Risk & Business

My last blog post discussed the increasing losses that are occurring in automobile insurance. Right on cue, OSHA released its top causes of fatal accidents and guess what? ,  it is auto.  According to OSHA and the US Bureau of Labor Statistics, 41% of all fatal  work place  injuries were caused by transportation losses, i.e. Auto losses.  Coming in a distant second is falls and trips at 17%.  This brings up a interesting risk management discussion. What is causing this ?  Is it more commercial vehicles on the road, or less capable drivers,  or even more impaired drivers?  Technological  distractions could also be the culprit (cell phones) .   Fleet safety incentives and programs that have been pushed by insurers, obviously are not improving loss ratios. Telematics and GPS monitoring is not helping either. Only time will tell how this will play out. Insurance companies will want to see improving results or small business owners will be seeing higher rates.  Until next time be careful o

Recent reports from many insurance sources are indicating a loss problem in automobile insurance. Many insurance companies are showing this line as losing money. Underwriting results are getting worse each quarter. So what is causing this to happen? Historically, auto insurance has been a winner for insurance companies. Some experts feel it is the price of gas. With the cost per gallon lower than it has been in years more people are driving which cause more accidents. Also the cost of a new car has skyrocketed. You can't get away with buying any new car under $25000 these days, so the cost to fix a damaged one is putting pressure on insurance company profits. Don't forget all those texting drivers out there. Could cell phones be distracting more drivers than previously thought?  One thing for sure, unless the auto insurance line turns around, you can expect a rise in rates in the very near future. The insurance industry will not absorb losses for very long before adjusting pre

Occasionally, I get questioned about the difference between mutual insurance companies and stock insurance companies. So I will try to explain the difference so you as a small business owner can decide if it makes a difference in your insurance purchase. Mutual companies are owned by their policy holders and stock companies are owned by stock holders. Both mutual and stock companies can be very large and write insurance on a national scale, or small and only write in a region.  On closer look, when you buy a policy from a mutual company you are technically one of the owners of that company as long as you purchase insurance from them. Your insurance policy is your "ticket" to ownership. If there is profit at the end of the year and a dividend is declared, the policy holders will reap the benefits and may get some of their premium back. With a stock company, where stock holders actually own stock certificates, the profits are returned to the holders of those stock certificates

A recent interpretation letter from OSHA has put a big "monkey wrench" in post accident drug testing policies. Most small businesses have policies to drug test workers post accident. In many of the federal and state projects this is required of the employer. However OSHA is looking at post accident drug testing very closely. If they feel there is a possibility of the program inhibiting injury or illness reporting by employees or if the program is used for unreasonable discipline actions, then the employer could be fined.  This is definitely problematic for small business. The need for good risk management and the protection of the public, guides the use of post accident drug testing. OSHA could however turn this upside down if they begin enforcing and fining employers for their programs. Keep an eye on this one folks. Until next time be careful out there and know your risks. G. Kevin Nemith, President CNC Insurance Assoc. & The Small Business Insurance Center Serving

The horrific events in Orlando emphasize a second look at your insurance coverage. Small business owners do not have coverage for terrorism events. However each renewal cycle, you as the business owner, have the option to buy or reject the coverage which is underwritten by the Federal Government.  Since September 9/11 this coverage has been available but most business owners will sign the rejection form to save premium. Unfortunately, today and going forward this coverage is going to be needed as we face the growing threat of terrorism in our country. For small business owners you can purchase terrorism coverage for your property, liability and work comp. The cost of the coverage will vary depending on values, limits, and exposure. Make sure you have a conversation with your insurance professional about how to protect your business from terrorism. Until next time be careful out there and know your risks. G. Kevin Nemith,  President CNC Insurance Assoc. & The Small Business Insura

Many small business owners are using undocumented workers as employees. Most of the time this is done without even knowing it as many workers will use fake social security numbers or tax ID numbers, to pass the screening and hiring process. However when an on the job injury occurs the medical bills and lost wages are still the responsibility of the business owner, both from a legal and moral position. The good news however is that more and more states are allowing the work comp system to pay for these claims. Prior to these legislative changes many small business employers found themselves in a pickle with legitimate claims to pay and no legal way to use the work comp system to pay them. Even the states that have not put legislation in place, there is case law which gives the insurance companies who cover work comp a "directive" to pay these injury claims.  This is good news for small business because it takes them out of the legal cross hairs , especially when most business