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      Nadler Insurance Advice Blog


      Workers' Compensation Is Necessary to Protect Businesses and Employees

      Because workers’ compensation pays for medical expenses from on-the-job accidents and work-related injuries, it protects both the employer and the employee. In fact, most states require workers’ compensation for certain employer groups. In addition, as insurance agents we strongly recommend all employers carry this coverage (regardless of the number of employees) as an obvious protection against liability.

      Yet, workers’ compensation can be costly for small- and even medium-sized businesses. Therefore, laws enacted in the late 1980s allow the use of “preferred providers” to curb medical care costs and promote a quicker return-to-work process, with increased emphasis on fraud detection and better price points among workers’ compensation insurers. Even so, the coverage and price of workers’ compensation policies still vary greatly.

      With this mind, it pays to shop around for workers’ compensation packages that fit your needs, and your budget. Also, check with your state’s labor department for its definition of an “employee” as it may include a full-time, 40-hour-per-week person, as well as someone who only works three hours a week. Obviously, such variances will affect your needs and your cost for the plan.

      Each state has its own workers’ compensation requirements, including a list of illnesses and injuries that qualify for legitimate claims. The state also mandates the level of benefits you must provide for employees. These rules will typically address the amount of coverage required for each employee and the percentage of the employee’s salary that you must pay. A good idea is to review this list and keep it accessible for future reference for you and your employees. These initiatives will prevent the filing of uncovered claims and serve to minimize misunderstandings.

      Workers’ compensation policies may pay medical benefits, disability income benefits, rehabilitation benefits, and death benefits. These policies may also utilize a managed care program that sends injured or ill employees to a doctor in your insurance company’s network, further protecting the employer while minimizing costly confusion.

      As with all insurance plans, too much workers’ compensation coverage is certainly better than too little. In addition, many workers’ compensation insurance policies provide liability insurance to cover you and your business in the event the family of an employee who is killed in the workplace sues an employer. This option should also be closely examined when striving for maximum coverage.


      Power Up After the Storm with a Generator for Your Home

      Ask any Floridian and they’ll tell you that an emergency generator is like gold after a hurricane.  Almost all of us live in a geographic area susceptible to earthquakes, hurricanes, tornados, or ice storms.  In each of those disasters, a backup emergency generator can quickly become your most valuable possession.

      Generators come in different sizes and types.  The larger the generator the more items you can operate at once.  You must balance your anticipated needs in an emergency with the cost of the generator. 

      Generally, there are two types of generators to choose from.  The first type is the permanent standby generator.  This generator is installed as part of the electrical system in your home or business and provides power directly to the building’s wiring.  An automatic switch prevents the generator from “backfeeding” power to utility lines, as well as protecting the generator from damage once power is restored.  Permanent standby generators must be installed by a licensed electrician and require inspection from your city or county building department. 

      The portable generator is probably more familiar to the homeowner.  With a portable generator, you can physically move the generator to the location required, and hook up specific items directly to the generator.  Most homes require a 5,000-watt generator, which cost between $500 and $3,000, depending on options and quality.  You may also opt for a smaller unit, capable of running a few lights, fan, and a television.  If you anticipate running a large appliance such as a full-size refrigerator, sump pump, or water-well pump, make sure your generator can start and maintain the item.  You do not want to ruin the motor of your appliance because you tried to operate it with a small generator that could not provide the appliance with the proper electrical current.

      Before shopping for a generator, evaluate what items you will need in an emergency and the amount of current they pull.  Total the watts and look at generators that can operate the amount of wattage you require.  If you are unsure, consult the item’s owner’s manual for information on how much wattage it uses.  Also, keep in mind the type of emergency you anticipate.  If you live in the northeast and expect blizzard conditions, a generator that will safely operate your furnace will prevent frozen pipes, as well as keep you warm.  If you live in the coastal south and are planning for a hurricane, you will need a generator that can operate a cooling system, or at least a few fans, as well as your refrigerator.  And any home that is supplied by well water will require the well pump to be on a generator if you want to flush the toilet.

      As with any household appliance, there are some safety hazards associated with generators.  As stated earlier, generators installed as part of your homes electrical system can backfeed current into your home, causing damage to equipment, or even cause a fire if not properly installed.  Consult a qualified electrician to install this type of generator.  Also, generators burn fuel and must be run outdoors.  Generators should never be run in a garage or in any room that connects to the house.  Cords to and from your generator should be properly sized to prevent overheating and damage to equipment.  By following these straightforward guidelines, you can enjoy heating or cooling, unspoiled food, working bathrooms, and even a little entertainment during an otherwise disastrous situation.


      Understanding Directors and Officers (D&O) Liability Insurance

      Directors and Officers Liability insurance, or D&O, covers corporate activities. Because a corporation is legally a person, as are the directors and officers who direct it, D&O serves to protect each from liability associated with various actions and inactions.

      But what happens when corporate interests differ from those of these individuals? In short, the coverage is not the same. An indemnity policy protects the corporation, while a D&O policy covers the individual acts of directors and officers. The two types of policies can work hand-in-hand to provide complementary coverage. They can also work apart.

