Workers Compensation Rates again head in the right direction

The Idaho Department of Insurance as of October 2019, has approved a proposal for a 6.2 percent overall rate decrease to Idaho Workers’ Compensation Insurance. This decrease goes in to effect on Jan. 1, 2020.  Before this announcement, Idaho Workers Compensation was the 14th most expensive state in the country to purchase coverage. This means it is extremely important for business owners and managers to make sure they are taking advantage of every way to maximize savings.

Boise, Idaho, Panorama, Winter

Reaction to Idaho Workers Comp Rate Reduction

The Director of the Idaho Department of Insurance Dean Cameron said in a statement, “We are pleased to announce this reduction — a move which will benefit Idaho businesses, their employees and the economy in general. The decrease in the 2020 workers’ compensation rates reflects continued improvement in our state rating factors, including a slight decline in both the frequency of claims and the average cost of those claims.”

Idaho Country Road, Rocky Mountains

In the state of Idaho, the regulation of Idaho’s insurance business began in 1901. In 1961 the Department of Insurance was formally created. In Idaho, the state’s workers’ compensation benefit system is designed to cover medical costs associated with workplace injuries. The system also provides wage replacement benefits to injured workers for lost work time. Workers Compensation is frequently referred to as the “Exclusive Remedy”. This term is used because the system provides benefits to both workers and employers. With out this system, injured workers would have to go without pay when they are hurt and not able to work. Employers would be at risk of being sued for injuries that happen as a part of normal business operations.

 

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California Workers Comp Rates 2020

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California Workers Comp Rates 2020 are going to be declining for the fifth straight year. The average of the Jan. 1, 2020, advisory pure premium rates are $1.58 per $100 of payroll. If adopted, this would be the ninth consecutive pure premium rate decrease since 2015 totaling roughly 45 percent. This year the amount of decrease amounts to 5.7% average decrease compared to 2019 workers comp rates.

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What is contributing to the declines for California Workers Comp Rates 2020

California Workers Comp Rates 2020 are declining for a number of reasons. The strongest contributing factors include: continued downward development in losses, accelerated claim settlements, sharply declining pharmaceutical costs, and a decline in the number of liens being filed. Each of these factors lower the amount insurance carriers pay out in claims each year. Because of these positive developments, the insurance carriers are able to pass on some of these cost savings on to their customers in the form of lower rates for workers compensation.

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What is limiting the declines for Workers Compensation Rates?

Even though workers compensation rates have declined steadily for five years in the state of California, the business community within the state still pays more for premium then any other state in the country. There are still a few things contributing to keeping work comp rates high for the state of California. Factors contributing to continued high rates include cumulative increases in claim severities and continued high levels of allocated loss adjustment expenses from trauma claims. These issues are worth monitoring for the foreseeable future.

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What Can California Businesses do to limit Premium Rate?

Partner with an independent Agent

Partnering with an Independent Insurance Agent is the best way to make sure you are getting the best coverage at the most competitive rates. If you have time, you can shop around and get quotes from multiple carriers. If you do not have time, you can partner with an independent insurance agent and let them do the shopping for you. This is because an independent agent can shop your policy out to multiple carriers and make those carriers compete for your business. When you have multiple carriers competing for your business the independent agent can get your business better coverage at better rates.

Shop Around

In order to maximize savings, it is important to shop around your policy from time to time. Now it is not the best idea to switch carriers each year because of a small decrease in premium. Long term relationships do matter when your business experiences a loss. At the same time, it is your responsibility as a business owner to make sure your insurance carrier is competitive with the market.

Safety Programs

A Safety Program can help limit the cost of workers compensation insurance in California because it will limit both the frequency and severity of claims. When you business has less claims and the claims you do have are small, the insurance carrier is more likely to offer your business a favorable rate for premium.

Insurance for Amazon Delivery Service Partner Program

The Amazon Delivery Service Partner Program has very unique Insurance concerns

Insurance for Amazon Delivery Service Partners is crucial to the success of any business owner looking at breaking in to this niche industry. Most insurance carriers shy away from offering insurance coverage to any business that has a driving risk. Because of the strict guidelines required to be a part of the Amazon Delivery Program, a few insurance carriers are hungry to offer multiple lines of coverage to this new niche industry.

