Insurance Legal Description Text

Kate

The Californian 2020 Q3 – WORKERS’ COMPENSATION EXECUTIVE ORDER UPDATE

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WORKERS’ COMPENSATION EXECUTIVE ORDER UPDATE

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

As you may recall, Governor Newsom signed an executive order on May 6, 2020  creating a temporary, rebuttable presumption that COVID-19 is work-related (industrial) for employees who meet the specific conditions below:

 

  • This Executive Order provides that COVID-19 cases for some employees will be presumed to be work-related (industrial) if certain conditions are met. This makes it easier for qualified employees to obtain workers’ compensation benefits because it shifts the burden onto the employer to prove that injury was not Fundamentally, if an employee worked on/after March 19, 2020 at the work location and direction of the employer and tested positive or was diagnosed by a medical doctor, the presumption will apply.

 

  • If the claim form (DWC-1) was filed on/after May 6, 2020, the employer has 30 days to investigate in order to try to challenge the presumption and deny the claim. Otherwise, the claim is presumed compensable. With that said, this presumption is temporary as well as rebuttable.  It only applies as long as the State of Emergency due to COVID-19 exists.  Right now, it is set to end 60 days from May 6, 2020 (about July 4, 2020).

 

  • Claims (DWC-1) filed after May 6, 2020 which show date(s) of employee’s COVID-19 diagnosis between March 19, 2020 and July 4, 2020 have a REDUCED investigation period of just 30 days, instead of the usual 90 days. The 30 days starts with the employee’s filing of the claim form (DWC-1). If a claim form for COVID-19 was filed before May 6, 2020, those claims are likely subject to the 90-day investigation period.

It is important to know that this presumption will cover claims of a COVID-19 diagnosis for employees working through July 4, 2020. Thereafter, the State Legislature and/or the Governor would have to pass a bill and/or extend the Executive Order to continue this rebuttable presumption after that date. 

 

It is past the July 5, 2020, what now?

Although the presumption expired on July 5, 2020, California Legislature is currently addressing three bills that could potentially extend the order. SB1159 aims to backdate the bill to cover claims filed after July 5 for an employee.  We will continue to monitor legislative updates. In the interim, new COVID-19 claims will again be addressed under previous workers’ compensation rules.

  • There is no automatic presumption for COVID-19 claims
  • We go back to a 90-day investigation period
  • Workers’ Compensation benefits will be provided according the Pre – Executive Order rules and regulations

Please note that all COVID-19 related claims are still exempt from the experience modification.  We will keep you posted on any updates.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Kate

The Californian 2020 Q2 – INSURANCE IMPLICATIONS OF RISKY CONTRACTS

INSURANCE IMPLICATIONS OF RISKY CONTRACTS

Josh Ring, El Dorado Insurance Agency, Inc.

The current economic situation has given rise to an increased number of security companies entertaining contracts that they would normally look to avoid.  The continued lack of new work, reduced hours at current job sites and slow-paying customers are forcing security company owners to explore additional sources of revenue in order to keep their companies afloat.  While I’m certainly not going to suggest that any firm allows themselves to go “belly up”, there are factors that need to be weighed when taking on additional (and potentially riskier) contracts.

First and foremost, make certain to verify that your insurance policy does not specifically exclude coverage for the type of work being entertained.  Most insurance policies for security companies have exclusions that deny the company coverage in occasions where certain work is being performed.  For instance, the most prevalent exclusion on policies is for “Bars, Nightclubs, Taverns & Similar Establishments”.  It is my experience that most company owners are aware of this exclusion and will look to avoid these contracts if the exclusion is found on their policy.  However, there may be additional exclusions that you should be aware of before entering into a work agreement.  If you are unsure, my advice in this situation is to speak with your insurance professional with regards to the coverage on your policy.  They will be well versed in the exclusions and should be able to advise if the contract you are entertaining would be covered in the event of a claim.

The second, and less obvious factor that should be considered is your overall client portfolio.  With respects to an insurance carrier, certain operations performed by a security contractor are considered riskier than others.  These operations may not be explicitly excluded by your policy but could have a negative impact on your underwriting at the time of renewal.  This negative impact could come in the form of increased premiums or non-renewal on the part of the carrier.  Additionally, and equally as important could be the deterioration of your loss ratio.  With riskier operations certainly comes the increased exposure to claims.  As we all know, when claims start to occur an insurance carrier will take a very hard look at the policyholder at the time of renewal to determine their profitability and pricing strategy for the coming year.  Again, I stress that engaging your insurance broker in this situation is extremely important and beneficial in both the short & long term.  Your broker will be able to offer insight as to what contracts might be best to avoid if possible so that your company maintains a “clean” profile as viewed by an insurance carrier.

 

At the end of the day, neither your insurance broker nor your carrier is on the frontlines working to keep their security company in business.  It is up to each individual company owner to decide what risks they are willing to take and accept the potential consequences of those choices.  However, by enlisting the expertise of your insurance professional, you will be able to make the most informed decision possible.

