Risk & Business

The commercial general liability policy will cover what the insured is legally obligated to pay due to an occurence. The key trigger here is what is an occurence. There are volumes of case law developed over the years that make that determination. A recent case with the Archdiocese of Milwaukee demonstrates some of the complexity of determining what the policy will cover. The Archdiocese filed a claim against their general liability policy in a case of priest abuse. They made the claim stating that they did not represent that children would be safe under the oversight of priests and thus constitutes an "accident and an "occurence" under the policy. The courts ruled that the abuse does not trigger an accident or an occurence and therefore the Archdiocese cannot use their liability policy for coverage. As you can see unless it is clear cut claim the courts usually determine coverage. Until next time be careful out there and know your risks. K

As more and more information comes out about the upcoming health care law implementation, one thing is clear, agents are not included in the equation. Effective 2012 health insurers must use 85% of the premiums collected for health costs. The rest is for administration and profit. Whoa there nellie... where is the agents commission? Well its not in there or at least not expected to be in there. Actually the health insurers and the Fed are mute on the subject. The agents associations are hearing that no one meant to cut out the agents and health insurers will have to squeeze the cost of paying agents out of the 15% leeway they have, which means it is not going to happen. By the looks of this, agents are going to have to get paid directly by the consumer. If this does not get changed before 2012, I see a major shift in the compensation of agents from commission to fees. I also see this carrying over to other lines of insurance. Are the agents in the country ready for this switch that may

With the insurance industry shedding full time jobs and the recession taking its toll on savings accounts, insurance retirees are coming back to work in the business as part time fill ins. Agencies and insurance companies are realizing that there is a whole lot of talent and knowledge that retired over the last few years and are calling them back. Also the retirees are realizing their nest eggs are shrinking fast and can pick up some quick money working back in the business. This is a stop gap strategy to keep up the work load the business demands without having to bring back the full timers that were let go over the last few years. The problem with this strategy is that we are still not bringing or holding onto young talent in the business. As the business matures and the work force matures the industry will be scrambling to play catch up when the retirees go back to the golf course and bingo games. Until next time be careful out there and know your risks. K

Washington State has enforced Stop Work Orders for construction sites where contractors have no work comp insurance to cover their employees. The contractor if found will face up to $1000 a day in fines and has to post a bond to get reconsideration to start the job again. This is hard core insurance policing. Many construction workers are not covered because their "employers" make them sub contractors when they really are employees. The contractors then do not buy work comp and basically have workers on the job with no coverage. Washington State may be setting a standard for other States to follow to protect workers on jobs. The only way for the work comp system to have adequate rates is to have everyone in the system that needs to be in the system. When contractors try to beat it by making their employees subs when legally they are not, then rates go up because fewer are paying for the claims. Good luck Washington, tell the rest if the States how to get it done, it is for th

Up to recent months the insurance industry has been able to keep their employment numbers in tact. However at the end of October the industry shed 6000 jobs and the number of people employed by the industry is at it's lowest in 20 years. This is a direct result of the current prolonged soft market and recession. Even the steady business model of the inurance industry is having a hard time in the current economic times. Until next time be careful out there and know your risks. K

The new health reform law put in place this year will place profit restrictions on health insurance companies. In order to participate in the State exchanges and to have access to 30 million new potential customers, they have to place 85% of premiums into medical coverage. This leaves 15% for expenses and profits. Also this also includes agents commission. As most insurance company executives will tell you, 15% is not a lot of room to cover for profit, commission and business expense. So the prediction is that agent commissions will be cut from the health insurance premium process. All indications show this to be true, just look at the Federal Government's new website for the upcoming health exchanges and you see no link or reference for agents or brokers. This is quite disturbing because the general public all alone tackling a Federal health system without the advocacy of agents is going to be disaster for the public good. I know the younger , web savy generation will think they c

Recently a Medical Transcription Company was sued by an employee that was fired for posting negative things about her supervisor. This opens up the discussions of managing the risks of Facebook. Social media is not going away. Employees are using it to talk about work and employers are using it to find out what is on the mind of their employees. This is new ground for the courts. How much jurisdiction does an employer have when it comes to Facebook and social media? Can an employer fire an employee for talking disparingly about the boss? Where does it end? I am not sure at this point, it is still early in the social media world. Risk managment professional need to make sure that conversations and risk profiling does not forget social media. Just like any other risk, these technological advancements have to managed both on the employers side and also employees side. Stay tuned for legal precedents and risk management techniques to be established. Until next time be careful out there and

I read an news article today about a man who was caught on tape faking a fall in a grocery store. He purposely spilled some soda on the floor then laid down and screamed that he fell. Well after showing him the surveillance tape, he quickly left the store. I wonder how many claims are really faked. How much money does the insurance industry lose because of fraudulent claims. I am sure the industry really can't figure this out, because people are too creative. Let me give you some more examples. Plumbing employee says he hurts his back on the job. After getting 6 months of work comp and physical therapy and a full restriction from work, a neighbor post a video on you tube of our work comp claimant climbing his roof to put up christmas decorations. In another example a bus hits the rear of a car who stopped suddenly in front of it. Ten passengers on the bus claim to have wip lash. After much investigation the police find out that the driver of the car and the passengers were related.

I just read a article that my professional association Independent Insurance Agents of America (Big I) gave 1.7 million to campaigns for pro-insurance candidates. They also stated that 93% of the candidates they supported won in the election yesterday. Holy cow, talk about effectiveness. In my previous post I said this election will affect the insurance industry, well with this type of success it sure will. The biggest fear the industry has right now is Federal regulation. If the elected candidates are real supporters of the industry then the States will continue to regulate insurance. I hope they don't get "DC'd" and change their minds. All of us in the industry depend on them to keep us in a regulatory environment to allow growth and healthy competition in insurance. Until next time be careful out there and know your risks. K