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What is included in the Amazon Delivers Service Program?

The Amazon Delivery Service Partner Program is a brand new program where Amazon is attempting to meet some of the demand for delivery of packages bought through the Amazon platform. The program has strict guidelines the businesses must follow in order to be a part of the program. The guidelines include training, technology, on demand technological support, driver assistance for on road issues, a dedicated account manager, and more than 20 years of logistical experience. In addition, Amazon also provides access to exclusive deals on Amazon Branded Vans that come with programs designed to help businesses with vehicle maintenance, Industrial-grade handheld devices, accounting services, and even legal support.

What Types of Insurance Do Amazon Delivery Service Partners Need?  

When a business is a Certified Amazon Delivery Service Partner, the business must adhere to the strict policies and procedures put in place by Amazon. Those policies and procedures include hiring, training, certifications, business structure, and required insurance. Because of these specific protocols, some insurers are more confident offering coverage to Amazon Partner Businesses. Amazon Delivery Service Partners Insurance is one of the most important decisions a new entrepreneur can make. Here are six insurance policies that all new business owners in this niche indsutry should consider adding to their package of insurance coverages.

  • General Liability
  • Workers Compensation
  • Commercial Auto
  • Inland Marine
  • Surety Bond
  • Umbrella Policy

General Liability

General Liability Insurance protects a business from a number of claims related to normal business operations. Some of the claims related to a commercial general liability insurance policy include: property damage, premises liability, products liability, completed operations, third-party bodily injuries, resulting medical payments, defense costs, and advertising injury.

Workers Compensation for an Amazon Delivery Business

When an Amazon Delivery Service Parnter hires the first employee, the business is legally required to carry Workers Compensation Insurance Coverage. This is true in 48 out of 50 states. Even if your business is not legally required to carry this coverage, it is in the best interst of the business to still secure this business. A Workers Compensation Policy covers all medical costs, recovery costs, and some missing income while an employee is hurt and not able to work.

Commercial Auto

An Amazon Delivery Service Partner Business reqquires teh business to use a vehicle or a fleet of vehicles every day to make delvieries of Amazon Packages. Most Insurance Carriers shy away from offering coverage to businesses that have any type of driving risk. Because of Amazons strict guidelines required of Amazon Delivery Service Partners, some carriers are more eager to offer coverage to these types of businesses. Business Auto Insurance is a policy that covers all types of claims that involve many types of automobiles related to a delviery business. These claims predominantly cover damages related from an auto accident you or your employee causes an automobile accident,

Inland Marine for an Amazon Delivery Service Partner

A Commercial Inland Marine Insurance Policy for an Amazon Delivery Service Partner protects goods that are frequently in transit or are stored at a third party location. Also, a Inland Marine Policy protects equipment and products even when they are not moving, but are moving throughout the shipping process, the delivery process, and beyond.

Surety Bond

A Surety Bond is designed to act as a guarantee of services. The Bond guarantees that you as a business owner will deliver the goods or services and will fulfill specific obligations the business has agreed to. Bonds are often written witha specific dolalr amount that is agreed to contractually between the business, the customer/partner, and the entity offering the bond (typically the insurance agency).

Umbrella Policy for an Amazon Delivery Service Business

A commercial umbrella policy helps a business fill the gap between what other policies cover and what you owe for losses or damages. If you experience a fire in your warehouse that destroys countless packages, your business property policy might not cover the entire cost of what you owe for replacing items. The umbrella policy then steps in to fill the gap.

