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How the Rise of Autonomous Vehicles May Affect Transportation and Insurance
December 4, 2018
Long a part of science-fiction novels describing a technologically-advanced future, self-driving cars have become reality. Numerous companies have developed the autonomous vehicle technologies needed to safely navigate America’s highways and byways. With the rise of these self-driving vehicles, new considerations of risk and of insurance have become apparent. These vehicles have the potential to change the insurance landscape dramatically, leading to questions about liability and the solutions insurance companies like U.S. Risk Underwriters will need to implement to protect drivers, their vehicles, and the companies manufacturing and selling autonomous trucks and cars.
Autonomous Vehicles: The Basics
Developed in part to help combat traffic fatalities on American roadways, autonomous vehicle technology has made significant advances in the past decade. Industry analysts project that these vehicles, sometimes referred to as “self-driving” or “driverless” vehicles, will account for more than 80% of all new vehicle sales in urban centers by the year 2040.
Autonomous vehicles use a range of sensors – including radar, sonar, and camera equipment — and computerized systems to navigate roads. Current technologies, such as that produced by innovative automakers like Tesla and Mercedes, supplement the actions of a human driver; in many vehicles, an “autopilot” feature takes over when the driver wishes. Eventually, the technology will mature to the point that these vehicles operate entirely without human interaction, delivering people and cargo to their destinations in the safest ways possible.
Insurance Considerations for Self-Driving Vehicle Technology
Driverless vehicle technology has created a significant challenge for government regulators and for insurance companies. At the core of this challenge is one simple consideration: if a vehicle is driving itself, who is ultimately responsible if that vehicle were to become involved in a crash resulting in property damage, injury, or death? Is it the owner of the vehicle, the manufacturer, or a combination of the two? One thing is certain: ideas about liability and risk are sure to change substantially.
A pedestrian death in March, 2018 brought the issue to a head. An autonomous vehicle being tested in Tempe, Arizona, struck a woman as she was crossing the road on foot. A safety driver in the vehicle was unable to respond to the pedestrian in time, leading to her death. The company testing the vehicle settled with the victim’s family members, but pointed to glaring problems with insurance coverage and liability concerns regarding this new technology.
Most states require some form of liability insurance for the owners and operators of vehicles on American streets. Autonomous vehicles, unfortunately, push the envelope of available coverage, especially when it comes to product liability claims. In some cases, the vehicle manufacturer’s liability insurance may cover claims resulting from collisions, while in other cases, the manufacturer may seek to sue driverless technology and component companies used in the vehicle’s assembly. Driver control, or the amount a human driver interacts with automated systems, gives rise to other liability concerns; a human driver may or may not be adequately covered by current insurance plans.
Finally, the insurance structure itself may have to be adapted to meet changing risks. It is important to note that driverless vehicle technology was developed to help reduce traffic-related fatalities; if claims were to drop significantly due to this technology, insurers may have to revisit the structure of policies, coverages, and limits.
Takeaways from Autononous Vehicle Technology and Insurance
U.S. Risk Underwriters and the insurance industry at large face significant challenges any time new technology is introduced into society. Self-driving vehicles are no exception. The three major takeaways from autonomous vehicles and how they will influence the insurance industry are:
- Automakers and driverless vehicle technology manufacturers will assume more liability, particularly if vehicles and their systems are involved in a crash that leads to personal injury or property damage.
- Over time, insurance premiums will decrease – especially as driverless vehicle technology matures and accident rates fall.
- Insurers may change their structure and their offerings dramatically, potentially even dropping personal accident insurance altogether. Many years of research and risk analysis are to come, but for now, it is clear that the insurance industry will have to adapt to meet changing risk factors. ◼
What Businesses Need to Know About Pollution Insurance
November 20, 2018
Businesses face many challenges as they conduct operations each year, and often have unique risks associated with the business environment. To help mitigate some of the risk exposures these businesses face, some form of commercial general liability (CGL) policy is typically purchased. One aspect that many businesses do not take into account, however, is that of pollution liability. What if a business were to become involved in an environmental event, such as a hazardous materials spill or groundwater contamination? U.S. Risk Underwriters, a leading provider of specialty underwriting programs for commercial and professional needs, believes that nearly all businesses can benefit from the added protection of pollution liability insurance.
Impacts of Environmental Liability
When thinking of environmental disasters, most people can name significant events like oil spills or large-scale chemical contamination from factories and industrial processes. The reality is that these large-scale disasters are not the only environmental exposures happening in the U.S. and abroad. Contamination of groundwater or the atmosphere occurs on a much smaller scale nearly every day and across industry sectors. Here is a look at some of the facts and figures surrounding environmental incidents:
- In the United States, annual losses related to pollution claims range between $350 million and $800 million.
- Lawsuits based on large-scale environmental disasters have risen in recent years, with some suits resulting in multi-million dollar judgments and cleanup costs for companies.
