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RESIDENTIAL HOME LEAK CLAIMS FLOODING COURTS.

By Construction Insurance Bulletin

In the residential-construction industry, plaintiffs’ attorneys keep coming up with new creative ideas for class-action lawsuits – a shift from litigation by individual homeowners to more inclusive claims, such as the Chinese drywall class-action suit settled last year for $80 million.

More and more of these Construction Defect claims by developers and builders, often filed in plaintiff-friendly jurisdictions such as Southern California, allege potential water damage from faulty pipe fittings and minor leakages in homes. For example, Karen Rice, vice president of construction claims at XL Group North America’s Los Angeles office, says that although fewer homes have been built in this region during the past several years, XL hasn’t seen a reduction in residential water leak litigation so far. She adds that plaintiffs are filing leakage suits within an average of three to five years, rather than six or seven years, “probably because of the [ailing] economy.”

According to Rice, “these are pinhole, minute leaks, causing some water damage; there really isn’t any water damage that we can tell.” Thomas Varney, risk-consulting manager in the Americas for Allianz, points out that such leaks often occur because a worker failed to tighten, cap, or complete a connection to the plumbing or sprinkler system properly – often in an area that’s not visible, or on a higher floor that might have a significant amount of water.

The best way to help protect your business against these types of claims is to set, and enforce, comprehensive and effective safety practices, guidelines, and criteria in the workplace.

Our Construction insurance specialists would be happy to review your safety program. Feel free to get in touch with us at any time.

CONSTRUCTION SAFETY: THE POWER OF ‘THANKS’

By Construction Insurance Bulletin

In the construction world, we’re often quick to reprimand our workers about safety violations. Such phrases as “Hey, put your helmet on!”, “Seriously, do you really think this is a good idea?” and “Get off that ladder now!” come to mind. All too seldom, do we say, “Thanks. You’re doing a great job in keeping the site safe!”

As you walk your work sites or wander the shop, it’s important to search out potential hazards and people who are not following what’s expected. However, don’t forget to recognize and acknowledge the workers who are doing their jobs right. When you recognize the power of thanking those who do well, their peers pay attention. That’s the reason why merit badges work.

Whether you’re a supervisor, foreman, or project manager, your job is to encourage safe behavior by motivating – not threatening – your workers as often as possible. Showing gratitude goes a long way in forming your crew and your friends. Take the time, and you’ll soon be surrounded by people who want to work for you. When you recognize this, you will understand the power of thanks.

Without trust, there’s little chance of success in any business – including yours. Your role is to help your workers stay out of trouble and eliminate acts and conditions on the job that can harm them. Whenever possible, it’s better to work with them, rather than acting as an obstacle.

Help your construction crews understand the hazards of the work they do and how to get them corrected. Establish a level of trust, and say “Thanks!” more often than “Stop!”

Remember, you catch more flies with honey than vinegar.

THE IMPORTANCE OF TESTING EMPLOYEES

By Your Employee Matters

Here’s a fact: Half of all employees test better than the other half! My question is, which half do you have?

Testing job applicants and employees is one of the favorite topics in my CEO and HR workshops. Because most companies don’t do appropriate testing, those that do enjoy a significant advantage. I like to begin the subject with a story. Years ago, as I was quitting my litigation practice, a legal secretary (we’ll call Sue) came into my office and wanted to sue the firm she had been working for. The fact that a law firm could be sued by one of its employees came as no surprise. Lawyers get sued by their employees more than just about anyone else – and we rely on lawyers’ advice so we don’t get sued! A little Catch-22 in the system, you might say.

To keep the story short, it turns out this legal secretary had a steady job at neighboring law firm, working for a partner for 15 years. At the same time, a litigation partner at another firm lost his legal secretary with only last-minute notice. He put the word out on the grapevine that he was looking for a replacement, and that’s where Sue met up with him. After meeting for a pleasant lunch, the attorney figured that she had 15 years of experience doing the very job he was hiring for, she seemed pleasant enough – and so he hired her on the spot. To Sue’s surprise, almost immediately after coming to work, he started expressing his disappointment with her productivity. This went on for three months until he fired her without any offer of severance. Sue was a single mom with two kids to raise on her own and no job; that’s what prompted her to walk into my office.

