Delaware workers compensation and modified-duty jobs

The insurance commissioner, Matt Denn, and the State of Delaware, have been working the past couple years on overhauling the costly, definitely for small business owners, workers compensation system. It's no secret that many employers have been frustrated by the ever increasing costs associated with the program in recent years. While it will take time for the complete overhaul to be completed, a welcome change being felt more immediately is the decrease in premiums that have lightened the insurance premium burden on business owners both large and small. One facet that is being addressed is a managed care type of system, aimed at decreasing both the cost and time involved in the claim process. Recently, while reviewing the Delaware Code referencing this, Title 19, Labor, Workers Compensation, we found an item of interest for employers. Specifically, under Chapter 23, section 2322E, paragraph (d), it states, "Within 14 days of receiving a notice of injury, an employer shall provide to the health care provider and the employer's insurance carrier, if applicable, an outline for modified-duty jobs which may be available to the employee." In other words, if an employee is hurt on the job and cannot immediately return to the position they were working at when injured due to a lengthy convalescence/rehabilitation period, employers should have a developed outline of modified-duties that the employee can perform. The statute says specifically, "which may be available to the employee", meaning that not all businesses might have modified duty options available, either due to their limited size or the specific scope of their operations. It might be a good idea to take a look at your operations now in order to be prepared should such a situation arise. If you simply aren't sure of the options for modified duty that may be available for your specific business, a good source to go to for guidance would be your agent and insurance company. All insurance companies have professional staff that can provide you with the options/information necessary to implement a modified duty plan just for your company.

Do you have policies in place for company owned laptops used by employees?

Many businesses, both large and small, provide their employees with laptops. Many times employees will either take them home or take them with them on company trips. Is there a plan in place at your company regarding the security of laptops? Many of these hold sensitive company information that could cause a major headache for the company should this information be stolen. Do these devices contain financial information? What about sensitive information specific to your clients? Many times employees transport these devices in their vehicles and might be prone to leaving their vehicles unlocked. While there is coverage available to replace the stolen laptop, there isn't much that can be done once this information has fallen into the wrong hands. Set up procedures before something happens regarding security for these devices. Make sure that when employees do travel with these devices that they are stored/locked securely in the trunk while traveling, and that they don't leave them in the vehicles once they reach their destination. While the headaches begin once the laptop is stolen, that's nothing like the headache from the lawsuits from unhappy clients should sensitive information end up in the wrong hands pertaining to your clients.

Cell phones and driving - insurance industry taking notice?

We have touched on this subject briefly before but I ran across an article in "The Specialty Insurance Blog" referencing statistics that indicate that distractions while driving, such as using a cell phone, have a direct impact on accidents. The blog references a post in the Insurance Journal that discusses a finding by the National Highway Traffic and Safety Administration (NHTSA), that emphasizes that 25% of all traffic accidents are caused by distractions, and that a survey done by Nationwide Mutual Insurance found that 73% of all drivers talk on their cell phones while driving. I mentioned in the past about small business employers having clearly stated company policies for employee use of cell phones while driving on company business and I think this further illustrates the actual gravity of the issue. The Specialty Insurance Blog referenced a study by the University of South Carolina that found subjects were "4 times more distracted while preparing to speak or speaking than when they were listening". Maybe it's time to revisit the issue in the office?

Another candidate for Delaware Insurance Commissioner

Republican house attorney John Brady has resigned his position in the General Assembly to throw his hat in the ring for the insurance commissioners office being vacated by current commissioner Matt Denn, who is running for the office of lieutenant governor in this fall's election. Mr. Brady, the first Republican to join this particular race, is joining the three Democrats who have already announced, Gene Reed, Karen Weldin Stewart and Tom Savage. Might be a good thing to pay attention to this race due to the number of candidates. Are there substantive issues being raised? How will they be helping the consumer and what's their attitude towards insurance companies? Something to think about. Anyway, happy 4th of July to all!!

National Disaster Plan - more contributions to the small business owners insurance premium

Here's another example of "proactive" government in action. According to a post entitled "What Florida really wants - other peoples money" in one of my favorite blogs, RiskProf, John McCain, the nominee for the republican nomination for President, does not support a national catastrophe plan, while the democratic nominee for President, Barrack Obama, and some governors do. Of course what this really means is that those of you not living near a coastal area could still end up subsidizing those of you that choose to. The main thrust of the disaster plan would be to create an emergency cash reserve set up for states to access in the case of future natural disasters, such as Hurrican Katrina or rampant wildfires. This fund would be federally managed, always a cause for concern, with funds contributed by private insurance companies. Obviously the governors that are vocally backing this plan happen to preside in coastal areas. As Mr. McCain stated, this would expand the role of the federal government into the private insurance market. The problem as I see it is that we already have a federally supervised flood program in place. Some states, such as Florida, already have their own disaster funds. It seems that while the populist message of their governor, laying high insurance costs at the feet of insurance companies, and adding more state regulation to said companies, isn't enough. It looks like the funds are lacking should a large scale disaster hit them, so what better way than to support a national fund to help backstop their fiscally faltering local initiatives. Either way, more government involvement will add up to higher premiums for small business owners and the public in general.

