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Kelly Mansfield

13 Sep

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5 Steps to Reduce Workplace Injuries

September 13, 2016 | By |

Ben Franklin once said, “An ounce of prevention is worth a pound of cure.” Workplace injuries accounted to $170 billion (OSHA) of costs paid by small businesses in the US. Direct expenses associated with worker injuries include medical care, lost wages, overtime, and additional training and human resource expenses. Further, indirect costs such as decreased productivity, lower morale, higher workers’ compensation premiums, damage to reputation or brand, and increased turnover quickly add up resulting in lost profits.

However, businesses can take a proactive approach to preventing worker injuries in order to reduce the costs involved with injuries. Here are 5 steps that a business can take today to reduce worker injuries:

Commit to safety and engage employees. Commitment to safety should begin with owners and upper management team members, and should be communicated clearly throughout the organization. Managers promote safety by following safety guidelines themselves and by modeling safe practices at all times, while encouraging employees to do the same.

Responsibility for safety should be assigned to appropriate team members. Safety responsibilities should also be included in employee job descriptions.

Internal meetings further increase awareness of safety initiatives and allow for open discussion on the importance of safety in the workplace. Initially, a meeting should be held to communicate management’s commitment to keeping employees safe on the job.

Analyze current operations and workplace hazards. OSHA offers several resources to assist employers in assessing safety. Self-inspection checklists are provided in OSHA’s Small Business Handbook and OSHA has an on-site confidential consultation program to assist businesses with analyzing workplace safety. Business insurance companies often offer loss control services to help with identifying potential exposures and reducing workplace injuries, and often have credits or discounts available for companies who show a commitment to safety.

Develop and implement an action plan to lower hazards. After safety issues are identified, implement a corrective action plan. Assign responsibility for follow through to appropriate team members, and use action steps and deadlines that can measured. Document hazards that were identified and the steps taken to prevent future injuries.

When an injury occurs, immediately perform an investigation to determine what happened and how the injury may have been prevented. Make appropriate changes to procedures in order to prevent future injuries.

Provide training to employees. It is imperative that employees understand how to perform their jobs safely. Consistent training should be provided that instructs employees on safety policies, safe practices, and actions to take in the event of injury. OSHA offers a large inventory of training resources. Insurance companies also often provide resources for safety training.

Monitor the safety program and adjust as necessary. Inevitably, industries change and procedures need to adjusted. Make it a point to revisit your safety program at least semi-annually and make adjustments as necessary.

By committing to safety and taking steps to protect workers from injury, businesses can reduce the costs associated with workplace injuries. The “ounce of prevention” taken today could result in future profits that are retained and invested rather than spent on worker injury costs.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

22 Aug

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What is the Difference Between General Liability and Professional Liability?

August 22, 2016 | By |

Most of my clients are familiar with general liability and the need to protect their companies against general liability losses. Yet, professional liability is often just as important, but much less understood. In this article, I’ll give a brief description of general and professional liability and point out some of the key differences between them.

General liability is intended to cover damages to a third party resulting from bodily injury or property damage. General liability policies include coverage for premises liability, and often include coverage for products liability. Some examples of common general liability claims include slips, trips and falls at a business premises. Other examples include property damage or bodily injury caused at a customer’s home or place of business, or damages caused by a product that is manufactured or distributed by a business.

Professional liability, sometimes used interchangeably with errors & omissions (E&O), covers professional mistakes that result in economic loss to a third party. For example, if a professional is hired to make recommendations to improve a process and the recommendations result in financial loss rather than gain to their customer, the customer may claim economic damages.

There are several differences between general liability and professional liability. Here are  3 key differences:

1. Coverage Triggers-The coverage triggers that obligate an insurer to respond to a general liability claim are bodily injury or property damage. Simply put, there must be bodily injury or property damage in order for general liability coverage to apply.

In comparison, the trigger for professional liability is the notice to the insured of economic damage claimed by a third party.