Josh Ring, CIC is the President of El Dorado Insurance Agency, Inc., a family-owned business specializing in custom insurance programs for the Security Industry since 1968.  Josh oversees the agency and its customers, along with coordinating the development of new insurance products and programs.  Josh graduated from The University of Texas McCombs School of Business with academic honors. He also holds a Certified Insurance Counselor (CIC) designation.  Josh lives in Katy, Texas with his wife and two children.  In his spare time, Josh loves to run, travel, and spend time with his family.

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Kate

The Californian 2020 Q1 – IMPROVING RISK MANAGEMENT NEEDED AS INSURANCE COSTS RISE

IMPROVING RISK MANAGEMENT NEEDED AS INSURANCE COSTS RISE

Tory Brownyard, Brownyard Group

Over the last decade the security industry has enjoyed what we in the insurance business call a “soft market.” That means underwriting guidelines loosen, making it easy to obtain coverage, and premiums decrease for many accounts. In fact, some security firms have been seeing lower insurance rates today than they had 15 years ago.

However, a rash of large legal settlements is resulting in the hardening of the security insurance market. That is, insurers are losing their appetite for some risk. This means they are instituting stricter underwriting guidelines for security firms, increasing rates and (perhaps) limiting coverage offered, especially to those with a history of severe or frequent claims. Firms with a troubled risk profile are likely to see substantial rate increases.

Large Settlements

Among the large legal settlements involving security professionals in the last 10 years are several in California. In a case dating from 2006 involving a teenager who was disabled following a shooting in a Fontana public housing complex, the security firm patrolling the area was held partially liable for a $55 million settlement. The settlement was made in 2013 — meaning the case was in costly litigation for years.

In 2010, an immigrant house painter was brutally beaten by a security guard in a Los Angeles bar and left with brain damage. Three years later, the security firm was held directly liable for negligent hiring and training of an untrained, unlicensed guard, and a jury awarded the victim $58 million for pain, suffering and medical expenses.

While these cases are infrequent and do not follow a distinct pattern in terms of setting or victims, they are having wide-ranging consequences for the security industry and the role of security officers, as well as for the security insurance market. Security firms are being implicated more often in very costly suits. While frequency of claims for security firms is generally not an issue, the increase in the severity of the claims being brought against firms is a cause of concern for insurers. Plus, the increased severity that we’ve witnessed over the last decade not only affects the security firms involved in claims, but the industry as a whole.

The increase in frequency of active shooter incidents is also having an impact on the risk profile of security firms. Since 1982, California has had the highest number of active shooter incidents of any state, including the most in 2018. Security officers, which are often the first line of defense in these incidents, can be the target of claims that allege they failed to prevent the tragedy.

Improving Risk Profiles

While individual security firms may have little control over these industry-wide trends, they can improve their own risk profile and limit their liability in the event of an incident, thus helping them minimize rate increases and preventing denial of coverage by a trusted insurance partner.

As I discussed in an article in The Californian last year, there are specific steps security firms can take to reduce their exposure:

  • Limit liability with carefully worded contracts. Some security services contracts may transfer a great deal of liability to a security firm, and that can be a problem when there is a claim. Instead, look for language that will limit liability to the security firm’s own negligence and not assume liability for a client’s negligence.
  • Make sure contracts clearly state the duties and responsibilities of the security officers. This can help limit liability when sorting out the details after an incident.
  • Make hiring and training a priority. Ensure security officers have an appropriate background for their posts. For example, insurers want officers with law enforcement experience at armed posts. In addition, make sure officers are trained for the specific settings in which they work. Underwriters like to see this type of situational training.
  • Consider the different risks of different industries. When evaluating potential risk, underwriters look carefully at whether the industry is high-risk. These are posts that have a great deal of exposure to the public, large crowds or criminal activity, as well as active shooter risk.

These are just some of the issues to consider when discussing your insurance policy with your insurance broker. With changes in today’s insurance market, security firms will be well served by proactive risk management and loss control — efforts that may help secure insurance and limit premium increases.

 

Tory Brownyard, CPCU, is president of Brownyard Group (www.brownyard.com), an insurance program administrator with specialty programs for select industry groups. In addition to his responsibilities as President, he currently spearheads the Brownguard security guard insurance program. Tory is a highly-regarded subject matter expert in the field of Security insurance and has contributed to industry publications such as Security Magazine and has been featured regularly in leading insurance publications. He can be contacted at TBrownyard@brownyard.com.

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Kate

The Californian 2019 Q4 – WORKPLACE VIOLENT ACT – ACTIVE SHOOTER AND VIOLENT ACT COVERAGE

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WORKPLACE VIOLENT ACT – ACTIVE SHOOTER AND VIOLENT ACT COVERAGE

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

Personally, I want to say, “Thank you”, to the CALSAGA Team for putting on another wonderful conference! It is always great to see everyone and meet the new Members and guests. The Security Industry is continuing to change and CALSAGA does an excellent job keeping the Members updated on those changes that affect our businesses.

