Risk & Business

You can go to any exercise facility or health spa and see a plethora of wearable fitness devices on people.  This technology delivers to a smart phone exactly what is happening in the body during a workout. Now small business is getting in the act with the help of the insurance industry.  Placing wearable devices on employees to monitor their work habits is a new trend. The employer can determine if the employee is at risk physically and if there is unsafe behavior going on. Insurance companies are hoping to see less claims as the result. Small businesses could  see lower insurance premiums for work comp or health insurance as a result to this practice. However employees see it differently. Workers tend to think that wearable technology is a spy program that could be used against them in the employer-employee relationship. Also many employees feel that this is an invasion of their privacy. Only time and litigation will determine the usage of wearable monitors. Technology...

Many small business owners believe they are not required to keep OSHA logs on their employee injuries and illnesses. This is not the case. Under the OSHA regulations, if an employer has over 10 employee equivalents then they have to keep the logs. This means that each year the employer needs to keep an OSHA 300 log. This form records injuries, illnesses, and loss work days for each incident that occurs during the year. Also the OSHA 300A , which is a summary of the 300 form,  needs to be posted from January to April each year so all can see. In addition the OSHA form 301 needs to be filled out separately for each employee injury or illness within seven days of the incident. Can you get an exemption from doing this?  On the OSHA website there are some business that are exempt. You can determine if your industry is one of them by typing in your SIC code in the search engine on the website.  What happens if you don't keep the records?  Well, that means you could be ...

A few years ago  Delaware changed the law requiring independent contractors that are sole proprietors, in the construction trades to get work comp coverage on themselves. They also made general contractors responsible for the work comp premium if they use independent contractors that do not have the coverage. If the independent contractors are a corporation or an LLC then the individual can exempt themselves ( and other officers), from Work Comp coverage with the proper corporate documents and Comp Bureau forms. Also the general contractors will not be charged for the independent's work comp. This sounds pretty straight forward right? well, there is still much confusion.  This confusion always comes to the surface during an insurance audit. The insurance company auditors are charging general contractors for the work comp coverage of independent contractors if their exemption paper work or certificates of insurance are not up to date or ...

On January 2 in the early morning a small earthquake hit New Jersey. Most people did not even notice it, and  no property damage was reported.  So is it time now to start talking about insurance coverage for earthquakes?  In most property insurance policies , damage by earthquakes is not covered. In the Mid-Atlantic region earthquake coverage is rarely purchased by small business owners. However it may be time to start adding this coverage to your insurance portfolio. A few years ago there was an earthquake in Delaware and tremors hit PA and NY.  Many business owners do not purchase the coverage because damaging earthquakes just don't happen in our area of the MidAtlantic. However based on recent small "shakes" that our area has experienced , it is now time to have a conversation with your insurance professional about earthquake coverage. Until next time be careful out there and know your risks. G. Kevin Nemith President CNC Insurance Assoc. & Small Business I...

From all of us at CNC Insurance Associates & The Small Business Insurance Center, we want to wish all our customers and readers a very Merry Christmas and happy holiday season. You have made our blog one of the most read insurance blogs in our area. We thank you !!! We would be remiss however if we didn't put on our risk manager's hat and remind you to be careful out there and know your risks. Have a SAFE holiday !!! G. Kevin Nemith  President CNC Insurance Assoc. Inc. & The Small Business Insurance Center Serving DE. MD, PA, NJ, & VA www.cncinsurance.com www.bizinsurancetv.org

Insurance industry watch out, here comes Peer To Peer insurance sharing and it could revolutionize the industry. What is this about?  Well a couple of pioneer investors are looking to create and implement an insurance company where people can share in the risks and bypass the big insurance companies. The mechanism is not published yet but it looks a lot like peer to peer funding. The difference is that the risk takers can make money if there are no claims on their risks. Insurance regulators are looking hard at the model and I am sure there will be some push back. However consumers see this as a way to shake up the experience of insurance and change the industry. Stay tuned folks and as always be careful out there and know your risks. G. Kevin Nemith Pres.  of CNC Insurance Associates Inc. & The Small Business Insurance Center Serving DE, MD, VA, NJ & PA www.cncinsurance.com www.bizinsurancetv.org

It was announced today by the Delaware Insurance Department that health insurers will be reimbursing 2.0 million dollars back to 14,399 health policy holders. So attention to all the small business owners in the state, your employees may be getting checks in the mail. It would be good to outline why this is occurring, and what to say when you employees come to you for an explanation. It all begins with the Affordable Care Act ( Obama Care), which spelled out that health insurance companies must spend 80% of every dollar on medical costs and activities that improve health. This leaves 20% left to pay salaries, administration, marketing, commissions, and make a profit. If health insurers do not meet this ratio they are forced to pay up. So in the case of Delaware, the health insurers spent less than 80% on covering health costs and more than 20% on admin, salaries, and profit. Health insurers find themselves having to manage this ratio or pay big rebates. As ...