2. Coverage Period-General liability policies are usually written on an “occurrence” basis, which means that the policy responds when a third party suffers bodily injury or property damage, regardless of when the claim is filed for damages. In other words, a claim could be filed for a policy that was in effect several years prior if the incident that resulted in damage occurred during the prior policy period.

In contrast, professional liability policies are often written on a “claims-made” basis, which requires that a claim be made during the policy term or within a specified period following the policy term. In other words, the incident must occur during the policy period and the claim must be reported within the policy period. Thus, if a claim is brought after the policy term in which the incident occurred, and there are no changes to the current policy to cover prior acts, there would likely be no coverage in place.

3. Retention-General liability policies often do not require a deductible or out-of-pocket expense in the event of a claim. Although, some general liability policies do include a small deductible.

In contrast, professional liability policies generally include a “retention,” commonly ranging between $1,000 and $10,000. The retention must be paid by the insured before the policy responds.

In summary, general liability coverage protects a business from claims resulting from bodily injury or property damage suffered by a third party. Professional liability protects a business from economic damage claims resulting from professional mistakes.

The examples above are some of the key differences between general liability and professional liability. However, it is important to discuss the unique insurance needs of your business and the specifics of your business coverage with a licensed insurance professional. At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

08 Aug

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5 Steps to Prepare for a Business Interruption

August 8, 2016 | By |

There are some startling statistics when it comes to the failure rate of businesses after a disaster. Here are just a few according to the Federal Emergency Management Agency (FEMA):

  • 40% of businesses do not reopen after a catastrophic event.
  • Of the businesses that do resume operations, 25% fail within the first year.

These statistics reveal the importance of preparing for the unexpected and taking action to mitigate the risk associated with the temporary closing of a business. Here are 5 steps to plan for a business interruption:

1. Know what your business stands to lose. It is important to determine the potential financial damage that your business could suffer in the event of a business disruption. Analyzing past, current, and future profit and loss statements, historical sales, and anticipated income and expenses will help to determine the potential exposure to a business income loss.

2. Identify risks to your business that could result in a business income loss. There are multiple perils that could result in a business having an income loss. Some examples include fire, windstorm, vandalism, water damage, and cyber events.

3. Prepare a business continuity plan. Developing a business continuity plan before a disaster happens will allow your business to recover more quickly and lessen the burden of determining a plan of action after a disaster.

4. Have a “big picture” view of your supply chain. Determine which critical suppliers and customers your business depends on and how an interruption in their business could impact your revenue.

5. Secure appropriate business interruption insurance coverage.

Business income or business interruption coverage pays for the loss of income that a business sustains due to a covered property loss on a commercial or business owners’ policy. Business income coverage generally includes coverage for lost revenue as a result of business closure, fixed expenses (like rent or utility costs), and the expenses of operating from a temporary substitute location.

Coverage for business income includes a time limitation referred to as the “period of restoration,” which begins when the direct damage occurs and ends when the property should be rebuilt, repaired, or replaced. Talk with your commercial insurance agent about business interruption coverage, and familiarize yourself with the coverage and any limitations to the policy.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?males-1002779_1920

25 Jul

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What You Should Know Before Adding an Additional Insured to Your Policy

July 25, 2016 | By |

I often receive requests from my clients to add an additional insured endorsement to their commercial general liability (CGL) policy due to a contract requirement. It is not uncommon for a general contractor, a customer, a mortgagee or a lessor to require that they be named as additional insured to a policy. However, the policyholder should understand the endorsement and how it modifies their CGL policy before adding the endorsement.

What is an Additional Insured endorsement?

An additional insured endorsement allows a person or organization that would not normally be covered on a CGL policy to be added as an insured on the policy. The endorsement modifies the policy to afford general liability coverage to the additional insured.

Those requesting to be added as an additional insured generally see the endorsement as further protection should a claim be brought against them for damages caused by the policyholder. However, there are several additional insured endorsements, and whether the endorsement provides the coverage that the requester is actually looking for depends on the actual endorsement that is added.