Did you know that workplace violence is the second leading cause of workplace fatalities?  With incidents increasing within the last three years, it has sadly become a sign of the times. Do you and your clients know that Active Shooter and Violent Act Insurance Coverage is available to assist in mitigating potential revenue loss and liability?

As the threat of violence emerges, business owners are reviewing their general liability insurance policies and finding that bodily injury or property damage caused by an active shooter may or may not be covered.

Standard coverage may not apply to the crisis management as a result of the event. Personal attacks against customers or other third parties may not be covered by general liability insurance. Additionally, if law enforcement determines your business should remain closed after an incident, your policy may not cover loss of business income.

This policy includes coverage for Business Interruption, Third Party Bodily Injury Liability, Property Damage and Incident Response Expenses.  While most people feel that GL covers some of this exposure, be aware of the following:

  • Intent – Current General Liability (GL) applications do not ask questions regarding this exposure and therefore are not underwriting for it.  The original intent of GL does not include coverage for this type of exposure.
  • Foreseeability – GL can exclude/deny coverage for events the Insured reasonably could have foreseen.  This can include losses where employees have a history of violent behavior and no action was taken to prevent an event, or security measures that could have been taken that were not, etc.
  • Crisis Response – GL will only respond if there is a lawsuit filed and NOT offer proactive crisis management services.  The Workplace Violent Act policy offers Incident Response Expenses (IREs) that include crisis response and extra expense as well as assistance and guidance during a crisis event to help mitigate and/or prevent demands and lawsuits after the crisis.
  • Terrorism – While GL policies offer TRIA to be purchased, there is still no coverage for uncertified violent act or terror events.

Policy definitions and coverage triggers:

Incident means Workplace Violent Act Event, Workplace Violent Act Threat Event, Workplace Violent Act Against

Offsite Employee Event or Stalking Event. Multiple Incidents involving the same Violent Actor(s) will be considered one Incident. In order for Workplace Violent Threat Event(s) or Stalking Event(s) to be considered for coverage, they must be reported to the appropriate government authorities as soon as practicable.

Workplace Violent Act Event means the use of a Deadly Weapon to cause Bodily Injury at a Covered Location.

Deadly Weapon means any firearm, vehicle or other device, instrument, material, or substance that, from the manner in which it is used or is intended to be used, is calculated to or likely to produce death or physical injury.

Active Shooter and Violent Act Insurance coverage may be something that you or your clients may be interested in reviewing. Specifically, if they are a school, religious establishment, airport, hospital, shopping center……anywhere. Click here to view information on the coverage. An application is included, if you would like to obtain a quote.

Please let us know if you have any questions or if we can be of assistance.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

Continue reading the 2019 Q4 edition of The Californian

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Kate

The Californian 2019 Q3 – PREPARING FOR YOUR INSURANCE AUDIT

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PREPARING FOR YOUR INSURANCE AUDIT

Nick Langer, Turner Surety & Insurance Brokerage, Inc.

While workers compensation rates continue to decrease, one thing remains the same; final audits at the end of your policy term can be arduous. Fortunately, they do not have to be. Navigating and fully understanding the workers compensation system in California is difficult and most businesses do not have the time or resources to invest in having an in-house expert. With tight margins and ever-increasing competition, Private Patrol Operators simply cannot afford to be misinformed.

The first step in preparing for your final audit starts with having a better understanding of the law, your obligations as a California employer and rules set forth by the Workers Compensation Insurance Rating Bureau (WCIRB). Included below are 5 facts about workers compensation that every California employer should know.

Workers Compensation – The Facts:

  • Under California Labor Code Section 3700, all employers with one or more employee must provide workers’ compensation benefits to their employees.
  • California Corporate Officers & Managing Members of an LLC can be excluded if they own at least ten percent (10%) of the issued and outstanding stock.
  • Worker’s Compensation premiums are based upon “annual remuneration” of all employees. Annual remuneration is not exclusive to payroll. Annual remuneration includes:

Gross wages                     Salaries                                  Commissions

All bonuses                                  Most profit sharing   Vacation pay

Holiday & sick pay                     Automobile allowances                   

Overtime (“straight time” portion only)

  • The Workers Compensation Insurance Rating Bureau develops and maintains the Standard Classification System. (Class Codes)
  • The workers’ compensation experience rating system is a merit rating system intended to provide employers a direct financial incentive to reduce work-related accidents. The California Workers’ Compensation Rating Insurance Bureau (WCIRB) calculates an Experience Modification Rate (EMR) for every qualifying employer.
    • High EMR’s (over a 1.00) will increase your workers’ compensation premiums
    • Low EMR’s (below a 1.00) will decrease your worker’s compensation premiums

 

Preparing For Your Final Audit

Workers’ Compensation policies are written with premiums based upon your company’s payroll (remuneration) estimate at the beginning of each policy period. At the end of the policy period, your insurer will audit your payroll records to obtain your actual payroll numbers. This procedure is required for 2 reasons:

  1. To compare your actual payroll with your estimated payroll. Your premium is then adjusted accordingly.
  2. To submit your actual payroll data along with your actual losses during the policy term to the WCIRB. This allows the rating bureau to then calculate your experience modification rate (EMR).