Summer Heat Safety Tips

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How to Keep your Staff Safe during the Summer Heat

Each Summer as temperatures rise and heat indexes creep into triple digits, workplace injuries due to heat exposure rise with the temperatures. Not preparing your staff for these risks can cause unnecessary workers compensation claims to occur. When too many claims occur during one year or if one of the claims is severe, it can have a negative impact on the businesses loss cost ratio. The loss cost ratio is a large factor in what the experience modification rating of a business is. The experience modification rating of a business is the primary measurement an insurance carrier uses to determine if they are going to offer a business coverage. If the carrier does decide to offer coverage, the experience mod is the main factor used to decide what to charge for that coverage. Because of these factors, it is important for businesses to prepare for heat related illnesses among their staff.

Stay Safe in the Summer Heat

Most heat related stress for a business coincides with Hurricane Season in many parts of the country. These means the business should prepare for the elements well in advance of the Summer Heat. In addition, your business and your employees need to learn how to deal with heat related illness. Learning to deal with Summer Heat related illness is crucial to the success of a business. OSHA has released a campaign titled Water. Rest. Shade designed to protect workers from the ravages of heat. This campaign launched in 2011 and is meant to educate business leaders and workers about the dangers of working in the hot temperatures. OSHA has expanded this program over the years to include training sessions, outreach events, informational sessions, publications, social media messaging and media appearances. Regardless of whether a business subscribes to OSHA’s plan or another version of heat related weather planning, It is important to deal with the Summer Heat before it deals your business a blow the business cannot withstand.

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Tips to Prepare Staff for the Summer Heat

Learn the Signs of Summer Heat Illness

In 2017, 87 people died in the U.S. from exposure to excessive heat According to Injury Facts a division of the National Safety Council. Because of this death toll, it is crucial to first learn the signs of heat illness.  It is always best to act early before an employee is sick than to wait until the employee is dealing with heat exhaustion and heat stroke. It is important to know the difference between heat exhaustion and heat stroke. Heat exhaustion usually occurs when a person has a consistent body temperature of 102 or lower. When experiencing heat exhaustion, a person will be dealing with excessive sweat, dehydration, and maybe even dizziness. When the body temperature is sustained at 103 or higher a person has moved in to a state of heat stroke.  People experiencing a heat stroke will begin to show signs of cool clammy skin, muscle aches, heavy sweating, and a slow heartbeat. Both heat exhaustion and heat stroke should be taken seriously, but a worker experiencing heat stroke needs medical attention fairly quickly.

Monitor Fellow Employees

It is a good idea to keep an eye on fellow workers when the temperatures creep up into the 90’s. Even in the mid to high 80’s a person can start to see the signs of heat exhaustion depending upon their body and the weather their body is accustomed to. Training workers about the symptoms of heat-related illnesses and how to prevent them is a good idea to keep your staff involved in looking out for each other.

Gradually Get Used to the Heat

Depending upon where a business is located, the temperatures will warm at different times. When the first heat wave of the year comes through your area, it is important to help your employees gradually get used to working in the heat. It is best to gradually increase workloads and allow for more frequent breaks as the bodies of your employees adjust to the new warmer temperatures.

Drink Water Frequently

Drinking water frequently is a crucial step to keeping all people healthy while dealing with Summer Heat. Coffee, tea, and soft drinks are not good substitutes for water. Caffeine is included in most of these beverages, and caffeine can dehydrate an individual. If your employees need something with additional flavor, it is important to offer or recommend something with a lot of electrolytes. Beverages with little to no sugar are best. All employees should be drinking something a few times an hour and a minimum of 64 ounces throughout the day. During the hottest Summer Months, much more than 64 ounces is best.

Wear Proper Clothing

Talking with your employees about the best way to prepare for the elements is a good way to encourage your staff to wear the proper attire. If you can afford it, providing some or all of their clothing is ideal. Even providing and requiring them to wear a hat and a light colored shirt can go a long way towards keeping them healthy.

 

Hurricane Season

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Living along the East Coast forces a person to get somewhat comfortable living in the path of Hurricane Alley. Tropical Storm Barry is currently approaching the Gulf Coast. Over this coming weekend, New Orleans is preparing for between 6 to 12 inches of rain over a 72 hour period. As a result of living in a location where hurricanes are a real threat each year, it is important to prepare your family and business for a natural disaster many months in advance. In the eastern and southern states, hurricane season stretches from roughly the first of June through the middle of October. The bulk of the named storms occur during August and September. Although it is rare, some Western States including Alaska, California, Hawaii, Oregon, and Washington can see some threat of a hurricane.