- The computing industry in the United States alone has spent nearly $42 billion in environmental cleanup and mitigation costs, which includes legal expenses related to lawsuits.
- Pollution exposures/liabilities can be linked to nearly any business operation, including real estate projects, shopping malls, office parks, warehouses, schools and universities, and even hotels.
What Businesses Need Environmental Site Pollution Liability Insurance?
Pollution liability insurance is typically carried by companies that are involved in industrial processes, like the oil and gas production industry, agribusinesses, and manufacturing concerns. These industrial companies understand that their risks involve the potential for a chemical spill or environmental contamination. Other businesses, however, can face liability claims, even if those businesses do not use hazardous materials in their daily operations. Pollution liability claims can arise from many possible scenarios; for example, the tenants of a shopping mall may be held liable for the actions of the housekeeping staff if a chemical spill were to occur and customers were injured as a result, even if the tenants were not directly involved in the incident.
As mentioned earlier, most businesses carry a commercial general liability (CGL) insurance policy. Unfortunately, most CGL policies exclude environmental liabilities, potentially leaving companies exposed to significant expenses in cleanup costs and legal fees. Pollution liability insurance is designed to provide coverage for the unique risks associated with environmental incidents. U.S. Risk Underwriters believes that most business operations, regardless of type or sector, can benefit from the added protections of this insurance type, serving to cover against the costs and fees that a lawsuit can bring. ◼
How Agencies Can Utilize Temporary Staffing During the Holiday Season
November 6, 2018
As Thanksgiving approaches, companies across the country are gearing up for the busy holiday season. Extra hands may be needed to handle the increased workload. An increase in employee absences due to seasonal illnesses, coupled with a rise in holiday-related vacations, take their toll on the workforce. Faced with potential employee shortages, there are only a few options available to employers as they enter the holiday season. As one possible solution, many companies turn to temporary staffing agencies for help. It is critical that staffing agencies have some form of liability insurance to protect themselves and their clients; staffing insurance such as our StaffPak program serves to cover against a wide variety of staffing related liability exposures.
The Christmas Rush: Temporary Staffing Solutions
According to employment industry projections, it is estimated that over one million temporary workers will be hired for the holiday season in the United States. For retailers, the holiday season kicks off with “Black Friday”, the day after Thanksgiving, and continues until just after the Christmas holiday. Holidays can be a stressful time for many employers, especially when it comes to providing vacation time for valued employees. Illnesses related to the fall and winter months – particularly colds and flu – can rob employers of critical staff just when they are needed most. What can employers do to ensure that there are enough employees on site to handle demands?
Holiday sales, internet shopping, longer hours of operation, and special events necessitate increased employee coverage, and many businesses rely on the services provided by temporary staffing agencies to fill gaps in this coverage. These staffing agencies handle many aspects on behalf of their clients, including employee recruiting and background checks, simplifying the process of staffing for employer clients. There are many benefits to be found in the temporary staffing solution, but the most critical benefit is that businesses will be able to operate at full capacity while responding to the increased demands placed on them by customers during the holidays.
The Role of Staffing Insurance
The holiday season is a source of stress for many employers that find themselves ramping up for increased consumer demand. As illustrated above, temporary staffing solutions provide the employee coverage needed, and these solutions offer many benefits. One of the commonly-overlooked issues, however, is the unique risks temporary staffing agencies face as they deliver services. To protect the financial interests of their own agencies as well as their clients, staffing insurance is an important foundation of risk management practices. Staffing insurance plans typically cover general liability and employment practices liability. Many such plans also provide errors and omissions (E&O) coverage. Because almost all states require workers’ compensation insurance, leading insurance providers also offer such insurance coverage for staffing agencies, including those that place temporary workers during the holiday season. With the right staffing and the right insurance coverage, businesses across the country can rise to the unique challenges of the holiday season. ◼
The Legal Obligations of a Community Association
October 23, 2018
Community associations, typically known as homeowners associations or HOAs, play a vital role in home ownership. Originally developed to help preserve neighborhood continuity and real estate value, today’s community associations are tasked with myriad duties. As a contractually- or statute-obligated organization, a community association is faced with significant legal rights, rules, and responsibilities. U.S. Risk Underwriters, a leading provider of customized insurance solutions for these organizations, knows that community associations must protect themselves and their assets against potential legal claims.
The Role of the Community Association
Homeowners’ and community associations were created to protect the common good of residential real estate participants. Originally intended to control the growth in neighborhood areas, these associations have evolved over time. In some cases, HOAs may exist to provide affordable amenities for a given neighborhood – amenities that would be out of reach for individual homeowners. They may also screen potential home purchasers, granting approval to those purchasers meeting rigorous qualification standards. Others provide for the maintenance and upkeep of common areas, or to initiate additions and improvements of the property. It is estimated that there are over 450,000 such organizations in the United States, representing about 40 million residents.