Your insurer has the right to audit payroll records at any time. Failure to comply with an insurance company’s audit can lead to the cancellation or non-renewal of your policy, and insurers can use all legal means at their disposal to collect outstanding premiums.  In addition, the WCIRB can promulgate (calculate) your experience modification rate using reported loss data and excluding unaudited payroll, resulting in an increased experience modification rate. It is important to be aware that the deliberate under-reporting of payroll or misclassification of payroll is considered insurance fraud and can be prosecuted to the fullest extent of the law.

Here is the type of information you may be asked to provide:

  • Accounting ledger.
  • Tax forms – Specifically, Form 941 and 944, Employers Federal Tax Return, and State Payroll Tax records (EDD – DE9/DE9).
  • Records of cash disbursements.
  • Payments for services provided by independent contractors. The auditor needs to verify that these workers are not your employees.
  • Payments for services provided by subcontractors.
  • Certificates of insurance for each subcontractor you hired
  • W-2 and 1099 forms.
  • Job description for each worker. Make sure the description accurately describes the workers’ duties.
  • Description of your business operations.
  • Payroll records by classification and access to your payroll system, employee time cards and all electronic time keeping systems for the term of the policy. The auditor needs to verify all sources of remuneration provided to each worker (salary, bonuses, etc.).
  • Certificates of insurance for every OCIP or CCIP you were enrolled in during your policy term.

Understanding what is expected of you will help to expedite the process and minimize confusion at the time of your final audit. Coordinating with your Insurance Broker and CPA prior to your final audit can help to eliminate costly mistakes.

Nick Langer is a Senior Risk Advisor at TSIB with more than 15 years of property & casualty broker experience. He specializes in the Construction, Energy and Security Industries. Nick enjoys the challenge of finding solutions to his client’s unique needs and is committed to learning the intricacies of each client’s business operations.

Prior to joining TSIB Nick had his own insurance agency that specialized in both personal and commercial lines of insurance. After 7 successful years of growing his property and casualty agency he joined Tolman & Wiker Insurance Services, LLC.

Nick regularly presents at trade associations on risk management topics including: Workers’ Compensation, Claims Management, Risk Management, Contractual Risk Transfer and Employment Practices Liability.

Nick is committed to improving the lives and success of his clients for the benefit of the community through his various roles and leadership positions. He has served as the Insurance Advisor to the Board of Directors of The California Association of Licensed Security Agencies, Guards and Associates (CALSAGA). He is President of The Bakersfield Young Professionals in Energy (YPE), a member of the Associated Builders & Contractors (ABC), and the former Government Affairs Committee Chair for the Central California chapter. Nick is a member of the Associated General Contractors (AGC) and the American Society of Safety Engineers (ASSE).

Nick has Bachelor of Science in Business Economics from University of California, Santa Barbara. Nick and his wife have three children and three rescue dogs. In his spare time, Nick is an avid fisherman and enjoys golfing, hiking and fitness training.

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Kate

The Californian 2019 Q3 – WORK OPPORTUNITY TAX CREDITS

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WORK OPPORTUNITY TAX CREDITS 

Kwantek Team

 

In the Security Industry, it’s common to hire employees that would qualify for Work Opportunity Tax Credits (WOTC). If your company has significant annual hiring volume, using these credits can help deduct tens of thousands of dollars from taxable income.

WOTC is a Federal Tax Credit available to most employers who hire and retain veterans and individuals from other groups with barriers to employment. Employers are eligible to reduce their federal income tax liability by an average of $1,000 per employee, with a credit potential up to $9,600 for some employees.

Who is Eligible for WOTC?

WOTC is available for employers that hire veterans and individuals from other groups with barriers to employment. This includes:

  • Veterans – unemployed and other qualified
  • Temporary Assistance for Needy Families (TANF) Recipients
  • SNAP (food stamps) Recipients
  • Ex-Felons
  • Supplemental Security Income Recipients

This represents a massive opportunity for contract security companies to reduce their taxable income by thousands – and even hundreds of thousands of dollars. Let’s take a look at an example of a Kwantek client:

  • 665 New Hires were WOTC Eligible
  • 309 Received WOTC Certifications
  • $904.22 average Tax Credit earned per certified employee
  • $279,404.09 real Tax Credit to Employer

If you’re hiring veterans, ex-felons, or low-income employees, you could stand to deduct thousands of dollars each year from your taxes!