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Just in 2018, Hurricanes Florence and Michael killed nearly 100 people and caused $50 billion in damage. According to the Federal Emergency Management Agency (FEMA), 40 percent of small businesses close for good after facing a natural disaster. In addition, another 25 percent of small businesses close within a year after experiencing a natural disaster. A big reason why small businesses are impacted so severely is because most small businesses occupy only one location. If that location is destroyed, business is stopped permanently until a new location can be found or rebuilt. Medium and Large Sized Business typically have the benefit of multiple locations. If one location is left operational, the business can stay up and running out of that location until accommodations can be made on the damaged location.

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Because of the severe damage that can be caused to a small business, the first thing a small business owner should do to protect the business from the ramifications of a hurricane is to secure adequate flood insurance. The National Flood Insurance Program (NFIP) is offered to homeowners, renters and small business owners if their community participates in NFIP. The average flood insurance policy costs less than about $1,000 a year depending on the size and type of property.

Ways to Prepare your Business for a Hurricane

Partner with an Independent Insurance agent

The best way to make sure you have the proper coverage, enough coverage, and there are no gaps in coverage is to partner with an independent insurance agent like The Insurance Shop LLC. An independent insurance agent is the best agent to partner with because they are not attached to any one carrier. Not being attached to one carrier allows an independent agent to give unfettered advice about each policy and each carrier. When you partner with a captive agent, they are only going to give you the best aspects of their policy. An independent agent can tell you why one policy is a different price and why you might want to use or stray away from a particular carrier.

Establish a Formal Plan

After securing adequate insurance through an independent agent, it is important to establish a natural disaster response plan. The plan should be thorough and well thought out. Establishing a communication plan for how you will communicate with both your employees and your customers can go a long way to the success of your businesses recovery efforts. When a hurricane is in the forecast, you should be able to have a few days if not a week to prepare. This is a time to let your customers know what is going on in the location of your business. Let them know that some things may be delayed if damage is to much.

Secure all Important Documents

In the days before a hurricane hits, It is important to secure important business documents. Those documents should include tax records, legal documents, and financial documents. These documents  should be stored in order to ease removal in a small amount of time. In addition, you should make physical and digital backups. If your business has its own server for the corporate website and the internal documents, it is very important to have a plan for how you will keep these records safe during an emergency. In relation to the businesses specialized equipment, it is important to always take lots of photographs to establish a record of the business’ physical assets. It may be worthwhile to send a copy of these photos to your agent or carrier. When disaster does strike, photo evidence will help claims adjusters or federal relief agencies size up the damage more accurately.

 

 

Heating and Air Conditioning

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Insurance Concerns for Heating and Air Conditioning (HVAC) Companies

Heating and Air Conditioning Companies have HVAC Technicians who  install, service, and repair heating, air-conditioning, ventilation, and refrigeration systems. The scope of this type of work for this class code includes any electrical wiring, cleaning, oiling, adjusting, plumbing, or sheet metal work. Insurance can protect your business from common risks that could result bodily injury as well as property damage claims. As any business owner knows, no two businesses are the same. Because of this, you can expect your HVAC insurance costs to vary carrier to carrier and from business to business. The common factors that can influence what a business pays for workers comp coverage is the businesses claims history, documented safety programs, specific coverage needs, and level of exposure for a business within HVAC Workers Comp Class Code 5537.

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What to consider when buying Insurance for a Heating and Air Conditioning Business

Both at the beginning of the Summer and Winter Heating and Air Conditioning Companies are extremely busy. The fact that the business is dealing with other people’s emergencies can cause chaos to wreak havoc on your business. If the business is not protected properly by a quality insurance package bodily injury and property damage claims can cause a lot of financial damage to the business.