A typical community association is set up as a business entity, either by incorporation or limited partnership. There may be a board of directors or some other governing committee including officers or trustees. Membership in these organizations is not optional; in fact, homeowners purchasing real estate in an association-controlled neighborhood are enrolled automatically and must pay monthly or annual dues as contractually obligated. There may also be special assessments or fees for certain aspects, such as the use of community amenities or for future projects. By-laws of the typical association include provisions to require financial disclosures to participants, including annual operating budget information as well as details about projects or property improvements that will enhance home ownership in the neighborhood. It is important to note that failure to pay assessments or fees can result in liens against the homeowner’s property or other legal remedies including property foreclosure.
Community Associations: Legal Duties, Obligations, and Liabilities
Of all of the potential roles and responsibilities of a community association, its primary function is that of fiduciary obligation. The collection of fees and assessments, along with entering into maintenance and construction contracts for common areas, on behalf of participating property owners, are the most important functions of the HOA. The obligation to handle those responsibilities falls on the association, its board membership/trustees, and its director. Failure to handle these functions can present significant liability challenges, either through lawsuits filed by individual homeowners or as a class action by multiple affected parties.
The community association also has governmental duties and obligations, establishing community standards and permissible actions by homeowners participating in the association. Liability concerns also arise when the contract language of an HOA differs from the enforcement of its provisions, such as in cases where the enforcement of regulations oversteps the original intent of the contract itself. Heavy-handed or uneven enforcement of HOA provisions can lead to charges of discrimination or misconduct on the part of association board members and its director(s).
Finally, as mentioned earlier, a community association acts as a non-profit business organization, and in fact is typically set up as a business entity. Its goal is to enhance and protect the value of property in the neighborhood on behalf of participating homeowners, and as such must operate with an eye toward sound business practices. And, as a business, there are risks associated with misconduct, negligence, or fraud to be concerned with. U.S. Risk Underwriters, through its customized insurance approaches for community associations, understands that HOAs and other associations must manage their risk exposures carefully. By providing specialized insurance – the company’s Tailored Community Association Plan, or TCAP – associations can protect their own assets as well as the assets of participating property owners. Association insurance typically includes coverage for property damage and injury claims as well as liability protection for directors, officers, committee members, and volunteers of the association. With this crucial liability insurance coverage, community associations can maintain property values while protecting the interests of the association itself and its participating members. ◼
The Challenges of Insuring the Transportation Market
October 16, 2018
The transportation industry experiences numerous unique risks. Transporting goods over long distances exposes vehicles, personnel, and cargo to significant risk; an alarming rise in trucking-related fatalities has only added complication to the transportation market. Insuring the industry presents significant challenges as well. Special risks insurance brokers must have a keen understanding of the market, its risks, and the dynamic nature of the industry in order to deliver comprehensive insurance solutions. In this article, we’ll illustrate some of the insurance coverage challenges brokers face when developing insurance programs and services for the transportation industry.
Trucking Incidents Raise Insurance Alarms
The transportation industry is comprised of many parts, including cargo and freight carriers, passenger services like taxis and car hires, public transit, and automotive rental firms, only to name a few. Trucking is the nation’s largest transportation component. According to statistics compiled by the American Trucking Association in 2017, trucking:
- Employs 7.4 million Americans.
- Traveled in excess of 450 billion miles.
- Generated $41.3 billion in user fees and taxes on both the state and federal levels.
- Moved 10.4 billion tons of freight.
- Compiled nearly $700 billion in revenue.
In the time period between 2010 and 2015, record-breaking payouts due to insurance claims occurred, driving some commercial fleet insurers out of the transportation market entirely. Several factors can be attributed to the steep increase in payouts, including mobile phone usage, sleep deprivation, deteriorating roads and highways, and an increase in the number of miles traveled and the costs of cargo being transported. Traffic fatalities involving commercial trucks jumped nearly 8% in the five-year period, resulting in hundreds of millions of dollars in claim awards and legal settlements.
In the same period, insurance rates have also climbed – in some cases by 30% or more – and are expected to rise in the next years. The risk factors presented above have created significant challenges for insurers and for transportation companies alike. This alarming development means that transportation companies must sometimes scramble to secure adequate insurance coverage from other providers.
Transportation Insurance: The Cornerstone of Risk Management
Every mile traveled by commercial trucks represents an exposure both avoidable and unforeseen risks. From an insurance perspective, these risks can be substantial. Imagine you were the owner of a commercial freight carrier, and one of your vehicles were to become involved in a collision that resulted in property damage, bodily injury, and liability claims. Are you prepared to pay for these expenses out of pocket?
Special risks insurance brokers specialize in developing insurance solutions that protect transportation business interests and their assets. Transportation insurance often includes several parts, such as:
- Primary liability coverage
- Physical damage coverage
- Cargo liability coverage
- Non-trucking liability coverage
- Occupational Accident coverage for owner operators
Transportation insurance is the foundation upon which risk management programs are built. With suitable insurance protection in place, transportation companies can rest easy, knowing that their equipment, financial assets, and personnel are safe from the losses associated with liability claims. ◼
What it Means to Insure Financial Institutions
September 4, 2018
Financial institutions face unique risks in their daily operations – risks that many other business types simply do not experience. Because of intense regulatory scrutiny, financial institutions must have in place rigorous risk management protocols, including information security strategies as well as specialized liability insurance. Special risks insurance brokers work with these financial firms, helping them to develop insurance plans that protect assets from the losses associated with property damage, data breaches, negligence, and legal claims.
