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robintek

Apr 01
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FITNESS FOR DUTY EXAMS

By Your Employee Matters

Employers send employees to take fitness for duty exams for a number of reasons, including:

  1. A return to light duty or full duty after being out on a Workers Compensation claim.
  2. As a pre-hire medical examination to learn if they’re able to do the job with or without limitations.
  3. To see if they’re fit for duty after returning from family medical leave for a serious medical condition.
  4. To help manage a disability accommodation issue.
  5. If the employer suspects that the employee is unable to perform their job safely or productively, either because they’re under the influence or for some other medical reason.

The employer should pay for this exam, as well as for the employee’s time in taking it. When requesting fitness for duty exams, always provide the physician with a copy of either the employee’s job description or their essential job functions. In general, fitness for duty exams should be limited solely to the medical information necessary to see if the employee is fit for duty. For example, if they’ve had a shoulder injury, no medical information should be forwarded about a family history of diabetes.

Perhaps the most difficult area to define is when you suspect that there’s “something wrong” with an employee and then take the risk of asking them to have a medical examination. As long as the employer is “reasonable” in their concerns or suspicions, the employee would be insubordinate for not taking the exam and be subject to discipline or termination. Courts have ruled that it’s reasonable for employers to request fitness for duty exams when employees engage in outbursts and other erratic behavior, threats of violence, continued insubordination, a history of stress-related absences, appearing hung over, intoxicated, or high on the job, falling asleep at work, complaining of dizziness, and other activities.

To read the DOL’s position on Pre-Hire Exams go to http://www.eeoc.gov/policy/docs/preemp.html

As always, employers should involve legal and medical experts when making these difficult decisions. If HR That Works members have a question about the legitimacy of a fitness for duty exam, don’t hesitate to contact the free attorney Hotline.

Apr 01
Love0

EDITOR’S COLUMN: UNDERSTANDING SUCCESS

By Your Employee Matters

Malcolm Gladwell’s third book, Outliers, focuses on the origins of success. Gladwell brings home lessons that should be remembered. Think about how these factors might apply to you or your company:

  1. There’s no substitute for hard work. Although much of the book teaches how circumstance and nurturing have a big impact on success, the one common denominator is willingness to put in the hard work. No athlete, businessperson, musician, or anyone else succeeds without hard work. One of my favorite sayings in the book is an ancient Chinese one, “No man who rises before dawn 365 days a year fails to make his family rich.” (I can honestly say that I do this at least 300 days per year, so I’m getting close!).
  2. The 10,000 Hour Rule. If you want to be great at something, or at least be known as an expert, you need to study this subject for at least 10,000 hours. This holds true whether in business, law, medicine, technology, sports, music, etc. One of the downsides associated with letting more experienced employees go is losing their store of wisdom and expertise. If you’re in a “no choice” situation, at least try to have the departing employees provide you as much of their stored wisdom in writing as possible.
  3. The importance of cultural norms. For example, many Asians are accomplished in math not because of their IQ – but due to their work ethic: how their numbering system works, the precision required to grow rice, and of course, willingness to attend school an extra 50 days a year. What is the work norm at your company? Punching the clock or making sure things get done?
  4. The need for opportunity and encouragement. Many successful people have been in the right place at the right time. Perhaps they were just born at the right time. Perhaps others saw their innate talents and helped to nurture them. The bottom line: no one succeeds alone. We all need encouragement and nurturing. This becomes a real challenge when companies are shutting down on communications and training.
  5. Once you’re smart enough — you’re smart enough. As Daniel Goleman wrote in his book about emotional intelligence, “It’s just not IQ that matters.” An individual’s ability to deal with emotions and have practical insight is just as, if not more, important than IQ. After a certain point (roughly 130 IQ), the additional IQ points don’t make folks any more successful. Same would hold true for skill testing. If they are a top 20% user, chances are that’s good enough to make a difference. The rest depends on personal drive, emotional skills, etc.
  6. Pedigree matters — to a degree. As with IQ, going to good schools matters. Going to top ten schools doesn’t matter nearly as much. Just as opportunity, encouragement, support, and other “external” factors impact on the propensity for success, we should not overlook these factors when assessing someone’s potential. Perhaps there is great potential right under your nose; they just haven’t had the right circumstances to show their true mettle. This is one reason that I stress the importance of character assessment, skill testing, and other tools to get past your initial “impressions” about someone’s potential.
  7. The importance of expressing yourself. This discussion first came up in a risk management context in which Korean airline pilots were causing crashes because subordinates were intimidated about contradicting their superiors – even in the face of a disaster. Based on my litigation experience, CEOs are the last ones to know the truth until they’re in the middle of a trial. Here’s the point: we must “invite” subordinates to bring us their ideas, to break past the Culture of Silence. At the same time, subordinates must have the courage to speak up when appropriate.
  8. Meaningful work. One of my favorite quotes from the Gladwell book is, “Hard work is a prison sentence only if it doesn’t have meaning.” I work hard, but I love the work that I do. It provides me the three factors that Gladwell says are to essential to our work: autonomy, complexity, and meaning.
    • Autonomy gives us a sense of responsibility for the work that we do.
    • Complexity allows us to grow and learn; and
    • Meaning lets us realize the impact of our work.