Air conditioning units are most commonly electric-powered, but they are charged with different coolants, some of which may be hazardous. In addition to the chemicals an HVAC Contractor has to interact with, dealing with electrical hazards also present a risk that must be addressed by all businesses. In addition to electrical and chemical risks, the fact that a majority of all work is done at a third party location raises the risk of many injuries. The fact that employees are driving to third party locations presents a driving hazard. Any time there is a driving hazard involved with a business, insurance carriers are weary of offering coverage. The rate for premium with businesses that have a driving risk are always higher compared to businesses without this risk.

Commercial Air Conditioning

Who needs Heating and Air Conditioning Contractor Insurance?

Insurance for HVAC Contractors can be as unique as the risks faced by each business. Class code 5537 is used for most employees in this industry. This class code includes employees that operate within both residential and commercial work. When it comes to the decision to carry workers compensation insurance or not, most every state requires HVAC employers to have Workers’ Compensation Insurance.

There may be exclusions for some businesses in some states depending upon the size, scope, and structure of the business. It is usually in the best interest of the business to secure some form of coverage against employee injuries. Many contracts will require a business or contractor to provide a certificate of insurance just to enter into a contract.

If the HVAC Contractor is the owner of the business and they are the only employee of that business, a ghost policy may meet the requirements for a certificate of insurance needed to enter into most contracts. A ghost policy is usually offered at a significant lower rate then a traditional workers compensation policy. If the business is a startup or is cash strapped for any reason, most carriers offer alternative payment options like Pay as You Go Workers Compensation that require much less up front to get coverage in place.

Top Workplace Safety Concerns for HVAC Companies

When it comes to protecting yourself and your employees, safety protocols are extremely important. An insurance carrier understands the risks associated with operating in the heating and cooling industry. Because of the significant amount of exposure to bodily injury, it is important to implement a well thought out safety program for your business.

The safety program should start the day an employee is hired and should include all employees. The meetings do not have to be exhaustive, but they should be regular and ongoing. Starting a safety committee that includes employees from all levels of seniority is a good way to get buy-in at all levels. The more frequent and regular the communications are about safety, the more likely they are to be adopted throughout the organization.

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Additional Coverages for HVAC Companies and Contractors

  • General Liability
  • Property Insurance
  • Hired and Non-Owned Auto (full commercial auto if vehicles owned)
  • Inland Marine
  • Business Income with Extra Expense

General Liability Insurance

General Liability Insurance covers a business for common bodily injury and property damages. The exposures associated with a heating and air conditioning company are unique and diverse. A Standard General Liability Policy will cover common slips, trips, and falls; but it is important to remember the policy is not all encompassing. In most cases, there are additional policies a business needs to secure.

Commercial Property Insurance

Most business owners are somewhat familiar with this type of insurance because they more then likely own a home. There are a few differences between a homeowners policy and a commercial property insurance policy. THe first primary difference between teh two policies is that on a commercial policy, any number of parties could be listed depending on the ownership structure of the business or property. A home owners policy is most often a single person or a married couple. For a residential insurance policy, the insured is generally covered against claims for premises liability, but when a business is involved it requires additional coverage for  operations, products, and additional liability. A commercial property insurance policy can include loss of income that a homeowners policy does not include. This is important for people who run their business out of their home, because depending upon how the business is structured and the type of coverage you have, there may be a gap in coverage. The final main difference is that residential policies generally cover one property. A commercial policy can be adjusted to involve several properties as long as each property has a similar use.

Commercial Auto Insurance

Commercial Automobile exposures for HVAC Companies are large. This is because of the fact a majority of the work is done at third party locations. The time an employee is driving from work to a remote location and back to the businesses location is consider company time. The business is liable for damages caused in a wreck that is the fault of the employee. This is the case regardless if the employee is driving a company vehicle or their personal automobile. If the employees do frequently use their personal auto, a hired an non owned auto policy should be secured in addition or in place of a commercial auto. Partnering with an independent insurance agent is the best way to determine which policy your business needs.