I asked her if she and the attorney discussed any performance benchmarks or requirements at their one meeting. They had not. Understand this: a legal secretary types about half of the day; and half of them type above average and half below average (this holds true for programmers and retail sales clerks as well). Personally, I’ve never hired a legal secretary who typed less than 100 words per minute. When I asked Sue how fast she typed, she told me approximately 80 words per minute. She found out by testing herself years ago. None of her employers had ever tested her. I then tracked down the previous legal secretary; according to a test she took, she typed approximately 100 words per minute. Therein lies the moral to this story – the woman in my office was a failure on the first day of her employment and nobody knew about that fact!

This begs the question, “how many people walk into your company a failure on the first day and no one knows about it?” It makes no difference who you’re hiring , including rocket scientists, What’s the range of skill sets at your company? Without testing, you’re only guessing.

Let’s take this idea one step further. According to both Dr. Edwards Deming and Peter Drucker (perhaps the two greatest management gurus of all time), nine out of ten people want to do a good job every day – and their inability to do so is generally due to a system failure rather than a lack of motivation. Let me give you an example of how this plays out: at about the same time Sue walked into my office, I was consulting with a law firm that was having turnover problems. With the economy growing at the time, the larger firms were simply throwing more money at these employees. Although this was unrelated to my assignment, it dawned on me to ask them a basic question: “Have you tested all of your legal secretaries?” Turns out they had not – so that’s exactly what we did. We tested them not only on their typing, but also on the substantive and procedural knowledge that their job required.

Here’s what we learned: In most law firms, the attorneys get no management training and generally there are two attorneys to each secretary. Let’s assume that two of those attorneys manage intuitively above average and another two happen to manage below average. Now let’s say there’s a legal secretary who types 80 wpm for an above-average manager. The other secretary types 100 wpm for a below-average manager. Who do you think is viewed as the better secretary at the end of the day? When I ask this at workshops, most people respond “the one who types 80 wpm for a good manager.” This secretary gets the better performance evaluation and the raise – which makes absolutely no sense.

You can, and should, test for every essential skillset. For example, a few years ago I helped a real estate investment firm hire a CFO. Because they were Good to Great fans and wanted to have a great company, they decided to have a great CFO. When it came to testing, we decided to address the three essential skillset categories: substantive knowledge of accounting (GAAP), QuickBooks, and finally, Excel (because they used it for their real estate deals). So I contacted SHL (who I’ll talk about in a bit) and we set up tests for qualified job applicants. These tests cost us between $17 and $30 each. Because we wanted a CFO in the top 10% of skillsets, we decided that they would have to test in the top 20% of all three categories. It took us months to find that CFO, and in the meantime we used Account Temps. That’s the type of testing discipline you must go through if you want to have great employees.

For the past ten years, I’ve recommended only one company to do skill testing because I believe that it’s the best. When I first met them they were known as BrainBench. They were then acquired by PreVisor, and finally by the largest testing company in the world, SHL. Our contact is Jason Finney (jason.finney@shl.com). He is awesome and is surrounded by a great team. You can contact Jason to set up tests for your job applicants and existing employees. Not only will this help you to hire better, it will also help explain a lot of what’s going on with performance and what training you need to improve it.

Here’s what SHL users have said about testing: http://www.shl.com/us/results/client-results/. If you think this sounds like an endorsement of SHL, you’re right. So use them!

If you’d like a certificate for a free test from SHL, contact Jason directly and he’ll get it to you. If you’re an HR That Works Member, watch the one-hour webinar I did with Ken Lahti, one of the testing experts at SHL.

I also think it’s important to use skill tests when you hire consultants. How do you really know if they’re any good without testing them? For example, when we built HR That Works on a SharePoint platform, how did I know if our project manager was an expert or not? Yes, we were using a Microsoft Certified Partner, but that didn’t mean that the individual project manager was at the top of his game. Fortunately, he took a SharePoint test and scored very high, thus justifying my faith in his skills. Don’t trust the skillsets of employees, applicants, or third parties blindly – test for them!

As a final note, the skill testing I’m talking about is separate from character assessment. Fact is, you can’t fail your personality, so they don’t call them personality tests. However, it’s true that people can have failing personalities– and these are the people to make sure you don’t hire!

WEED AND WORK

By Your Employee Matters

In 2012, voters in Colorado and Washington legalized recreational marijuana use for those 21 and older. Voters in Oregon, a state which allows medical marijuana use, rejected recreational use in 2012.

States that currently allow medical marijuana use include Arizona, California, Colorado, Massachusetts, Montana, and Washington. Rest assured, more are on the way.