Click here to download a full report detailing everything you need to know about WOTC.

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Kate

The Californian 2019 Q2 – FIVE QUESTIONS INSURANCE UNDERWRITERS ASK ABOUT SECURITY COMPANIES

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FIVE QUESTIONS INSURANCE UNDERWRITERS ASK ABOUT SECURITY COMPANIES

Tory Brownyard, Brownyard Group

Whether we’re insuring a family mini-van or an oil company operating in a hostile environment, insurance underwriters carefully evaluate the risks and exposures facing a particular person or company. In commercial underwriting, we consider a company’s loss experience, risk management practices and other factors in determining whether or not we can accept the risk and what kind of coverage it requires.

For the security industry, there are several questions we ask ourselves about a company and its application. Here, I review some of these questions and try to shine a light on insurance coverage for security firms based on my experience as an insurance underwriter for security risks.

What industries does the firm work with?

Many security firms specialize in serving one industry or environment, whether that’s government contracts, retail stores or large events. An application for insurance will often ask detailed questions on this topic.

This helps underwriters determine if a firm is a “low-profile” or “high-profile” risk. A high-profile security risk assigns officers to posts that have a great deal of exposure to the public, large crowds or criminal activity. Unfortunately, there is another factor we must take into consideration when looking at industries served by a firm: active shooter risk. Some environments have been susceptible to active shooter incidents, such as hospitals and churches.

Low-profile risks, like those serving industrial warehouses, government contracts and office buildings, tend to go through the underwriting process quickly. Other factors determine how the account may be priced.

Is the work armed or unarmed?

The debate over staffing armed guards in schools has been playing out in the media over the past several years. As you well know, the question of providing armed guards to a particular post requires a complicated answer. That is why this is an important question to many underwriters. In my work, I consider whether or not a particular environment could necessitate an armed officer. For example, some government contracts may require and warrant staffing armed security officers.

We will also consider the person behind the firearm. From an underwriting perspective, an ideal armed security officer has been properly screened, carries the appropriate licenses and has extensive firearms training. For that reason, we often consider former or off-duty law enforcement professionals to be qualified armed security professionals. They are more likely to have extensive training and experience handling firearms.

Who does the firm hire and how are they trained?

Rules about hiring and training security officers vary from state to state. Of course, an insurance underwriter will expect firms applying for coverage to follow state rules and regulations. We also expect firms to subject potential hires to the usual criminal background check and to ensure they are permitted to carry a firearm, if applicable. However, we may also consider whether or not the company tends to hire officers with a background appropriate for their posts. As mentioned above, from an underwriting perspective, people with law enforcement experience seem like the safest bet for armed posts.

We also take pay scale into account. Are most of the guards earning around minimum wage? Are they towards the top of the industry pay scale? The answers to these questions can tell underwriters a story about the experience level of the firm’s workforce. Though some officers will be entry-level, we would like to see these early-career employees balanced with experienced, trained professionals.

Underwriters may also ask about and consider the type of training provided to security officers. We will consider if it prepares them for the settings in which they work. An officer posted to a hospital emergency room may be served by training that can help them deescalate fights in that sort of environment. In general, underwriters like to see situational training to hone skills needed for different environments.

Lately, we have also been reviewing active shooter trainings. A well-planned active shooter training program and response protocol can help a security company minimize liability in the event of an active shooter claim.

What is the “loss experience” of the risk?

When we talk about a firm’s “loss experience,” we are talking about the number of claims a security firm has incurred in recent years and the nature of those claims. Overall, the security industry has an infrequent but severe loss experience; that is, security firms are not often involved in incidents or litigation that cause an insurance claim, but when they are, those claims involve large settlements or expenses.

Every firm will have a large claim from time to time, but low-profile firms have low claims frequency. A firm with three or more losses a year may have a problem with its screening and training practices. This is particularly true if those losses result from actions like a security officer assaulting someone. When such patterns emerge, an insurer is more likely to decline to write an account.

What do their contracts look like?

Insurance underwriters are not lawyers, so we cannot provide advice on the finer details of contract law. However, contracts transfer a great deal of liability, so we do often discuss the implications of certain types of contract language with our insureds and potential clients. Some security services contracts will transfer all liability to the security firm—which puts the firm in a difficult position. We prefer language that will limit the insured’s liability to their own negligence and not assume liability for their client’s negligence. It is also important that the contract clearly states the duties and responsibilities of the security officers.

Underwriting guidelines differ from insurer to insurer, as every insurer has a slightly different risk appetite. In general, admitted insurers have less risk appetite, while insurers on the non-admitted market—whose customers are not subject to the protection of state regulations—are able to accept riskier accounts.

If you have further questions about how your insurance policy is underwritten and priced, your insurance broker is a great resource.