      D&O policies do not cover criminal acts and are primarily for civil remedies, mainly damages. First and foremost, D&O policies represent the interests of the shareholders, as a group, and other corporate constituencies in directing the business and affairs of the corporation within the law.

      D&O policies offer individual directors and officers the protection they need from personal liability and financial loss stemming from wrongful acts committed while acting as a corporate officer or director. Most policies also cover the liability of the corporate entity itself when the liability is from a claim involving the company’s purchase or sale of securities.

      Keep in mind, all companies - those that employ one or more individuals, work with customers, clients, or even competitors - are at risk. Any perceived violation leaves both the directors and officers of the company, as well as the corporate entity itself, at risk for lawsuit and in need of applicable coverage to adequately protect the business as well as the directors and officers involved.

      Employment Practices Liability (EPL) can provide additional coverage, acting like an excess policy in an employment situation, and can also involve claims by and against management. Enhanced coverage on a standard D&O may cover EPL, but should be verified with your insurance agent.  Actions including wrongful termination or demotion, breach of contract or agreement, negligent evaluation of an employee’s performance, refusal to hire or promote someone, workplace harassment, failure to follow the company’s personnel manual and more, can fall under EPL.

      Insurance experts advise protecting yourself and your business with indemnity or D&O coverage and suggest you understand exactly what your policy covers. Remember, if your D&O policy does not cover EPL, you should consider purchasing EPL coverage, or have it written into your D&O policy.


      Protect Your Possessions with an Electronic Home Inventory

      Having a homeowner’s insurance policy is not enough to thoroughly protect all the possessions in your home.  Only by documenting your goods and updating the list on a regular basis, can you ensure you have enough insurance, settle claims faster and substantiate losses for income tax purposes.  The process of creating a home inventory may sound overwhelming, but technology has made it quite simple.

      A traditional home inventory is a basic list of all belongings along with receipts to substantiate their value.  Camcorders and digital cameras have added much dimension to home inventories.  Video taped inventories are especially useful as you can narrate along with the video.  

      To create a video home inventory, walk through every room of your home and pan around the room with the camera.  Don’t forget to open drawers and closets to record and describe what items are there.  Whenever you can, note where you bought each item and its make and model.  Make sure to categorically include toys, music CDs and even clothing and linens, as the cost of replacing these items can be substantial.  Take particular note of expensive items including jewelry, furs and collectibles that may require additional insurance. 

      In addition to documenting your possessions electronically, make sure that you keep copies of supportive records including sales receipts, purchase contracts and appraisals.  Also, record the serial numbers for major appliances and electronic equipment.  Serial numbers usually can be found on the back or bottom of these items. 

      Follow the same steps when creating a digital photograph home inventory except make written notations about the items.  Whatever form your home inventory takes, take steps to ensure you store it properly.  Either print out the files or burn a CD.  Keep a copy in a safety deposit box or have a friend store it.   Keeping only one copy in your house will serve no purpose if your home is severely damaged by a fire or other widespread disaster.  The same is true if your sole electronic home inventory is wiped out through a computer hard drive crash. 

      In addition to annually updating your home inventory, it is important to update to include newly acquired items.  The Insurance Information Institute has created Home Inventory Software that is free to the homeowners and renters.  The “Know Your Stuff - Home Inventory Software” is available  The software includes a customizable room-by-room list of possessions and can also store electronic images.


      Liability Insurance: Hired and Non-Owned Auto Policies Provide Necessary Coverage

      Non-owned auto coverage and hired auto coverage both provide coverage for you and your business in the event an employee is involved in an accident while working on your clock. But the similarities stop here. These different policies offer very different types of coverage, and it is important to understand each to ensure you find the policy that is right for you.

      On one hand, non-owned auto coverage protects your company if sued as a result of an auto accident that you or one of your employees has in a personal vehicle while on company business. On the other hand, hired auto coverage provides your business with liability insurance for vehicles that you rent on a short-term basis for business purposes.

      These coverage options should be considered if your company rents cars or vans for business purposes (including travel to conferences, visiting clients, etc.) or if employees use their personal vehicles to run company errands.

      Hired auto liability will pay for damages to a third party if you or one of your employees causes an accident or injury to someone while driving a rented vehicle for business purposes. For instance, if you rent a vehicle to drive employees to a conference or to visit a client and cause an accident during the trip, the person you hit will undoubtedly look to your company to pay for damages. Without this coverage, your company will have no insurance for the rented vehicle.

      The same applies if you have an employee run an errand or visit a client in his or her personal car. If the employee causes an accident, the injured party will look to your company to pay damages since the employee was using the car on company business.

      Both of these coverages are usually added to a general liability policy. When there are no vehicles titled in the company name, this additional coverage will serve to meet the contract requirement for commercial auto coverage in most states.

      Hired auto coverage replaces or augments the liability coverage offered by auto rental agencies. However, the vehicle must be rented in the company’s name. This does not replace the physical damage coverage that applies to damage caused to the vehicle rented by your company.

      Non-owned auto coverage protects your company in the event it is sued as a result of an employee accident, but it will not protect you or your employee personally. Only your personal auto insurance policy can do that.

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      Copyright © 2012, Paul R. Nadler Insurance Services. All rights reserved.

      This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License.

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