Inland Marine Insurance

Inland Marine Insurance is the final policy most all HVAC Companies need to secure. Inland marine covers the equipment that is frequently transported away from the businesses property or stored at a third party location. Without this policy any equipment that is damaged not on the property of the business is the responsibility of the business. If your business has expensive equipment that is crucial to the work of your employees, an inland marine insurance policy is necessary to adequately protect your business.

Common Workers Compensation Class Codes:

  • 5537: Heating, Ventilation, A/C and Refrigeration Systems—Install, Service and Repair
  • 8720: Heating and Air Conditioning—Inspection and Outside Sales
  • 3726: Boiler Installation or Repair
  • 5183: Plumbing—Gas or Water

 

10 Questions Every Small Business Owner Should Be Asking Their Agent

If a Small Business Owner is doing their Due Diligence here are 10 Insurance Questions they should be asking

What are all of my Businesses Risks?

It is tremendously important to know what risks your business faces and what risks your business does not face. No one knows your business better than you, but no one knows risk better then your insurance agent. Once you find an insurance agency you trust, it is crucial to speak long and honestly with your agent about all aspects of your business. Having a second set of eyes analyzing the risks you face may bring about aspects of your business a business owner has never thought about.

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Are all my risks covered?

Once you have determined exactly what risks your business faces, it is important to determine how to protect against those risks properly. Having an open relationship with your insurance agent is important to address this part of your risk management and insurance plan. It is important to communicate to your agent what amount of risk you are comfortable with. From the agents perspective, they are in the business of managing risk. It is in their best interest to always assume more risk and protect fully. If you are comfortable with more risk then the average business, it is important to let the agent know. It is equally important to not base your decision solely on price. It is probably a good idea to not let price be the most important factor in your decision. This is because margins are extremely tight in the insurance industry. If a product is discounted compared to all competitors, it usually is because the product is inferior. Going with an inferior insurance policy can cause a lot of headaches when you are faced with a claim, and all businesses have claims eventually.

Do I have any Gaps in Coverage? 

A gap in coverage is a place where a business has two policies that have exclusion related to the coverage. A claim occurs where both policies have an exclusion for the specifics of this claim. The best way to avoid a gap in coverage is to bundle all policies with one carrier and to talk about gaps in coverage with your agent as you shop for coverage.

Are there other ways a Small Business Owner can pay? 

Most carriers offer multiple ways for commercial insurance. The most common form of alternative payment option is Pay as You Go Workers Compensation. Pay as You Go allows businesses to pay premium in real time based upon the actual payroll numbers from the previous month. A traditional workers comp policy is based upon an average of the payroll numbers for the business over the past 2-3 years. A traditional workers comp policy also requires a business to pay anywhere from 25 to 33 percent of the entire premium up front just to get coverage in place. A Pay as You Go Policy allows a business to get coverage in place for as little as a few hundred dollars for most small and medium sized businesses. This frees up cash for more immediate business needs. Additionally, a Pay as You Go Policy eliminates the likelihood of a surprise during the end of term audit. An audit takes place for all businesses at the end of each term. The audit determines finally payroll amounts and determines if all employees are classified properly. The audit may result in a credit to your account because of over payment or it can result in additional premium being owed.

Can a Small Business Owner Experience a Data Breach?

Data breaches are now a problem for all business, big and small. In the past, cyber attacks were only a problem for big businesses. Most small business owners assumed they did not have enough records for cyber criminals to bother to come after their internal systems. Large corporations are catching on to the need for cyber security. As big business becomes more cyber savy, hackers are forced to look to small businesses for access to peoples sensitive financial information. Two of the largest data breaches in history, Target and Home Depot, started by a small business first being hacked. In both of these data breaches, there was a small business that was a partner of the bigger business who had employees that had access to the bigger businesses computer systems. This is becoming a much more common way for cyber criminals to approach gaining access to large amounts of financial records.

Additional Questions to Consider:

  • Do I need to implement a Safety Program?
  • Does Ergonomics around the Office Matter?
  • Are there any discounts available?
  • Can I Adjust the Limits of some policies?
  • Are my employees classified properly?
  • Who and what is insured?