Typical Risks in the Financial Industry
Increasingly, financial institutions depend on computerized data to extend services to their clients. Information technology has transformed the way these institutions do business, from electronic transfer of assets to personalized financial services using cloud computing strategies. Data breaches, including the loss or theft of personally identifying information, has become one of the leading risks financial firms face.
There are several other unique risks that financial institutions must take into account when choosing risk management and insurance protection. These include:
- Lenders Liability claims revolving around wrongful foreclosures
- Claims regarding unfair, discriminatory, or predatory loan practices
- Errors & omissions claims from the administration of trusts
- Risks to directors and officers of the firm from shareholder actions
- Derivative claims
- Claims against regulatory non-compliance
- Disclosure claims, particularly in misleading, inaccurate, or falsified financial reporting
- Liability claims arising from physical loss or damage of assets, including assets stored in safety deposit boxes and during transfer between locations
When presented with these varied risks, it becomes clear that insurance solutions must be tailored to the unique risk exposures of each financial institution, and that one-size-fits-all insurance packages may not be sufficient to protect against unforeseen risks faced by certain organizations. Special risks insurance brokers with industry knowledge are an invaluable resource when financial institutions need to protect their assets and the assets of their customers from loss.
The Components of Financial Institution Insurance
Now that we have a clearer understanding of the types of risks a financial institution may face in its operations, it can be valuable to break down the insurance categories to protect against those risks. The first component of insurance solutions for financial institutions is property insurance, which is designed to provide financial assistance in the event of loss or damage to the firm’s physical assets. Losses can arise from unpredictable natural disasters like hurricanes or tornadoes, referred to as “catastrophic perils”, or from man-made or predictable losses such as acts of terrorism, vandalism, or fires, all of which fall under the “non-catastrophic perils” category. Commercial property insurance may consist of named perils policies, all-risk policies, or hybrid commercial packages that include liability and property risk management aspects.
Cyber liability insurance is the next critical part of financial institution insurance. This specialized form of insurance protects against the losses associated with data breaches/thefts, and provides financial assistance for notifying customers about data breaches, recovery of lost or damaged data, and the legal fees associated with claims against the financial institution.
Professional liability insurance coverage is the next and final component of a comprehensive insurance solution for financial firms. This liability coverage can take many forms, including:
- Management liability
- Directors and Officers (D&O) liability
- Fiduciary liability
- Employment practices liability
- Errors and Omissions (E&O) liability
With these insurance components in place, financial institutions are able to protect their assets, their personnel, and their customers. Special risks insurance brokers have a thorough understanding of the varied risks and exposures financial institutions must deal with as they do business. Financial institution insurance is a critical aspect of a comprehensive risk management plan, and with this insurance protection, covered firms can continue to provide services to their customers. ◼
The Most Common Occupational Hazards on Film Productions
August 30, 2018
Film and television production sets are often chaotic places, with dozens or even hundreds of people working together to create a memorable shot. Film sets typically include heavy set pieces and props; in a recent production for the iconic Star Wars franchise, a set piece dropped on actor Harrison Ford’s leg, breaking it and requiring him to sit out eight weeks of filming to recover. On-set injuries are unfortunately very common and can go under-reported or unreported altogether. Film production insurance is one way that filmmakers can protect the assets of their production companies as well as their staff and cast members against the losses resulting from injuries. We’ll take a look at common occupational hazards in the film production industry and illustrate how specialty insurance can help mitigate the risks in this dynamic and challenging field.
Occupational Hazards in Filmmaking
Injuries to film production crews are shockingly common. Staff members must often juggle heavy equipment and props to deliver the visual look and feel directors seek. Cast members can be at risk, too; Harrison Ford’s leg injury is only one of dozens of such on-set accidents. In the early days of Hollywood’s filmmaking period, injuries and deaths were extremely common. In fact, during a five-year period ending in 1930, 55 people were killed and almost 11,000 others were injured during film productions. Safety standards have dramatically lowered the instances of injuries or deaths since those days, but have not eliminated the risks.
While statistics on film production injuries in more recent years are hard to come by, it is estimated that between 20 and 40 people are severely injured or even killed each year during the production of a film. This figure is made even more alarming by the fact that annual mining accidents and injuries/deaths in the U.S. law enforcement community are lower than those in the filmmaking industry.