The lack of opportunity for autonomy, complexity, and meaning will continue to deprive employers of excellent workers who find it more meaningful to work for themselves. To what degree are you allowing your employees autonomy, complexity, and meaning in their day-to-day activities? How can they get that from you greater than by working on their own or for someone else?

In conclusion, there’s no substitute for discovering the formula for success at your company!

Apr 01
Love0

EXPLORE THE CONCEPT OF PENSION MAXIMIZATION

By Life and Health

Most people try to hedge their bets when it comes to their finances, and planning for retirement is no exception. The goal is usually to earn the maximum return possible on the money we invest. One way to accomplish this is through a concept known as Pension Maximization. You should explore this strategy with your insurance agent if you plan to use pension income to generate your retirement income, because Pension Maximization could allow you to increase your monthly payments.

When a couple decides to start drawing on their company pension, they generally choose a joint and survivor option, which will provide a monthly income until both spouses die. The amount of your monthly income is based on how long an actuary thinks both of you will live based on your current age. The longer both of you are expected to live, the lower the monthly income.

With Pension Maximization, you can reverse this. Instead of opting for a joint and survivor payment, you take the single life, or straight life, option. Since the insurer is only providing income for the life expectancy of one person, the monthly income will be higher than that provided by the joint and survivor option. You also will receive a higher income because you aren’t receiving a term, or period certain, guarantee with this option.

However, if the covered spouse dies suddenly, monthly payments stop. To compensate for this risk, you can use some of the additional income — the difference between the higher monthly income that the straight life option pays and the lower monthly income of the joint and survivor option — to purchase a Life insurance policy on the covered spouse. So, guaranteed ongoing income for the surviving spouse is provided through the Life insurance policy instead of through the deceased spouse’s pension. Even though the survivor loses the pension income, he or she has the death benefit from the Life insurance policy, which can be used to purchase an income annuity that provides a monthly payment. And it’s likely that the survivor is now much older, so he or she might be able to generate a higher income due to a decreased life expectancy.

So far we’ve only discussed what happens if the person covered by the pension dies first. But what if their spouse dies first? With a traditional joint and survivor option even when one spouse dies the other spouse continues to receive the same monthly check. But with the Pension Maximization strategy, the covered spouse now has the option to either keep the Life insurance policy, perhaps for estate liquidity or charitable purposes, or surrender it and receive any cash value. Plus they’ll have the higher income provided by the single life pension option for the rest of their life.

Keep in mind that this Pension Maximization strategy doesn’t work in every instance especially if the covered spouse is not likely to qualify for Life insurance based on their health history. In any case, before you make an irrevocable decision regarding your pension payments, please give us a call to learn if Pension Maximization is right for you.