Tory Brownyard, CPCU, is president of Brownyard Group (www.brownyard.com), an insurance program administrator with specialty programs for select industry groups. In addition to his responsibilities as President, he currently spearheads the Brownguard security guard insurance program. Tory is a highly-regarded subject matter expert in the field of Security insurance and has contributed to industry publications such as Security Magazine and has been featured regularly in leading insurance publications. He can be contacted atTBrownyard@brownyard.com.

 

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Kate

The Californian 2019 Q2 – HEAT ILLNESS PREVENTION

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HEAT ILLNESS PREVENTION

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

It’s that time of the year….not post tax season… Heat Illness Prevention season!

With the change in seasons comes the warmer weather and it is imperative (And required by Cal/OSHA) that all employers train their supervisors and employees on heat illness prevention. The safety of your employees is the responsibility of the employer and if an unfortunate event does occur, Cal/OSHA may  be investigating the event. If so, they will be asking if you have your Heat Illness Prevention Program in place. The investigation will include verification that you have provided training to your supervisors and employees.

A Cal/OSHA study identified the key role that employers play in preventing worker fatalities due to heat illness. The findings highlighted the value of training supervisors so that they can make the fullest use of their power to control safety on the job.

California Code of Regulations, Title 8, Section 3395 Heat Illness Prevention requires all employers to have a Heat Illness Prevention Program which includes the following:

Provide fresh/potable drinking water

Employers must provide employees with fresh, pure, and suitably cool water, free of charge. Enough water must be provided for each employee to drink at least one quart, or four 8-ounce glasses, per hour and the water must be located as close as practicable to the work area. Employers are also required to encourage employees to drink water frequently

Provide access to shade

When temperatures exceed 80 degrees, employees must be provided shade at all times in an area that is ventilated, cooled, or open to air and that is as close as practicable to the work area. There must be sufficient space provided in the shade to accommodate all employees taking rest. When temperatures do not exceed 80 degrees, employees must be provided timely access to shade upon request. Employees should be allowed and encouraged to take preventative cool-down rest as needed, for at least 5 minutes per rest needed.

Have high heat procedures in place

High heat procedures are required of agricultural employers when temperatures exceed 95 degrees. The procedures must provide for the maintenance of effective communication with supervisors at all times, observance of employees for symptoms of heat illness, procedures for calling for emergency medical services, reminders for employees to drink water, pre-shift meetings to review heat procedures and the encouragement of employees to drink plenty of water and take preventative cool-down rest as needed.

Agricultural employers must additionally ensure employees take, at a minimum, one 10-minute preventative cool-down rest period every two hours in periods of high heat.

Allow for acclimatization

New employees or those newly assigned to a high heat area must be closely observed for the first 14 days of their assignment. All employees must be observed for signs of heat illness during heat waves. A “heat wave” is any day where the temperature predicted is at least 80 degrees and 10 degrees higher than the average high daily temperature the preceding 5 days.

Train all employees regarding heat illness prevention

Employees must be trained regarding the risk factors of heat illness and the employers’ procedures and obligations for complying with the Cal/OSHA requirements for heat illness prevention. Supervisors must additionally be trained regarding their obligations under the heat illness prevention plan and how to monitor weather reports and how to respond to heat warnings.

Have emergency response procedures

Employers must have sufficient emergency response procedures to ensure employees exhibiting signs of heat illness are monitored and emergency medical services are called if necessary.

Have a Heat Illness Prevention Plan

Employers must have a written heat illness prevention plan that includes, at a minimum, the procedures for access to shade and water, high heat procedures, emergency response procedures, and acclimatization methods and procedures.

For your reference, linked is a sample of a Heat Illness Prevention Plan.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Kate

The Californian 2019 Q1 – SAFETY & THE IMPORTANCE OF ACCIDENT INVESTIGATIONS

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SAFETY & THE IMPORTANCE OF ACCIDENT INVESTIGATIONS

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

At the beginning of each year, I always reflect back on the prior year to see where I could have improved and identify which area of the operations need the most attention. In doing so, safety always comes to mind, because it involves all operations and has a significant effect on the overall efficiency and productivity on the business of my clients. Safety is a process that always needs to be updated and modified to maintain a safe workplace for your employees and others. This reminded me of accident investigations and how important they are in the safety process.

All accidents should be investigated and it’s for one simple reason, to stop them from happening again. This may sound quite basic but let’s put it into reality, the main purpose of an investigation is to identify the causation factors and then identify any preventative or corrective action to prevent reoccurrence.

There are many other reasons for investigating accidents including legal litigation, insurance claims, workers compensation, company reputation and sometimes contractual requirements.

Please understand and remember that any investigation has certain deliverables and expected outcomes. This is why we need to continually assess and evaluate safety policies and procedures throughout the investigation, so that we can proceed down the appropriate path.