Common injuries in film production include:
- Tripping hazards (cables, wiring, and ropes on sets)
- Injuries from pyrotechnic effects, including explosives and incendiary devices
- Vehicle crashes, particularly in the use of helicopters for filming sequences
- Electrocution hazards
- Falling equipment and props
- Insufficient or non-existent safety equipment on-set
The filmmaking industry is saddled with tight production schedules and budgetary concerns, sometimes negating the safety and welfare concerns of those involved in the production. As movie-going audiences demand bigger thrills and bigger effects, production companies see an increase the potential for an on-set incident that results in a serious injury or death of one of the members of the production.
Film Production Insurance: A Risk Management Staple
Film and television production firms have long relied on some form of entertainment insurance to help protect against the losses arising from producing their works. Film production insurance covers the unusual and unique risks associated with filmmaking, helping production companies to protect their assets and personnel when an incident occurs. This specialized insurance has many components, which includes coverage for Cast, Negative & Faulty Film (HD Video included), Props, Sets, Wardrobe, Miscellaneous Rented Equipment & Owned Equipment, Extra Expense and Third Party Property Damage.
Comprehensive insurance policies offered by leading specialty insurers like U.S. Risk often include third-party property damage coverage, commercial general liability protection, and errors and omissions coverage for producers, developers, and directors, the cornerstones of a successful film or television production. Workplace injuries remain common in all markets, but the added expenses of a serious injury or death during a film or TV production cannot be understated. With adequate insurance coverage in the form of film production insurance, production companies can ensure that their assets are protected from loss. ◼
How Film Productions Can Avoid Copyright and Other Suits
August 28, 2018
The world of film production is a chaotic one, with millions of dollars in budgets for individual film projects, thousands of cast members and behind-the-scenes staff, and seemingly endless sources of liability. Movie and television producers have had to fight claims of copyright violation and many other types of lawsuits over the years, and the rate of these lawsuits is only increasing. As a risk management tool, entertainment industry veterans know the value of film production insurance, protecting the employees and assets of film production companies against the losses associated with liability claims. In this guide, the role of fair use and copyright in filmmaking will be illustrated, providing insurance agents with the information they need for their entertainment industry clients to make smart decisions and to avoid potential legal issues.
Copyrights, Trademarks, and Fair Use
To gain a better understanding of potential liabilities in the filmmaking industry, it is important to be clear about three of the major concepts in production: copyright, trademarks, and fair use.
- Copyright: Legal protection for any created work (literary or artistic) and the creators of those works. Copyright covers movies, books, technical drawings, scripts, computer software, advertising copy, and nearly any other work imaginable.
- Trademarks: Words or symbols established by a company or organization that identifies the products and services of the organization and helps differentiate the organization from others. Trademarks can be single or multiple words, distinctive coloring and design (“trade dress”), or unique symbols. These trademarks are protected by legal registration.
- Fair Use: The concept of granting limited use of copyrighted material without first receiving permission from the copyright holder. For filmmakers, fair use covers aspects such as commentary, parody, and education under certain guidelines. Fair use law is complex and may or may not be used as an affirmative defense in cases of legal claims.
Regardless of the nature of a film or television production, due diligence is the key to avoiding legal claims of copyright or trademark violation. Fair use laws may not be sufficient in protecting the film production company from legal challenges; it is a good practice to consult with attorneys familiar with copyright and fair use laws when any questions arise about the use of potentially copyrighted material in a production.
Protecting Assets with Film Production Insurance
Specialized risk management protection in the form of film production insurance is available for filmmakers and the companies associated with these productions. The film industry is faced with many unique risks; providing coverage against those risks represents a significant but not insurmountable challenge. For filmmakers, professional liability insurance, sometimes referred to as media liability insurance, is a common solution. Film production insurance provides coverage for production companies, their personnel, and their assets, allowing them to continue operation even if required to defend against legal claims. This insurance is a valuable and critical investment for film and television producers. ◼
The Legalities of Temporary Staffing
August 14, 2018
In the world of employment, there are many choices for workers and employers alike. Different classes of employees fill roles in a wide variety of occupations. For those looking for seasonal work or cannot commit to a long-term employment relationship with a company, temporary staffing is a viable option. Unfortunately, laws designed to protect employees and employers from liability issues do not often cover temporary employees and the firms used for temporary staffing services. U.S. Risk Underwriters has worked with temporary staffing agencies across the country, helping those companies mitigate their unique liability exposures with our StaffPak program, offering solutions custom-tailored to the needs of each client.
Temporary Staffing Considerations
Sometimes referred to as “temps,” temporary employees are often used to stand in for those full-time employees that are on extended leave, such as for injuries or maternity leave. Temps are also used to fill gaps in a given company’s workforce due to seasonal fluctuations, and may be expected to perform a wide range of tasks. Companies sometimes hire their own temp employees, or may utilize the services of a temporary staffing agency. Using temps is typically less expensive than hiring regular employees, as temporary staff are not usually eligible for company benefits that full-time employees enjoy.