Apr 01
Love0

DISABILITY INCOME INSURANCE: MORE VALUABLE THAN YOU THINK

By Life and Health

Although it is difficult to consider, one day you could lose your ability to earn a living. An accident or injury could occur at any time, and cannot be anticipated. According to statistics presented by the Center for Disease Control’s injury research department, an estimated 5.3 million Americans are currently living with a debilitating disability, and each year about 80,000 more become disabled. The CDC concluded that just over half of all non-minor injuries result in some sort of debilitating disability.

Your Medical insurance does not cover all of the costs that accompany a disability, which comes as a surprise to many people. Even if you are covered by a Group policy, you might only be eligible to receive a small percentage (usually 50%-60% of gross income) of your current income if you cannot work, and benefits could last only a short time.

Social security disability will only be approved if you are severely disabled, and payments will not begin until six months after you have applied. Do not expect savings to cover you during this period; you might exhaust them completely within a few months. This could damage your credit if you fall behind on mortgage, insurance, or bill payments: 46% of all home foreclosures are caused by a disability, according to the U.S. Department of Housing and Urban Development. Sudden loss of income is a devastating, unpredictable experience and it pays to be adequately prepared.

A private Disability Income insurance policy can provide monthly benefits to replace a portion of your income in the event you become disabled. This will prevent you from exhausting your retirement savings, which would leave you without money to support yourself later in life.

Although most people understand the importance of Life insurance, it seems many overlook the value of Disability coverage. It seems we anticipate death more fully than we anticipate becoming disabled. Disability insurance could prevent this unanticipated financial strain, by ensuring that you and your family are able to maintain a comfortable standard of living regardless of whether you are able to work.

Apr 01
Love0

CONSIDER A SECOND LOOK AT WHOLE LIFE

By Life and Health

By now, most consumers understand the critical importance of Life insurance — especially those who have loved ones depending on their income. Life insurance offers financial protection for your dependents should anything happen to you. Without the right coverage, your family might struggle to pay the bills and make ends meet.

However, there is a common misconception about Life insurance: most people assume that Term Life insurance is much more affordable than Whole Life insurance. Although this might be the case for those who are young and healthy, Term insurance can become exorbitantly expensive for older individuals who might no longer be the picture of health.

Term vs. Whole

As you probably know, Term Life insurance covers you for a specific amount of time — anywhere from one to 30 years. These policies are less expensive because they are designed solely for protection. Many people choose Term insurance because they figure the need for Life insurance will decrease as they get older. Term insurance is also a useful option for those who want to protect their children until they are able to support themselves.

On the other hand, Whole Life insurance is permanent — it offers protection for your entire life. This insurance is ideal for individuals who still have someone depending on their income, whether it’s a spouse, grandchild or a special needs son or daughter. It’s also a good option for individuals who want to ensure there’s enough money to pay off their debts or provide a tax-advantaged inheritance for their heirs after they die.

Making the switch

Let’s say you fall into that second category — you think you might have a need for Life insurance protection for the rest of your life. However, your Term policy is about to expire. What should you do?

You might consider renewing your current Term policy. However, your premiums will most likely skyrocket now that you’re older. Alternatively, you could convert your Term policy to Whole Life. This will ensure that you are covered for the rest of your lifetime — which means your dependents will be protected when you die, whether that happens one or 20 years from now.

Whole-some benefits

One advantage to Whole Life insurance is that the premiums generally remain constant over one’s lifetime.

Another benefit to Whole Life is that you can borrow from the accumulated cash value of your policy. However, it’s important to realize that like any loan, interest will accrue on the money you borrow from your policy. If you do not pay back the loan during your lifetime, this amount will be deducted from the death benefit before it’s paid out to your heirs.

The loan feature is particularly beneficial to older policyholders who have built up a significant cash value. After all, as we grow older, we often run into some financial “surprises” — from medical emergencies to dwindling retirement income. The cash value from a Whole Life policy could help you deal with these unexpected events. For example, you could borrow from your Whole Life policy’s cash value to supplement your income, pay off your mortgage or fund long-term care expenses. You could even use the money to help pay for a grandchild’s college education.