 

Mortgage Brokers

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What are the Workers Compensation Concerns for Mortgage Brokers?   

What is a Mortgage Broker?

A mortgage broker acts as a middleman between a home buyer and all potential lenders. A Mortgage Brokers job is to work on the behalf of a home buyer to interact with several banks to find competitive interest rates that best fit the needs of their customer. Similar to an independent insurance agent, a mortgage broker partners with many lenders to find the best mortgage for the wants and needs of each individual home buyer. In addition to finding the best interest rate for your mortgage, a mortgage broker continues to collaborate with the bank’s underwriting department, the closing agent, and your real estate agent to keep the transaction on time and running smoothly through closing day.

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What makes mortgage brokers different from loan officers?

In the lending industry, a loan officers is an employee of a lender. They are paid by the lender to write loans. Mortgage brokers on the other hand work within a mortgage brokerage firm or independently. Mortgage brokers partner with multiple lenders. They earn the majority of their money from lender-paid fees.

How Should Mortgage Brokers be Classified?  

There are two primary classification codes that employees of a mortgage brokerage business fall into. The first is 8810 which is for office and clerical employees. The common duties for employees within this class code are financial, drafting, answering the telephone, inside sales, designers, editors, programmers, and other general office staff. The second classification code is 8742 for salespersons or collectors. All employees in sales or who drive and travel frequently as part of their job should be placed in this classification code. 

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Underwriters and Mortgage Brokerage Businesses

Mortgage brokerage companies do not typically have a hard time finding affordable workers comp coverage.  This is because of the sedentary nature of the work. Insurance carriers know that slips, trips, and falls are not much of a concern for this industry. The risks of colds and flu are also low because of the small amount of exposure to the public. Long term repetition injuries like carpal tunnel are a slight risk due to the typing and sitting nature of the work. Talking to employees about healthy habits they can incorporate to mitigate these risks can help lower the frequency and severity of claims. Work comp rates do vary significantly between insurance companies and an independent agent can shop your policy around to many carriers in an attempt to get better coverage at a lower rate on premium.

Concerns for Mortgage Brokers Relating to Workers Comp

Workers Compensation risk for a mortgage broker is rather low. Because of the sedentary nature of the job, repetitive use injuries like carpal tunnel are always a risk for Mortgage Brokers. Working in front of a computer is not what humans are designed to do. Trying to implement a safety program with an emphasis on ergonomics can help prevent some of these problems from turning in to loss time for an employee or a workers comp claim for the business. When implemented correctly, safety programs can positively impact the businesses workers comp loss ratio.

 

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Recommended Insurance Programs for Mortgage Companies

Minimum recommended coverage:

  • General Liability
  • Errors & Omissions (Professional Liability)
  • Property Insurance
  • Hired and Non-Owned Auto (full commercial auto if vehicles owned)
  • Commercial Crime Coverage
  • Business Income with Extra Expense

Common Workers Compensation Class Codes for Mortgage Brokers:

  • 8810: Office and Clerical
  • 8772: Outside Sales and Messengers

 

Toolbox Talks

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What are Toolbox Talks and how can they benefit a Small Business

The water cooler is a place that co-workers have often spent time each day talking with each other about what is going on within the business, the community, and their personal lives. Toolbox talks are a way to extend these conversations in to the safety programs of many types of businesses. Primarily toolbox talks take place in the construction industry. Most businesses meet for a moment each day in the morning before heading out to their daily tasks. This is a great time to implement informal safety meetings that can help your business save in many different ways.

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Why should a business implement Toolbox Talks?

A business should implement Toolbox Talks because, if implemented correctly, these talks can limit the frequency and severity of workplace injuries. One primary way a business can save from implementing toolbox talks is by experiencing less injuries by employees on the job. Experiencing less workplace injuries increases productivity and keeps insurance rates as low as possible (especially workers compensation insurance rates). This is because the experience modification rating is the main factor insurance carriers use to determine what to charge a business for workers compensation insurance. The main controllable factor a business has over this rating is the loss report. The frequency and severity of workers compensation insurance claims is the main controllable factor in this rating. Implementing toolbox talks can go a long way towards limiting injuries and keeping the experience modification rating low.