Many small business owners are into wellness initiatives for their employees. These programs are designed to help lower the medical costs and improve the health of their workforce. As part of these plans are treadmill desks and exercise balls for chairs.  More small business owners are trying these items out to help the fitness of employees. Risk managers, however are saying,  "hold on, there are issues with these things".  Exercise balls for chairs cause ergonomic issues with the desks and computers as most people will be towering above them. This causes a "hunched over" work environment. Also many employees just do not have the core strength to sit all day on the exercise ball and work. This can cause all kinds of physical problems.  As for treadmill desks, the risk managers are seeing employees getting hurt. Most workers do not wear the appropriate shoes and also cannot keep their balance for long periods of time on the treadmills. Most injuries are fro...

As the new health care rules and regulations force mergers of health insurance companies, new insurers are forming to fill the void. These new insurance companies are owned by institutions like hospitals and  health care networks and are bringing new competition into the marketplace. According to the leaders of these new institutions, their goal is to bring more affordable health insurance to employers and employees. The Affordable Care Act has caused a rapid rise in deductibles and premiums which many employers and employees are struggling to pay for. The new insurance companies which are able to run smaller and more effecient are going to compete for the same premium dollars that many of the larger insurance companies have gobbled up under the ACA. This is welcome news for small business, whose only choice in many cases was to drop health coverage or lay off workers because of the premium increases. Only time will tell how much impact these new hospital owned insurance companies...

Recently, the board of directors for Volkswagon were served with a lawsuit from shareholders over the now well documented emmissions fraud. This will be a high profile case and will certainly expose the risks that directors and officers of companies have. Even in small business the claims against board members is increasing. General liability policies do cover the directors of companies in their capacity of business  but only for property damage and bodily injury. However the general liability policy has no coverage for the directors when they are sued personally for thier oversight or fiscal decisions. This is where the D&O insurance policy comes into play. These policies are written to specifically cover suits against directors and officers for thier personal liability in running companies.  Laws in most states allow directors to be sued, and is the reason for having these policies in place if you have a business that is controlled by a board. Talk to your insurance prof...

Small business trucking operations help create the backbone of our economy. However many are paying higher insurance premiums and are being penalized by the misuse of the Federal Motor Carrier Safety data. The SMS (Safety Measurement System) was developed by the Federal Government to identify those trucking risks that need to be scrutinized for roadside checks and onsite inspections. Unfortunately, insurance carriers and the courts are using the data to determine insurance rates and civil liability. The SMS data website clearly states that the data is for determining which trucking risks should be inspected. However the public availability of the data is enhancing its use for other purposes. This creates a big problem for small business trucking.  The data is flawed in the sense that small violations can be weighted inappropriately and this data is used as gospel by insurers and the legal community. Many trucking operations who have fantastic loss ratios but problematic SMS scores...

Effective in 2014, the Federal Government enacted parity laws for mental health programs in employer sponsored health plans. The legislation taken from the Mental Health Parity and Addiction Equity act of 2008, puts the burden of compliance on small business. Gone are the financial and treatment limits that affect out of pocket costs. Also the number of mental health days and visits are no longer limited. What does this mean for small business? It means that employers are going to have to review their plan options with mental health in mind. If the plans they are choosing to offer for their employees do not have mental health parity with other coverages,  then the small business owner could be in violation of the law. To make matters even more confusing, States that have similiar laws must also be complied with. If your State does not have parity laws on the books then the Federal legislation will dictate. Small business owners should consult with their health administrators and ...

Since its inception, the Federal Flood Insurance program has struggled with debt. This government backed program is currently 24 million dollars in the hole. The reason is that the Federal program has not charged the proper premiums for the risks that are in flood zones. Big payouts have ensued from storms over the years, and the debt has grown. So many in the industry are calling for private money to take over the program. There is plenty of capital in the insurance  marketplace and also new technology to help charge the proper premiums for the exposure., so now may be the time. Unfortunately the Federal Government does not have the political will to make that happen. The main reason is most policies are under priced and to make the corrections many voter's premiums would skyrocket.  In 2012 the Biggert- Waters bill did just that only to have it recalled because of the public outcry when they got their renewal bills. Sooner or later something has to be done. If the debt hole ...