Temporary staffing agencies sometimes offer minimum essential coverage and other benefits to their temp staff, but this is the exception and not the rule. Because temporary employees do not receive the same protections and benefits as full-time staff, they are often the first to go when a company reduces its workforce due to changing market conditions. The tenuous employment status can be difficult in terms of job security, but this employment arrangement can still be valuable, particularly for younger people looking to gain work experience.
The risks associated with temporary staffing are many, and can impact the operation of temporary staffing agencies and the companies that utilize their services. In some states and on the federal level, companies that hire temporary employees may be challenged by discrimination and harassment claims. The staffing agencies that provide temp employees may also be at risk from claims of employee rights violations and discrimination arising from:
- Sexual orientation
- Civil rights
In 2014, the state of California passed a new employment law that increased the liability for employers that use temporary staffing agencies and labor/workforce contractors. In the law, employers share civil legal liability with labor contractors and staffing agencies for all workers supplied under the auspices of third-party staffing services. Similar laws were passed in other states, changing the legal landscape for many staffing agencies across the country.
Temporary Staffing Insurance
U.S. Risk Underwriters, one of the nation’s leading providers of business-oriented comprehensive insurance solutions, knows that third-party labor contractors and staffing agencies need liability protection. By working with major insurance carriers, the firm has been able to help insurance brokers meet the risk management needs of their clients. The firm’s products are designed to be custom-tailored to the unique needs and risks of the temporary staffing industry, and are backed by over 20 years of industry knowledge and experience. Our StaffPak program offers comprehensive coverage custom-tailored to the temporary staffing industry.
Temporary staffing insurance typically provides robust risk management options, protecting third-party staffing agencies from the liabilities associated with placing temporary employees in jobs. Policies can include workers’ compensation programs, protection against losses arising from contractual employer liability claims, and placed employees/contract workers coverage under broad general liability insurance protection. These insurance solutions often include employment practices liability coverage, a critical component of protection for staffing agencies and labor contractors alike. With the right insurance products, temporary staffing agencies can continue operations while protecting their assets from loss due to liability claims and litigation. ◼
Best Practices for Minimizing Risks at Large Events
July 26, 2018
Every year, millions of people attend large events ranging from music festivals to performance art shows, sporting events, fairs, and concerts. The overwhelming number of these events are conducted without issue, providing entertainment and enjoyment in a safe, welcoming environment. However, several highly publicized incidents of violence at public events in recent years have highlighted the need for event planners and venue owners to prepare for worst-case scenarios. Much planning goes into providing security for large events, and to minimize the potential risks, event planners must make security considerations their primary focus. Entertainment insurance is one of several components that help to minimize the risks associated with events; coupled with strong security and careful planning, these events can continue to be enjoyed by millions of attendees.
Security Considerations for Large Events
Preparing to host a large event at concert halls, outdoor venues, or stadiums begins with security planning. As with any aspect of event hosting, there are best practices that can be implemented to ensure the safety of attendees. Event promoters and venue owners have an obligation to provide a safe experience. By learning from past lessons and by adhering to industry best practices, liability risks are greatly reduced.
Some of the leading security best practices include:
- Continual and Constant Vigilance: Event security begins long before the event starts and does not end until attendees have left the venue. Attackers may target crowds as they exit a stadium or concert hall, necessitating that security staff remains vigilant even after the show is over. Screening of people entering the venue also helps to ward off potential issues, even before the event has begun.
- Outside Security: Many event venues have solid interior security plans in place, but there are times when outside security is not as robust. In these cases, attackers may choose to target crowds as they enter or exit the venue, or where crowds gather before or after the show. Placing security personnel in parking lots, mass transit stations, and other areas where crowds gather is a smart move. Keeping crowds smaller by separating functions (merchandise sales, taxi/bus pickup areas, entrance and exit queues) can also reduce the potential for an attack.
- Security Visibility: Visible and robust security is the key to preventing a potential attack. While mandatory bag checks and no-vehicle zones are obvious deterrents, even simple aspects like providing uniforms for security personnel can improve the visibility of security measures. Clearly-marked magnetometer stations at all public entrances can also prevent perpetrators from entering with weapons and provide a visible deterrent.
- Layers of Security: Large event venues and experienced event planners know that security personnel are only part of the overall security picture. The leading security professionals employ layers of security, from traffic control to remove surveillance, wanding or magnetometer screening, bag checks at entrance points, and in-facility monitoring. Put together, these layers provide a more robust security posture, deterring potential attackers before tragedy can strike.
- Communication with Event Attendees: As mentioned earlier, security begins long before the event takes place. One proactive approach to avoid potential issues is to communicate with event attendees via ticketing information, social media campaigns, and television/radio broadcasts in advance of the event. Communication can include information on prohibited items and security measures that will be in place during the event, helping to minimize crowding at entrance checkpoints and reducing the number of attendees bringing in items that they cannot have in their possession.