Are you a good candidate?

As with any type of insurance, whether or not you qualify for Whole Life and the price you’ll pay depends on your age, health and the specific type and amount of insurance you plan to purchase. Meet with our financial professionals to determine whether or not Whole Life insurance is right for you. An expert can assess your unique situation and find the best policy to meet your needs.

Apr 01
Love0

KNOW WHAT TO DO WHEN YOUR CAR HAS BEEN VANDALIZED

By Personal Perspective

Late for an early morning business meeting, you grab a cup a coffee and rush out the door — only to discover your car’s windshield has been smashed to bits. Your heart immediately plummets and your hands begin to shake with anger. Now what? Although you might be tempted to burst into tears or launch into a fit of rage, it’s important to take a few deep breaths and focus.

Fortunately, if you have comprehensive coverage, your Auto insurance should cover the damage to your car. However, to ensure you receive the money you need for repairs, you will need to follow a few specific steps:

Notify the police

If your car has been vandalized, you should contact the police within 24 hours of the vandalism. It’s important to file a police report so that you have an official record of the incident. This record will help your Auto insurance company resolve your claim.

Call your insurance company

You should also contact your auto insurance company to file a claim. Don’t delay — most insurance companies say you must file your claim as soon as possible in order to receive benefits.

Your insurance company may request a police report, personal statements and other documentation. Additionally, if any items that are protected under comprehensive coverage were stolen from your car (such as an aftermarket car stereo), they may ask for receipts for these items. Try to provide your insurance company with as much documentation as possible because this will help them resolve your claim more quickly.

Prevent further damage

Some insurance policies require you to take measures to protect your car from additional damage after vandalism. For example, if your window has been broken, you will need to cover it with plastic or another protective material as soon possible. This will ensure that the interior of your car is not further damaged by rain, snow, wind or other elements. Your insurance company might reimburse you for the materials you buy to protect your car, as long as the expenses are within reason.

If you knowingly leave a broken car window uncovered, and your car interior or electrical systems are damaged by weather, your insurance company will not cover this damage. This is why it’s so important to take measures to protect your car as quickly as possible.

Generally, once the police have taken any evidence they might need from your car and say you can move your vehicle, you should immediately take steps to protect your car from further damage. You do not need to wait for your claims adjuster to assess the damage before taking these steps.

Let your insurance company resolve the claim

Once your insurance company assesses the damage to your car, they will tell you whether or not the damage will be covered. If it is covered, they will give you a few options for repairing your car to its pre-vandalism condition. If your window was broken and your dashboard was damaged, they will be repaired. If your car stereo was stolen, the insurance company will give you a new one comparable to the one you had.

If you have any questions or concerns about your claim, do not hesitate to contact your insurance company. They understand having your car vandalized is an invasion of privacy, and they want to help you through this difficult time.

Apr 01
Love0

ESTABLISH AN EMERGENCY COMMUNICATION PLAN WITH YOUR FAMILY

By Personal Perspective

Severe weather is one of the most common sources of natural disasters, and no region of the U.S. is off limits. Does your family know what they should do in the event a weather-related natural disaster strikes?

According to the Home Safety Council, fewer than 30% of U.S. families have created and discussed an emergency communication plan. One of the reasons that so few families have developed one is that many people believe it requires considerable time and effort.

Creating an emergency communication plan is actually easier than you might think. The first component that you should have, according to the Home Safety Council, is a corded land line phone in your home. It is the most reliable source of communication in an emergency because it will continue to operate even if the power goes out in the house.