The insurance marketplace that we deal with every day in America is directly tied to world events. So expect insurance rates to rise over the next year, especially in property. The Tianjin China port explosion will cost the world insurance market in excess of 1.5 billion dollars. This is a very big insurance event. This port was being used by most of the Fortune 500 companies in the world. As these companies make claims to their respective insurers, capital that is stored up in insurance companies will need to be replaced. So how do insurance companies replace capital?  They raise rates.  Only time will tell but it will be a sure bet that property rates will rise in 2016. Until next time be careful out there and know your risks. G. Kevin Nemith President CNC Insurance Assoc. & The Small Business Insurance Center Proudly Serving DE, MD, NJ, PA, & VA www.cncinsurance.com www.bizinsurancetv.org

Business liability policies will cover advertising, marketing and trademark liability claims. The coverage language is found in Part B of the standard ISO General Liability policy. The ability for businesses to do their own marketing and advertising has increased with technology, but so has their exposure to claims. Just a few years back, most businesses would hire marketing or advertising firms to promote their business. These firms would carry special insurance to cover claims. Now, with business owners doing their own thing, they are finding themselves testing their business general liability policy for coverage. So what will the business owners' liability policy will cover? You can expect coverage for libel & slander, violation of right of privacy, copyright infringement, and trademark infringement. With the explosion of do it yourself advertising and marketing, many small business owners are surprised when they get sued for one of these exposures. The good ...

As a small business owner today, cyber marketing is a must. Ninety percent of all consumers use search engines to buy products or verify businesses which they want to buy products or services. Small business owners now must use cyber marketing to compete. What is cyber marketing?  It is the use of social media, websites, SEO, and email marketing techniques, all linked together, that promote your business in a coordinated marketing strategy. Along with this new strategy comes new liabilities. Small business owners are now facing claims for various occurrences. Privacy breaches, email libel and slander, social media copyright infringements, etc..... are just some of the new liability claims brought against small bsuiness. Now the question becomes , "does our insurance policy cover this" ?   This is a question for every business owner's insurance professional. Many current policies do respond to cyber marketing claims but many still do not. The best risk management response ...

The "sharing economy" is on the rise.  Young consumers are looking to save costs by sharing everything. Housing, rides, personal property, technology, are just some of the areas where people are sharing expenses. So how will the insurance industry react?  The industry is not built on sharing insurance policies.  An insurance policy is a contract between the insurance company and the named insured. The industry closely reviews the named insured before writing an insurance policy. Even times where there are multiple named insureds, the companies underwrite to make sure they know who they are and the relationship to one another. The new "sharing economy" presents some unique challenges.  Future consumers will want the flexibility to share risks with multiple people. This flies completely in the face of insurance company underwriting standards. The future consumer will want to share risks in a moments notice. This also p...

The headline reads " Federal Government Office of Personel Hacked". This is why every business owner needs a Cyber Crime insurance policy. The crimes of hacking and breaking into computers has reached the highest levels. If you run a small business do not be fooled by the false security of your malware and virus guards. Do not think that your IT consultant that comes in once a month is smarter than the hackers. Your security and fire walls are sitting ducks to these criminals. A Cyber Liability insurance policy will not stop your from being hacked, but it will pay for the liability you may be saddled with when it happens. The insurance will provide you coverage for your damage and replacement and also the costs of liability to others because you failed to protect their data and personal information. Small business owners call your insurance professional today, and buy the coverage for cyber crime. The risk of loss is greater than it has ever been in the history of our soc...

Like individuals, many businesses are looking to get into the ride sharing world to make better use of their fleets and routes. They are looking at it as a way to increase income. With technology, having folks "ride along" for a price has become really easy. A word of caution is warranted however when looking at the commercial auto insurance policy. As a small business owner you could be exposing your business to a "truck" load of liability. Many of the insurance companies will exclude "livery" or "public transportation" in policies. Also many state jurisdictions have limited Personal Injury Protection limits which could leave the business underinsured for passenger injuries. There are many other exposures for ride sharing that have to be dealt with before it can become good idea to increase income. Time will tell as the insurance industry and State legislatures respond to the market demand for ride sharing. Stay tuned. Until next time be careful...

One of the biggest risks developing for construction small business is lack of talent to fill jobs. During the recession of 2008-2011, construction companies had to reduce their work force to stay in business. This meant a lot of well qualified workers were laid off. Now that construction is picking back up, these same workers are older and do not want to come back to work. Also the industry did not do a good job of recruiting and training a younger workforce and this has created a gap. If you ask small business owners in the construction business they will tell you, "I can't find help" and will continue to be a big problem. The need is in the field, project management, leadership, and even engineering. The economy depends on the construction industry to drive growth. This could be stalled if projects cannot get done or the amount of available work lay dormant because of a reduced construction work force. Only time will tell if these available jobs will be filled in time ...