Insurers stepping up efforts to combat fraud

According to a recent article in National Underwriter, www.propertyandcasualtyinsurancenews.com, anti-fraud organizations representing sectors of property and casualty insurance and health insurance are combining efforts to combat fraud. This is good news for small business owners who are annoyed when their insurance companies pay for what they consider illigitamate claims. Not only are insurance rates affected by the number of claims paid out for possible fraudulent activities but individual insured's loss histories are negatively impacted as well. As many of you might know, every claim paid out by your insurer is recorded by them and provided to any future insurance company you wish to do business with. Hopefully this is a sign of future proactive and aggressive attention to this area by insurance companies.

Securities Markets - Insurance companies venturing into previously uncharted territory

With the spotlight currently focused on the subprime mortgage crisis and with many prior examples of securities debacles, think Enron, it's interesting to note that insurance entities are starting to explore opportunities into this historically untouched area of investment for them. According to their website, Lloyds, www.lloyds.com, one of the largest world players in the insurance and reinsurance market, "Convergence between the capital and insurance markets is gaining pace and Lloyd's insurers are at the forefront of developments". They have formed an investment management company that will specialize in traded insurance risk. With the global industry as a whole having an extremely profitable run the past couple years due to the low incidence of insurance related catastrophes, combined with a successful run of investment profit in the stock markets, they are now exploring new ways to broaden their earnings capacity. While at face value this looks much like many other new investment ventures, the fact that the insurance industry is heading in this direction can cause consternation among insurance company investors. While the insurance industry is inherently based on risk, it seems to be taking that risk factor into a whole new direction with this move. Our industry, and it's profits, are subject to the unpredictable whims of nature, and it seems they are now heading into the unpredictable whims of the securities markets as well. Just some food for thought going forward. It might be interesting to keep an eye on this development and see if it turns into a trend. Either way it should make be an interesting ride for investors.

It's hurricane season - got flood?

It's that time of year again, hurricane season is upon us. According to the National Oceanic and Atmosperic Agency (NOAA) website, they are predicting a 90% chance of normal or above normal activity in the Atlantic this year. Their definition for normal or near normal is a range for major hurricanes at 1 to 3 for the season. Their definition for above normal is a range between 2 and 8 major hurricanes. The reason I bring this up is the fact that many business owners located at or near the shore, or in designated flood zones, aren't currently carrying flood insurance. While not intended to scare you, it's important to realize that your current property/casualty insurance does not cover you in the event of flooding. Take a look around your building/facility, is most of your stock and or equipment, located in an area accessible to water in the event of flooding conditions? Can you afford to self insure this material in the event of a major weather event? You may be surprised at how affordable flood insurance can be. Take the necessary steps now to make sure you have the proper coverage in place before something occurs. By the way, don't bother to call your agent in the event you hear in the local media that a major storm is developing off the coast of Florida. In most cases coverage is not accessible when a storm is already forming and waiting periods can also be involved.

Less driving increasing insurer's profits

Interesting article I ran across. Seems that with the increased gasoline costs, motorists are driving less, thereby decreasing accident rates. An analyst at Lehman Brothers upgraded major personal auto insurer Progressive Corp. as an investment due to this trend. With the recent trend of insurers decreasing their rates to win business, this would be a welcome sign for them to increase profit margins. The story stated that in the 70's, when gasoline prices increased substantially, the same trend occurred.

Those premiums keep going down, but for how long?

Those of you making the decision on purchasing commercial property and liability coverage for your business are probably enjoying the current climate in the pricing of your commercial insurance coverage. We are in the midst of a "soft market" in commercial insurance pricing and it's only makes financial sense to place your coverage with a carrier offering competitive pricing. Let's keep in mind that the lowest price isn't always the best deal. Make sure to examine carefully the alternative proposals you are receiving to make sure they match up with the coverage you currently have. Keep your agent/broker honest by insisting on no shortcuts in achieving pricing cuts. You should definitely take advantage of the pricing climate that is currently occurring. Just make sure you are still enjoying the same level of coverage you had before with the lower premiums you are now paying.