In addition to a communication plan, the Home Safety Council offers the following recommendations:

  • Have a “Ready-to-Go-Kit” – In a duffel bag or backpack, place one gallon of water per person, non-perishable canned food, a can opener, paper plates and cups, plastic utensils, a flashlight and extra batteries, a battery-operated radio, a change of clothes for each family member, personal hygiene items, a small first-aid kit, and pet food and supplies. Keep the kit near any medications you would need to take with you in an emergency.
  • Have a “Ready-to-Stay Kit” – You might have to stay inside your home for an extended period of time, and this kit will help you survive. In a large plastic tub with a cover, or easily accessible cabinet designated for this purpose only, place three gallons of water per family member, enough non-perishable canned food and snacks for at least three days, a can opener, toilet paper, blankets, books and games to keep you busy, a flashlight and extra batteries, a battery-operated radio, a small first-aid kit, paper plates and cups, plastic utensils, a change of clothes for each family member, personal hygiene items, and pet food and supplies.
  • Designate a safe meeting place outside your home.
  • Designate a safe place to seek shelter in your home in case of severe weather. Your survival supplies should be stored in this location.
  • Teach young children how to use the phone to call for help.
  • Update wireless phones with “in case of emergency” (ICE) contact information.
Apr 01
Love0

CONSIDER RAISING POLICY DEDUCTIBLES TO SAVE ON PREMIUMS

By Personal Perspective

As money gets increasingly tight, consumers are trying to save wherever possible. Insurance policies are one place that people typically look to cut costs. But, are there ways you can save when it comes to insurance without jeopardizing your coverage? Many insureds believe so. One method of cutting back on your premium costs is to reduce the dwelling or liability limits on your homeowner’s policy. Similarly, you could also request a reduction in the liability limits on your Auto insurance policy.

However, not only do these methods fail to save you money in the long run, they also make you increasingly vulnerable to risk. Consider how much you could lose if a judge decided against you in a liability suit, or someone was hurt in your home.

A wiser course of action is to increase your policy deductibles. On a homeowner’s policy, raising your deductible from $250 to a $500 could realize a premium savings of 10% to 15%. You could also consider raising the deductibles on the physical damage section of your Auto insurance to save money on the premium. Having a $500 deductible on both comprehensive and collision can save you as much as 30%. A $1,000 deductible could result in even more savings.

Many insureds argue that if they do need to file a claim, they won’t have $500 to cover the newly increased deductible. Although $500 might sound like a large amount of money to get together, it is actually only $250 more than you would have needed if you still had the original $250 deductible. Keep in mind that with the savings benefit you will get from a higher deductible, you should be able to save that extra $250 in less than 2 years.

For those larger savings, consider a graduated approach. If you are not financially able to go from paying a $250 deductible to paying $1,000 deductible, raise your deductible to $500 now, and put the money you save into a dedicated savings account for the purpose of accumulating money to increase your deductible again. When you have saved enough in the account, increase the deductible to $1,000.

Raising your deductible will definitely save you money over the long-term. More importantly, it will not put you at an increased financial risk. Give our office a call today!

Apr 01
Love0

UNDERSTAND THE FINE POINTS OF WAIVERS OF SUBROGATION

By Business Protection Bulletin

Suppose an air conditioning contractor, while installing a system for a new industrial building, has an accident. Another contractor’s employee on the job site suffers injuries when the AC contractor’s scaffolding collapses and falls on top of him. The injured worker sues the AC contractor and the project owner. The project’s contract included a requirement that the contractor assume the owner’s liability for any accidents arising out of the contractor’s work. Consequently, the contractor’s General Liability insurance company pays the injured worker for both the contractor and owner’s shares of the damages. The insurance company, however, has determined that the owner was 20% responsible for the accident. It files a claim with the owner demanding some of its money back.

The insurance company’s action is entirely legal. Many project owners and general contractors, wanting to avoid this situation, insist that their subcontractors agree to a waiver of subrogation.

Subrogation is a legal principle in which a person who has paid another’s expenses or debt assumes the other’s rights to recover from the person responsible for the expenses or debt. For example, if someone hits your car in a parking lot and causes significant damage, your insurance company will pay you for the damage (assuming you bought collision insurance,) then recover the amount of its payment (subrogate) from the other driver (or, more commonly, from the driver’s insurance company.) Subrogation holds ultimately responsible the person who should pay for the damage.