To refresh your memory, the following are the basic stages in an accident investigation:

STAGES IN AN INVESTIGATION

  • OBTAIN FACTS
  • DETERMINE THE CAUSES
  • DETERMINE THE CHANGES NEEDED
  • RECORD THE FINDINGS
  • COMMUNICATE THE FINDINGS
  • REVIEW ACTION

 

OBTAIN THE FACTS

Establishing what is relevant and what is not can be time

consuming. However, this information can be obtained by:

  • Inspecting the immediate scene and equipment
  • Interviewing the person directly involved with the accident
  • Interviewing witnesses to the accident
  • Reviewing procedures and training

 

Inspecting the immediate scene and equipment:

The accident scene should be inspected as soon as possible

after the accident. Particular attention should be given to

the following to see if any of them had a bearing on the

accident potential:

 

  • Positions of people
  • Any personal protective equipment
  • Tools and equipment
  • Orderliness/tidiness
  • Procedures

Wherever appropriate, photographs and/or sketches should be

taken of the scene. This is of particular importance where

there is a likelihood of the scene being disturbed – e.g. to

make the area safe.

 

Interviewing:

Ideally this should be done in familiar surroundings so as

not to make the person being interviewed feel uncomfortable.

If the person is not too seriously injured, then the accident

site is ideal as the person can explain what happened.

Remember this should be an interview to determine the facts

not an interrogation. Witnesses should be interviewed one at

a time.

 

Reviewing procedures and training:

The work procedures set out in appropriate guidance and any

risk assessments should examined to see if they existed and

were adequate, if they we were understood and followed.

It is also important to establish:

 

  • Any training received relevant to the accident
  • Any past incidents/accidents
  • Any risk assessments in relation to that particular

activity to see if any weaknesses have been previously identified.

 

Determine the causes:

After all the facts have been ascertained the causes can be

examined.

 

Obvious causes: The obvious causes are easy to find.

They are brought about by an unsafe act or condition. Unsafe

acts usually stem from poor safety attitudes and indicate a

lack of proper training or information.

 

Root Causes: These are personal or job factors that are

brought about by failures in organization and the

management’s safety program. This can include factors such

as;

  • Lack of supervision or discipline
  • Lack of training
  • Lack of management awareness

Determine what changes are needed

The purpose the investigation is to prevent a reoccurrence.

To do this some practical measures must be recommended and

carried out that will demonstrate a commitment to reduce

this identified risk. The remedial action may be short and

/or long term and may involve changes to the physical

environment – e.g. putting in place new guarding on

machinery – and/or procedural changes – ensuring an adequate

training program.

 

Record findings

The findings of every accident investigation must be

recorded in a systematic way to enable the report to be read

by the appropriate people who are responsible for reviewing

and implementing necessary changes. It also provides a

historical record of the accident that may be useful in the

future.

 

Communicate findings

Good communication is a very important part of the safety

effort. Information of an accident and remedial actions

should be passed to all relevant staff who may encounter

similar incidents.

 

Review action

Where action has been implemented as a means of reducing the

risk of an accident reoccurring, those actions must be

periodically reviewed to ensure that they remain

appropriate.

 

I have included a Sample Accident Investigation Form for your review. There are many different types of investigation forms available.

Please feel free to call me if you have any questions and have a great 2019!

Click here to view a Sample Accident Investigation Form

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Kate

The Californian 2019 Q1 – INSURANCE, TERRORISM & THE TERRORISM RISK INSURANCE ACT (TRIA)

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INSURANCE, TERRORISM & THE TERRORISM RISK INSURANCE ACT (TRIA)

Nick Langer, Turner Surety & Insurance Brokerage, Inc.

First passed into law in 2002, the Terrorism Risk Insurance Act (TRIA) requires commercial insurers to make terrorism insurance coverage available. Since then TRIA has established a federal backstop program, providing the necessary stability to the private terrorism risk insurance market by guaranteeing both the availability and affordability of terrorism insurance coverage for U.S. commercial properties and businesses.

The initial intent of TRIA was to provide a temporary federal backstop program that would allow the economy to recover following the 9/11 attacks. While the reinsurance industry has become increasingly willing to cover terrorism risks over the years, the private market still cannot assume all the risk alone.

On January 12, 2015, President Obama signed H.R. 26, the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015) into law, which extends the federal backstop program for an additional six years through December 31, 2020. As was the case with the prior reauthorization in 2007, TRIPRA 2015 calls for new structural changes to be implemented, which reduces the federal role in the program.

Similar to the TRIPRA 2007 program, TRIPRA 2015 requires certain criteria to have been met before federal coverage under the program begins. First, Property & Casualty insurance losses resulting from a terrorism-linked attack must meet the minimum damage certification level of USD 5 million. If losses are expected to meet this minimum threshold, then the event must also be officially certified as an “act of terrorism.” This certification is determined by the U.S. Secretary of the Treasury in concurrence with the Attorney General of the United States and—new under TRIPRA 2015—the U.S. Secretary of Homeland Security. As an example, insured losses resulting from the Boston Marathon bombing were not expected to meet this minimum threshold, and the event has not been certified as an act of terrorism—even though President Obama referred to it as an act of terrorism during a speech he gave soon afterward. The certification requirement can be frustrating for policyholders, who are left wondering when or if their claims will be covered.