What are the different types of additional insured endorsements?

The additional insured endorsement used most commonly today is the Additional Insured Endorsement CG 20 10. While this endorsement provides coverage to an additional insured for ongoing operations, the endorsement does not cover completed operations. Prior to 1985, the CG 20 10 included coverage for an additional insured “with respect to liability arising out of ‘your work,’” which encompassed both ongoing operations and completed operations. However, in 1985 the endorsement was changed and removed coverage for completed operations.

If coverage for completed operations is desired, the Additional Insured Endorsement CG 20 37 should also be added. This endorsement provides coverage for completed operations, but needs to be added along with the CG 20 10 endorsement if both ongoing and completed operations are to be covered.

Organizations who have the CG 20 10 11 85 endorsement (the endorsement used prior to 1985) added to their policy do not need to add the CG 20 37 to their policy because the pre-1985 endorsement covers both ongoing and completed operations.

Blanket Additional Insured Endorsements

Some insurance companies offer a blanket additional insured endorsement, which allows automatic coverage for an additional insured under certain conditions. The automatic coverage applies to additional insureds for whom the insured is performing work, and for whom the insured has a written agreement in place which requires additional insured status. While the blanket endorsement offers convenience, the requirement for a written contract needs to be understood by the policyholder and the person or organization being added as an additional insured. Should there be upstream parties, such as a general contractor that does not have a direct relationship or contract with a sub-contractor, there is also an additional form that can be added to cover the upstream party.

What else should you consider before adding an Additional Insured endorsement to your CGL policy?

When an additional insured is added, the person or organization named as an additional insured has access to the coverage provided by your policy. In other words, your policy limits could potentially be exhausted in the event that an additional insured seeks coverage for a claim under your policy.

Further, the policy could cover losses that the policyholder is not intending to cover. There have been documented cases of the additional insured endorsement being interpreted by courts to include coverage for damages that the were not caused by the negligence of the policyholder.

In conclusion, it is important to understand additional insured endorsements before requesting that one be added to your policy. Asking questions to determine what coverage is needed, considering the scope of coverage provided, and considering potential consequences prior to adding coverage will help you to be selective when adding an additional insured endorsement and manage your risk wisely.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

05 Jul

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5 Ways to Prepare Your Organization for OSHA Penalty Increases

July 5, 2016 | By |

Significant increases to OSHA fines will take effect on August 1, 2016 due to a new budget law signed by President Obama on November 2, 2015, which permits OSHA to increase citation fines up to 80%. Employers can prepare for the increases by ensuring that appropriate safety initiatives are in place to prevent injuries and OSHA violations.

Under the penalty increases proposed by OSHA, the following new penalty levels will apply to OSHA violations effective August 1, 2016:

Serious, Other than Serious, and Posting Violations-$12,471 per violation

Failure to Abate-$12,471 per day beyond the abatement day

Willful or Repeated Violations-$124,709 per violation

Employers can avoid the financial impact that the increased fines could have on their business by taking action now to ensure that controls and procedures are in place that are compliant with OSHA’s requirements. Here are 5 action steps that your business can take today to avoid future costly penalties:

1. Develop a written safety program with procedures that comply with OSHA regulations. OSHA offers several resources on their website (osha.gov) to ensure that safety programs comply with regulations.

2. Appoint a safety coordinator within your organization to oversee the safety program, engage with employees on safety topics and encourage safety suggestions and feedback from employees.

3. Educate employees by conducting OSHA compliance training. (http://osha.gov/Publications/osha2254.pdf) Check for understanding by requiring employees to demonstrate safety procedures. Additionally, document all training with employee sign-in sheets.

4. Inspect your business premises daily to identify hazards or potential OSHA violations. When hazards are identified, respond by taking appropriate action to ensure safety and OSHA compliance.