The question is how do these statutes affect employers? The Colorado law states that “nothing in this section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the work place or to affect the ability of employers have policies restricting the use of marijuana by employees,” The Washington statute does not mention using marijuana in the employment setting.

Of course, federal law prohibits marijuana use, whether medicinal or recreational. Additionally, the Department of Transportation does not accept medical marijuana as an alternative medical explanation. Every decision on this issue agrees that private-sector employers can discipline, terminate, or not hire employees who test positive for marijuana even if properly used under state law. However, Connecticut’s law specifically bans employers from acting against workers who use medical marijuana off-duty. It will be interesting to see how this law is interpreted. For example, if somebody smoked a ton of weed one evening, and they come to work fuzzyheaded, would an employer have the right to test them? Or suppose they smoked on the way to work or during a break?

HR That Works members should check their state laws in the BNA State Law Summaries.

SEXUAL HARASSMENT: SOME FOLKS STILL DON’T GET IT!

By Your Employee Matters

The recent Westendorf v. West Coast decision by the Ninth Federal Circuit Court of Appeals offers yet another example of management’s failure to understand that sexually hostile behavior is not permitted in the workplace. In this case, the boss and coworkers said the plaintiff was doing “girly work,” talked about the large breasts of another woman with her, made tampon jokes, joked about orgasms, and eventually started cursing at her. As mentioned in previous articles, whether she eventually ends up winning or losing isn’t the point. Either way, the employer now finds itself as a named defendant in a nationally publicized lawsuit that will cost it tens, if not hundreds, of thousands of dollars to defend what amounts to stupid and boorish conduct.

In this case, the plaintiff never reported the alleged harassment to a human resources officer. Perhaps if she had an alternative channel of complaint other than through the ranks, she would’ve received appropriate attention. Apparently the boss did admonish a manager and coworkers to quit the harassment, but when they continued it, the plaintiff just couldn’t take it anymore.

The court ruled that although the sexually hostile conduct was not severe or pervasive enough to alter the terms of her employment and support a sexual harassment claim, she might have faced retaliation for bringing the claims in the first place. It’s important to note even though this case was decided on April 1, 2013 dealing with conduct that ended in July 2008, it has yet to go to trial! I can only imagine what it could have, and should have, been settled for soon after filing, rather than slogging through the courts for the past five years. This doesn’t benefit either the plaintiff or the defendant – but it certainly helps fill counsel’s billable hour requirements.

EDITOR’S COLUMN: THE HR ALCHEMIST

By Your Employee Matters

In one of my favorite new age books, The Alchemist, author Paulo Coelho discusses four obstacles to realizing the journey towards our Personal Legend:

  1. The first obstacle is resignation to failure. We’re told from childhood onward that everything we want to do is impossible. In many cases, we’re the ones telling ourselves this – and we believe it!
  2. The second obstacle is misunderstood love. Says Coelho, “We know what we want to do, but are afraid of hurting those around us by abandoning everything in order to pursue our dream.” In a sense, we’re afraid to change because the people around us might not love us as much if we do. For example, they might view us as a threat, mirror our own inadequacies, or break away from the norm or culture. Coelho encourages us to accept that love is a stimulus; that the people who truly love us want the best for us: to be worthy of the miracle of life.
  3. The third obstacle is the fear of failure. According to Coelho, “We warriors of light must be prepared to have patience in difficult times and to know that the Universe is conspiring in our favor, even though we might not understand how.” In my personal experience, when we follow our passions we get what we ask for – just not when or how we expect it. There is no journey without roadblocks, setbacks, and challenges. This is what strengthens us. Our character is no different than our muscles: You use it or you lose it.
  4. Finally, there’s the obstacle of self-sabotage. As Oscar Wilde said: “Each man kills the thing he loves.” According to Coelho, the mere possibility of getting what we want fills our souls with guilt. We ask ourselves, “Who am I to be so fortunate when there are so many people in pain? Do I somehow think that I’m now better than other people because of my success?’ The ancient Greek term was hubris. When we become too full of ourselves and our accomplishments, the end is near. That’s why the journey is never about arriving, but traveling forever. Says Coelho, “I’ve known a lot of people who, when their personal calling was within their grasp, went on to commit a series of stupid mistakes and never reach their goal – when it was only a step away.” I know many of those people too.