If an act of terrorism has been officially certified, then compensation under the program will still not begin until aggregate insured losses in a calendar year reach the “program trigger.” Under TRIPRA 2015, the program trigger will gradually be raised each year from USD 100 million in 2015 to USD 200 million by 2020. The increase to the program trigger is considered to be one of the most substantial changes to the program and aims to transfer more of the risk to the private insurance market. Some argue that this may negatively impact the solvency of small, insufficiently diversified insurers who are not well positioned to absorb losses up to this level.

Once all the initial criteria for federal coverage have been met, an insurer who incurs losses resulting from a certified act of terrorism is required to first cover a portion of the losses—the insurer deductible. The amount of each individual insurer’s deductible is calculated as 20% of the insurer’s direct earned premiums in TRIPRA-eligible lines of business for the previous calendar year. For losses in excess of the insurer deductible, each insurer is also required to cover a pro-rata share of the losses, or copayment, with the federal government providing compensation for the remaining losses. Under TRIPRA 2015, the insurer copay will gradually increase each year from 15% ultimately to 20%.

The annual cap on liability also still applies under TRIPRA 2015, which means that no federal or private insurer payments are compensated for any portion of aggregate industry insured losses exceeding USD 100 billion. TRIPRA 2015 also increases the industry annual aggregate retention from USD 29.5 billion to USD 37.5 billion in 2019, the fifth and penultimate year of the program. In 2020, the final year of TRIPRA 2015, the retention will rise to an amount equal to the average of all participating insurers’ deductibles over the previous three program years. The Congressional Budget Office (CBO) has estimated that this amount could be as much as USD 50 billion.

If you have been involved in the process of securing insurance for your business, then you have received some version of a TRIA Disclosure giving you the option to “Accept” or “Reject” coverage for acts of terrorism. To better understand this coverage, it is important to understand the difference between “Certified Acts of Terrorism” and “Noncertified Acts of Terrorism.”

A Certified Act of Terrorism is eligible for coverage under TRIA. Insurance carriers paying claims in response to a certified act of terrorism will be reimbursed by the federal government. An act of terrorism is certified by the Secretary of Treasury and must meet the following criteria:

  1. Be a violent act or an act that is dangerous to human life, property, or infrastructure;
  2. Cause damage within the United States or other area of U.S. sovereignty
  3. Be committed as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the U.S. government by coercion; and
  4. Produce property-casualty insurance losses in excess of $5 million.

A Non Certified Act of Terrorism is simply that… an act of terror that is not certified by the Secretary of Treasury and therefore does not trigger the federal reimbursement provisions of the Terrorism Risk Insurance Act (TRIA). As discussed earlier, TRIA mandates that commercial insurers offer coverage for “certified acts of terrorism,” however they are free to exclude (or cover) “noncertified acts of terrorism.”

 

As you can see there are many moving parts of TRIA and thus far the claims process remains untested. Since TRIA is a backstop, in essence a federal reinsurance program for Insurance carriers, it is likely that carriers will be measurably slower in the adjusting of claims should an act of terrorism occur. Couple that with the fact that the act itself expires December 31, 2020, and the federal government looks to diminish their role as reinsurer to the carriers there simply are no guarantees as to the future.

Nick Langer is a Senior Risk Advisor at TSIB with more than 15 years of property & casualty broker experience. He specializes in the Construction, Energy and Security Industries. Nick enjoys the challenge of finding solutions to his client’s unique needs and is committed to learning the intricacies of each client’s business operations.

Prior to joining TSIB Nick had his own insurance agency that specialized in both personal and commercial lines of insurance. After 7 successful years of growing his property and casualty agency he joined Tolman & Wiker Insurance Services, LLC.

Nick regularly presents at trade associations on risk management topics including: Workers’ Compensation, Claims Management, Risk Management, Contractual Risk Transfer and Employment Practices Liability.

Nick is committed to improving the lives and success of his clients for the benefit of the community through his various roles and leadership positions. He has served as the Insurance Advisor to the Board of Directors of The California Association of Licensed Security Agencies, Guards and Associates (CALSAGA). He is President of The Bakersfield Young Professionals in Energy (YPE), a member of the Associated Builders & Contractors (ABC), and the former Government Affairs Committee Chair for the Central California chapter. Nick is a member of the Associated General Contractors (AGC) and the American Society of Safety Engineers (ASSE).

Nick has Bachelor of Science in Business Economics from University of California, Santa Barbara. Nick and his wife have three children and three rescue dogs. In his spare time, Nick is an avid fisherman and enjoys golfing, hiking and fitness training.

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