Owners and general contractors want to transfer their liability to subcontractors, to the extent that they can. Therefore, contracts often include a waiver of subrogation agreement. In such an agreement, the subcontractor promises not to pursue recovery from the other party. That agreement might bind the subcontractor’s insurance company, depending on the type of policy and its terms.

A standard Commercial General Liability policy forbids the policyholder from doing anything to impair the insurance company’s rights after the loss occurs. This implies that a waiver of subrogation agreed to before a loss binds the company. Also, the sub’s policy might protect the other party if it names him as an additional insured. Under common law, an insurance company may not subrogate against its own insured. To remove any doubt, the sub should ask the company to add an endorsement applying a waiver of subrogation to the person or organization named in it. Insurance companies vary on the amount of premium they charge for this; some make no charge at all.

The standard Business Auto insurance policy has language similar to the General Liability policy. Unlike GL insurance, there is no standard waiver of subrogation endorsement for Auto insurance. Some insurance companies might offer their own versions of such an endorsement. Again, premium charges will vary.

Workers Compensation policies require an endorsement whenever a waiver of subrogation is desired. This endorsement might apply on a blanket basis to all parties with whom the insured has written contracts requiring waivers. Alternatively, it can apply only to the party listed on its schedule. The insurance company may charge up to 2% of the policy premium for blanket coverage or 2% to 5% of the project’s premium for individual coverage.

Commercial Property and Inland Marine insurance policies vary as to whether they permit waivers of subrogation even before a loss.

In all cases, a contractor or building tenant who is required by contract to provide such a waiver should check the relevant insurance policies. Policy changes should be requested if it is unclear whether they permit pre-loss waivers. Be sure to consult with us on all insurance-related contractual matters to ensure that the proper coverage is in place.

Apr 01
Love0

DOES YOUR COMPANY NEED INTELLECTUAL PROPERTY INSURANCE?

By Business Protection Bulletin

You might not even be aware of a critical breech in your General Liability coverage. But you’re not alone. Many businesses carry little to no Intellectual Property Infringement coverage, when, in fact, they would be wise to do so.

During the past decade or so, there has been a growing trend by many insurers to reduce coverage dramatically for advertising injury in General Liability policies. In addition, newer policy forms exclude coverage for trademark and patent infringement claims altogether.

The common misconception is that this coverage applies primarily to the publishing industry. But, if your business has any involvement with media, technology, or both, you might need to conduct a risk audit to uncover exposure to potential intellectual property infringement claims.

Does your business need Intellectual Property insurance?

Businesses which might be exposed include:

  • Publishing companies
  • Companies which mimic a popular brand slogan or name in their own advertising
  • Companies involved in e-commerce
  • Any company which has a web presence
  • Media companies which specialize in advertising, publishing, broadcasting, photography and similar related professions

Types of insurance

Depending on your exposure, available coverage options include:

  • Intellectual Property insurance which is a more encompassing form of insurance to enforce your patents and also extends coverage to copyrights and trademarks.
  • Patent insurance to protect holders of patents from patent infringement losses.
  • Liability insurance for patent infringement to protect sellers, manufacturers and also users when a claim is brought against them for alleged infringement of patents.
  • Specialized Media Liability insurance for any company that specializes in any media format.
  • Advertising Injury insurance to cover any potential claims that stem from advertising campaigns. An advertising injury is any statement made in advertising that causes loss to another person or entity.

Types of coverage

There are generally three types of Intellectual Property insurance coverage currently available:

  • Legal defense only provides coverage for the costs of legal defense but nothing for any awarded damages.
  • Indemnity and legal defense pays for both legal defense costs and any awarded damages.
  • Enforcement coverage to pay for any legal costs to pursue an intellectual property infringement claim against a third party.

To qualify for Intellectual Property insurance you might be required to show that you have performed an Intellectual Property Search or have registered for a patent, copyright, or trademark.

Intellectual Property is a specialized insurance coverage. Premium differences for any form of Intellectual Property Infringement coverage vastly differ so carefully examine what each policy covers and excludes. Consult with one of our insurance brokers and your legal counsel to limit your risk exposure.

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