When you think about your career, where have these obstacles shown up? Where do you have personal doubts about your ability to accomplish your Personal Legend? Who or what is attempting to hold you back from meeting these goals – or is this a story of your own making? Are you willing to accept that the journey toward success is guaranteed to come with more suffering than for those who are willing to simply be comfortable? Finally, are you willing to find joy in your success without the need to sabotage it?

Here are some Coelho quotes from The Alchemist:

  • “If someone isn’t what others want them to be, the others become angry. Everyone seems to have a clear idea of how other people should lead their lives, but none about his or her own.”
  • “There is one great truth on this planet: whoever you are, or whatever it is that you do, when you really want something, it’s because that desire originated in the soul of the universe. It’s your mission on earth.”
  • “To realize one’s destiny is a person’s only real obligation.”
  • “The only reason why each day feels the same as the next is because people fail to recognize the good things that happen in their lives every day that the sun rises.”
  • “I’m an adventurer, looking for treasure.”
  • “Making a decision is only the beginning of things. When you make a decision, you’re really diving into a strong current that will carry you to places you had never dreamed of when you first made the decision.”
  • “When a person really desires something, all the universe conspires to help that person to realize his dream”
  • “Every search begins with good beginner’s luck. Every search ends with the victors being tested severely.”
  • “When you possess great treasures within you, and try to tell others about them, you are seldom believed.”
  • “When something evolves, so does everything around it as well.”
  • “When we strive to become better than we are, everything around us becomes better, too.”
  • “The world’s greatest lie is that we lose control of our own lives and must let them be controlled by fate.”
  • “Be worthy of the miracle of life.”

FIVE WAYS TO KILL LIFE INSURANCE PAYOUTS

By Life and Health

You buy Life coverage to provide for your loved ones after your death. To make sure your beneficiaries receive what they’re owed, avoid these errors:

  1. Lying on your application. Truth hurts, but it can hurt even more if you lie on a Life insurance application. Although it might be tempting to deny that you’re a smoker, or have been treated for a particular disease or medical condition, doing so could make your policy null and void.
  2. Failing to make premium payments. Just because you miss a payment doesn’t mean your policy is dead. The insurance company will usually offer a 30 or 60-day grace period for payment, during which the policy will stay in effect.
  3. Not telling loved ones about your policy. Although this doesn’t mean the insurer won’t pay the beneficiaries after your death, it will make things more difficult for them. Most companies check databases for policyholder deaths, but not always in a timely manner. If you don’t give your beneficiaries policy information, some states have locator programs to help them check. The American Council of Life Insurers (ACLI) website also provides tips for tracking policies.
  4. Not naming other beneficiaries. If your primary beneficiary dies ahead of you, the secondary beneficiary will receive the death benefit. If he or she passes away before you, the proceeds will go to the final beneficiary. If both deaths precede yours, the benefit will go to your estate.
  5. Suicide. In It’s a Wonderful Life, Jimmy Stewart thought (wrongly) that he was worth more dead than alive because his family could collect on his Life insurance. However, under the “suicide clause” in a Life policy, if a policyholder takes his or her own life during the first two years of coverage, the beneficiaries would receive only the premiums paid to that point.

WHY YOU SHOULD BUY MANDATORY HEALTH INSURANCE NOW

By Life and Health

The main reason that Americans go bankrupt is because of unpaid medical bills. Most of these people carried Health insurance, but didn’t have enough coverage. It’s your health, and as a consumer, your responsibility, to look out for yourself.

As of next January 1, the Patient Protection Affordable Care Act (PPACA) will require all adults to buy a Health policy or face a tax penalty, The penalty for not carrying insurance in 2014 will be the higher of $95 a year per person or up to 1% of annual income. Starting in 2016, this will rise to $695 per individual or 2.5% of annual income, whichever is higher. For families, the penalty will be capped at $285 in 2014, rising to $2,085 or 2.5% of household income in 2016.

The good news: as of October 1, 2013, online Health insurance marketplaces or “exchanges” in every state will open their virtual doors for business, selling coverage that will take effect on January 1. What’s more, individuals and families with incomes between 100% and 400% of the federal poverty level who buy through these exchanges will receive subsidies or tax credits on a sliding scale to help pay for premiums.

These marketplaces will offer a variety of Health coverages, and the tax credits or subsidies can help you afford a level of care that suits your needs.

Don’t wait to be told to buy insurance. Start looking at your options now! As an early adopter, you’ll be more likely to find a plan with a better rate, one that saves your wallet, and – should you ever need it – your health, as well!

For more information, please feel free to get in touch with our agency.