Entertainment Insurance as a Risk Management Tool
Even at events where security is robust, attacks can occur. A suicide bombing at a concert in Manchester, United Kingdom and the tragic shooting deaths of nearly 60 people at an outdoor concert in Las Vegas, Nevada in 2017 hammer this point home. At large events, when an attendee becomes injured or killed at the hands of a violent perpetrator, many parties may be held liable. In lawsuits filed by injured people or their surviving family members, parties like the event promoters, the venue owners, or even the performers may be named as liable parties. Defending against lawsuits can be extremely expensive, racking up thousands or even millions of dollars in legal fees and settlement payments.
Entertainment insurance is a logical way to reduce liability exposures for the parties responsible for putting on large events. This insurance typically includes general liability coverage as well as professional liability coverage, and may include provisions to provide coverage for terrorist acts and violence at the event. Insurance agents should carefully consider the potential risks of hosting a large event, then guide their clients to select the right event insurance to provide risk mitigation. Event liability insurance protects the financial assets of those tasked with promoting, hosting, and conducting large events by covering against foreseeable and unforeseeable threats. ◼
The Importance of Contingent Liability Insurance
July 24, 2018
Business owners face many risks in the day-to-day operations of their companies. Risk management is a crucial part of any company’s operation, and liability issues can impact a company’s ability to continue doing business. Among general liability exposures faced by business owners, the concept of contingent liability is one that requires specialized risk management. Contingent liability insurance plans, including occupational insurance, are ways that companies can minimize their risk exposure.
What is Contingent Liability?
Contingent liability, sometimes referred to as indirect liability in the insurance industry, is defined by the International Risk Management Institute as coverage for losses to a third party for which the insured is vicariously liable.
In other words, the owner of a given company can be held liable for incidents resulting in personal injury, property damage, or advertising/business injury, even if that company owner was only indirectly involved. This situation can arise when a company uses contractors, subcontractors, or agents to carry out duties, and both the company owner and the party primarily responsible for the injury or damage can be held liable.
An example of contingent liability is when a major corporation hires a building contractor to construct a new office tower. During construction, negligence or unsafe conditions on the part of the building contractor leads to an injury incurred by construction site passerby – an injury occurring from such conditions as falling debris, slippery walking surfaces, or unmarked hazards. The injured party may file an insurance claim or lawsuit against the negligent building contractor, but the corporation that hired the contractor may also be held liable. While there are mitigating factors in terms of liability, this indirect risk exposure represents a potentially expensive defense, leading to the company suffering severe financial impacts and loss of business as a result of legal fees and settlement payments.
The Role of Occupational Insurance
Occupational insurance, particularly occupational accident insurance, is a contingent liability insurance policy designed to provide insurance coverage benefits to employees that are not covered by traditional workers’ compensation policies. This can include independent contractors or agents of a company.
Employers may choose this coverage for several reasons; for example, this insurance may be seen as an alternative to workers’ compensation – in several states, employers may choose to opt out of state workers’ compensation laws. If the company opts out, it is still legally obligated to those employees that may become injured or killed in the workplace. Occupational accident insurance is typically less expensive than a worker’s comp policy.
Contingency liability insurance, including occupational insurance coverage, can provide more flexibility than workers’ compensation policies as well, allowing companies to make choices like:
- Limits of liability per accident
- Amount of death benefits to provide
- Level of disability coverage
- Deductible limits per accident
Companies may also choose excess liability coverage if it is felt that the limits on the regular contingency policy are insufficient to cover potential risks. ◼
Who Stands Liable for Concert or Event Injuries?
July 19, 2018
Around the world, millions of people attend events like concerts, music festivals, fairs, and theater performances. The overwhelming majority of these events take place without incident, but there have been times when tragedy makes an appearance. Highly publicized incidents of violence, such as the music festival shooting in Las Vegas in 2017 and a concert suicide bombing in Manchester, United Kingdom the same year stand out in our minds. Concert and event goers have an expectation of safety when attending events, and when an incident occurs, there is often confusion as to which party is liable for the injuries or deaths sustained as a result of the incident. To minimize exposure for concert promoters, event venue owners, and performers, concert insurance represents a smart investment, protecting against financial burdens associated with liability issues.
Liability in Concerts and Public Events
Events such as music festivals and concerts are generally safe, but anytime there are a large number of people gathered, there exists the possibility of injury. There are numerous ways that a concert attendee could become injured, including:
- Violence on the part of attendees or intruders
- Failure to control crowds
- Inadequate security considerations and personnel
- Failure of or defective equipment (lighting, ventilation, fire suppression)
- Unsafe venue conditions
- The actions or inaction of performers and/or event staff
When an event attendee is injured, he or she may file a lawsuit, claiming that one or more parties were responsible for the injury. Injury lawsuits may target the liability of performers, security, and event venue owners. Concert promoters are often named as liable parties in injury lawsuits. Even third-party vendors, such as food and beverage providers, pyrotechnic vendors, and equipment manufacturers can be named as liable parties in a lawsuit.