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How to implement Tool Box Talks?

Informal Toolbox Talks are great opportunities for a business owner and key employees to prevent cutting corners, to talk about safety procedures, to remind employees about policies and procedures, to show employees how to use required safety equipment, and what the expectations are regarding safety. These meetings do not have to be long, but they do need to be intentional and well-planned. In addition, these meetings are a good time to get feedback from the employees working on the front line.

Prevent Cutting Corners

If implemented correctly Toolbox Talks can help prevent employees from cutting corners in an attempt to get a job done faster. Legendary UCLA basketball coach John Wooden told many of  his teams “Be quick but don’t hurry.” This is a great example of how an employee should look at when it comes to how fast they should work on a daily basis. In an effort to prevent employees from cutting corners, toolbox talks can be used to give example of how an employee should work quick and examples of how an employee should not hurry.

Talk about Safety Procedures

Safety equipment is a prime example of what you can talk about during these meetings. You can spend a week talking about each type of safety equipment and when the employees should use each type of equipment. Proper use of safety equipment can limit repetitive use injuries, as well as more severe accidents.

Policies and Procedures

Policies and Procedures are crucial to any successful business. This is true when it comes to accounting principles, when it comes to customer service, and it is true when it comes to keeping your staff safe. Having a documented policy about what employees should do in each particular situation, is always the best way to keep everyone safe. This is especially true as a business grows in revenue and the number of employees. Not all situations are able to be planned for in advance, but that is no reason to prepare for what you can.

Required Safety Equipment

Toolbox Talks can be a great opportunity for key employees to talk about safety equipment. Talk about what types of equipment are required, what types of equipment are available, and how to properly use each type of safety equipment. This can help with simple equipment like glasses and belts to help with heavy lifting, but it can also be a time when you talk with all employees about other safety equipment they can benefit from.

Safety Expectations

Toolbox Talks can also be a time when key employees set expectations for safety throughout the organization. IF the leaders of an organization rarely talk about safety, the employees working in the organization will think about safety less. If safety is a regular topic of discussion, it is more likely for the employees of the business to make safety a priority.

 

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It only takes one mistake to result in a severe injury to one or a number of employees. One year when a business has a large claim or a number of small claims, can have impacts on their rate for commercial insurance for years to come. Typically your claims history sticks with the business for three additional years. This time period is what is taken in to consideration when determining a businesses experience modification rating. When this rating gets to a certain level, the insurance carrier deems the business unsafe. When an insurance carrier thinks a business is not safe, it will result in higher premium. In extreme cases, it can make it more difficult for a business to get coverage in the first place. Toolbox Talks can help to prevent this injuries in the first place and these talks can help your business in a number of ways.

Some accidents are avoidable. Some are not. If a business stays active long enough, workplace injuries are going to occur. Carriers look into the claims history of a business when they are looking into offering coverage to a business, what to charge for that coverage, and if they are going to offer credits or debits to entice the business to partner with the carrier. A well-documented safety program is one aspect that can help a business gain additional credits and debits. Regular Toolbox Talks can show an underwriter that the business is taking the steps necessary to limit the frequency and severity of claims.

When planning what topics employees will talk about during toolbox talks, it may be hard to find interesting topics on a regular basis. When leaders have a hard time coming up with topics, it may be a good time to check in with both the insurance agent and insurance carrier of the business. Most carriers have material in place to help businesses implement safety procedures.

Carriers want to insure businesses that file few if any claims. They are after all in the business of mitigating risk. They want to partner with business who share an emphasis on safety and limiting claims.

Example of a Toolbox Talk:

  • Focus on only one subject for each talk.
  • Choose a topic that is industry or department specific.
  • Be specific and limit vague statements.
  • Give concrete examples from incidents from the businesses past.
  • Leave time for comments and questions.