5. If your organization has had OSHA violations in the past, review the violations to be sure processes are in place to avoid future penalties.

While the increases to OSHA’s penalties are significant and could dramatically impact an organization’s bottom line, action steps can be taken now to prevent employee injuries and avoid OSHA penalties.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

27 Jun

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Why Your Business Needs a Continuity Plan and How to Prepare One

June 27, 2016 | By |

emergency-planA business continuity plan provides specific actions for a business to take when an unexpected event occurs that could potentially damage an organization’s financial health, reputation, or ability to compete in the market. According to a 2014 survey of midsize business conducted by The Hartford, while most companies have a business continuity plan in place, 33% of businesses have not documented their plan, and only 19% have tested their plan. These results indicate that most businesses are unprepared for a major unexpected event that could severely impact their bottom line and ability to recover after a disaster.

So, how does a business go about preparing a continuity plan? By breaking the process into manageable steps, and working on one portion of the plan at a time. While a continuity plan will look different for every organization, here is a 5 step process to developing a business continuity plan for your business to help you prepare for a disaster and recover quickly in the event that one occurs:

  1. Develop policy and organizational structure. Start by creating a business continuity plan purpose statement that details your reason for the plan and the objectives for the plan. Next, assemble a business continuity team within your organization and designate roles and responsibilities. Appoint a coordinator to lead the team and manage the plan.
  2. Conduct a business impact analysis. A business impact analysis helps to determine time-sensitive or critical business functions, and the resources needed to support them. Determine the people, places, suppliers, processes, and programs that are essential for your business to operate effectively.
  3. Identify major risks and assets for your organization. Some of the common risks faced by organizations today include natural disasters, malicious attacks, workplace violence, utility outage, system failure, fire, death of key employees, cyber attack, and mechanical failure. Assets that could be vulnerable to risk include people, property, supply chain, systems, equipment, information technology, business operations, reputation, regulatory requirements, contractual obligations, and environment.
  4. Determine and implement prevention and mitigation controls. Preventative measures help to prevent a disaster from happening in the first place. Some examples of preventative controls include installing fire and security alarms, using secure passwords and encryption, keeping business valuables in a secure location, and general housekeeping in the office to prevent injuries. Mitigation policies give direction for minimizing a loss that a business suffers and the interruption of business processes after an event. Mitigation controls should address emergency response, employee communication, public relations, and resource management.
  5. Prepare employees. Employees should understand their role in business continuity after a disaster. If an employee is expected to take action, they should be familiar with the plan prior to an event occurring. The plan should be tested to ensure that employees fully understand their role.
  6. Secure insurance to transfer risk. The risk of catastrophic events can be transferred through insurance. Talk with an insurance agent to discuss coverage that meets the exposures faced by your organization.
  7. Test the plan, review the plan and make changes as needed. Once the continuity plan has been developed, it should be tested prior to implementation. Once the plan is in place, it should be consistently monitored. The business environment is always changing, so it is essential to review the plan at least once per year. Additionally, the plan should be reviewed and changed as necessary when there is a change in staffing, processes, suppliers, or facilities.

By taking the time to develop a business continuity plan, you can prepare your organization for an unexpected event. Ultimately, your continuity plan could prevent disasters from occurring in the first place and help your business to recover more quickly should a disaster occur.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

20 Jun

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3 Major Differences Between a Bond and an Insurance Policy

June 20, 2016 | By |

Bonds are often required for a conContract Pictractor to obtain licensing or to meet the obligations of a contract. I find that there is often confusion on how bonds differ from insurance policies. While bonds are technically a form of insurance, there are significant differences between bonds and insurance policies and bonds should not be purchased in place of liability insurance. Here are 3 major differences between a bond and an insurance policy;

1. Parties involved in the contract. There are three parties involved in the bond contract. The first party is the company requesting the bond, referred to as the principal. The second party is the customer, referred to as the obligee. And the third party is the surety company. The obligee transfers the risk to the surety company that the principal will not fulfill their contractual duties.

In contrast, there are only two parties involved with an insurance policy; the insurance company and the business purchasing the coverage, the insured. When the insured causes bodily injury or property damage to a third party, the insurance company pays the damages.

2. Financial restoration after a loss. Losses are not expected to occur when a surety bond is issued. However, if a loss occurs, the principal is expected to fully restore the surety company for any financial loss incurred. Before a bond is issued, the underwriter requires proof that the principal has the financial means to reimburse the surety company should a loss occur. Thus, a bond acts like a line of credit for the principal.

On the other hand, an insurance policy does not require that the insured restore the insurance company after a loss occurs. The insured pays premiums in exchange for the coverage provided. The insured may be responsible for a deductible in the event of a loss, but does not have to reimburse the insurance company for the full loss incurred. The risk of financial loss is transferred from the insured to the insurance company.

3. Premiums and/or fees paid for the coverage. When a surety bond is issued, a premium or service fee is paid by the principal to the surety company. The service fee allows the principal to use the financial backing of the surety company. If there is a loss, the surety company pays for the loss, but requires the principal to reimburse all funds that have been paid out.

In contrast, a premium is paid by the insured to the insurance company for an insurance policy. In return, the insurance company promises to protect the insured from financial loss. The insurance company determines the premium charged for losses that are expected to occur based on the insured’s operations, characteristics, and history.

In summary, while bonds are useful for providing protection for a customer and may be required for some contracts, it is important to understand the key differences between a bond and an insurance policy.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

16 Nov

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5 Ways to Simplify Your Business Insurance Audits

November 16, 2015 | By |

Just hearing the word “audit” can cause some to cringe, but preparing for an insurance audit ahead of time can help to make the process much smoother and less stressful.

The purpose of an insurance audit is to verify payroll or revenue to confirm that the insurance policy is rated appropriately. When a policy is written, estimates for payroll and/or revenue are used to determine the annual premium. Many general liability policies and all workers’ compensation policies are audited. Other types of insurance policies can also be auditable, including excess liability policies and contractors’ equipment policies.

Here are 5 steps that you can take ahead of time to simplify your insurance audits:

1. Use clear bookkeeping processes and maintain accurate adn detailed records. Some of the records that an auditor might ask for include payroll journals, federal tax reports, and individual earnings records. Payroll journals should reveal monthly totals along with a breakdown of work performed by employees. Individual earnings records should include the type of work performed, the hiring date and the termination date.

2. Clarify classification codes used for rating. Policies are rated by classification codes, so it is essential to use correct classification codes. Rates can vary greatly by classification. For example, the rates for a clerical worker or salesperson are much lower than the rates for a carpenter. If an employee has more than one job duty, you may be able to use two classification codes depending on the state where you are located, however you must keep clear records on the hours devoted to each classification and the classification codes must be approved by the insurance company prior to starting the policy.

3. Understand how payroll is calculated. Generally, the payroll used for the audit is the total remuneration paid to an employee. There are some exclusions, so check with your agent, your state workers’ compensation agency or your insurance company to determine possible exclusions in your state. One example is overtime. You may be able to deduct pay that exceeds straight time for hours worked by an employee.

4. Notify your agent and insurance company of changes to your payroll. If your payroll changes during the policy term, talk with your agent to determine whether the policy should be endorsed to avoid unexpected premiums at the end of the policy term.

5. Verify coverage for sub-contractors. If you are using sub-contractors, collect a copy of their general liability and workers’ compensation policies prior to hiring them so that they are not included as employees in the audit.

In short, accurate records will help you to prepare for and simplify the insurance audit process and help you to avoid costly audit bills. By following the tips above, you will be well-prepared for your next audit.

If you would like to learn more, visit us at PioneerBusinessInsurance.com, or call us at 888-596-7242. At the Pioneer Business Insurance Agency we work hard at being accessible, helpful, and result-oriented. How can we put our expertise to work for you?