Unraveling which party is actually responsible when an injury occurs can be a confusing, challenging process. Unless there is clear-cut evidence, such as negligence on the part of a venue owner or a glaring lack of security personnel, injury lawsuits can drag on for months, costing thousands or even millions of dollars in legal fees and expenses for the parties named in the suit. Naturally, this can have a devastating financial effect on the parties forced to defend themselves in litigation.
Concert Insurance to Manage Risks
Risk management is the cornerstone of business operations, and in the case of concerts and other public events, concert insurance represents a sound investment to protect against risks. Concert insurance can take many forms, and is often carried not only by venue owners and event promoters, but often the performers themselves. Such insurance policies typically cover a wide range of liability issues, and serve to protect the financial interests of the parties involved in the production of a concert or other event. By covering common risks associated with events, the named insured parties are able to protect against financial burdens imposed by litigation, including legal fees and settlement payments. ◼
What to Know About Insuring Subcontractors
July 17, 2018
In the building and construction industry, general contractors often rely on the specialized services provided by subcontractors. Subcontractors typically handle aspects of construction projects like plumbing, electrical, and finish work, among many other components. General contractors carry the weight of liability in construction projects, and commercial liability insurance is a vital part of risk management.
What about the risks associated with subcontractors? Should subcontractors carry their own general liability insurance, or are they covered by the general contractor’s policy? In this guide, we present common concerns and aspects of insuring against risks, with information about U.S. agencies insurance policies designed to protect against liability claims for contractors and subcontractors alike.
Contractor vs. Subcontractor Insurance: Concerns
There are several concerns associated with insurance coverage in the construction industry. Typically, general liability insurance, either standalone policies or as part of a Business Owner’s Policy (BOP), provides liability protection from issues arising with subcontractors. Unfortunately, many policies also contain exclusions, particularly for independent contractors. In some work arrangements, subcontractors are seen as independent, and may therefore not be adequately covered under the GL policy the primary contractor holds.
Risks associated with subcontractors can vary between high frequency/low severity claims and lower frequency/higher severity claims. The primary contractor’s exposure varies as well. An example of a high frequency/low severity claim would be defects in construction, typically revealed as the project reaches completion. Claims arising from construction defects are unfortunately rather common, and can cost the contractor thousands of dollars in legal fees and settlement payments if a lawsuit is successful.
An example of a low frequency/high severity claim would be a major failure of a system installed by a subcontractor, such as a building’s heating, cooling, and ventilation (HVAC). In a large commercial building, an HVAC system may be a multimillion dollar subcontract. Defending against such claims can be very expensive – even into the millions of dollars. Without adequate insurance that covers risks for both contractors and subcontractors, the financial assets of the primary contractor can be in jeopardy.
One other concern that affects the contractor/subcontractor relationship is the general liability policy terms. Some GL insurance carriers may view the use of an uninsured subcontractor as part of the insured contractor’s company, and therefore may have the right to raise premiums. In other words, even if there isn’t a claim against work performed, the primary contractor may have to spend thousands of dollars in premiums for a subcontractor that should have obtained their own insurance coverage.
Finally, issues surrounding workers’ compensation insurance may arise. In many states, workers’ comp guidelines require that independent (1099) contractors be covered under the primary contractor’s workers’ comp policy. To mitigate those risks, many contractors require their subcontractors to carry their own workers’ compensation insurance before agreeing to a work arrangement.
The Role of Subcontractor Insurance
Because of the risks associated with subcontracting major parts of a construction project, general contractors must carefully weigh their own insurance options. As mentioned earlier, GL policies often include some form of coverage for subcontractors, but exclusions may apply.
In simple terms, subcontractors need to have their own insurance coverage in order to manage the risks of loss associated with the work those subcontractors perform. Many U.S. agencies insurance policies are designed to mitigate loss risks arising from lawsuits and associated legal fees and settlement payments. And, in today’s highly litigious society, many general contractors won’t work with subcontractors unless those entities have their own GL insurance coverage. Contractors wish to protect their assets from loss, and a poorly-insured subcontractor poses a significant risk. Subcontractors are an important part of the construction industry, handling specialized tasks that general contractors may wish to farm out. The subcontracting model is often more cost-effective in large construction projects. Regardless of the arrangements and the work performed, it is critical that contractors maintain adequate general liability insurance to protect against loss. Smart contractors will also require all subcontractors to carry their own policies, further protecting the financial assets of both entities against losses arising from litigation. ◼
The Co-Employment Risk for PEOs
July 12, 2018
Across the country, more and more companies are turning to staffing agencies for their hiring needs. It is estimated that 16% of all small- and medium-sized businesses in the United States outsource some or all of their human resources capabilities to staffing agencies or PEOs.
PEOs take on many of the personnel risks of the client – in this case, the business owner with whom an employment services contract is made. StaffPak insurance is a critical component to protect not only the PEO’s financial assets, but also its clients and employees. Co-employment risks are not to be overlooked, and in this guide, we will share several best practices to establish a solid risk management plan for these agencies and the companies which rely on their HR services.
What is Co-Employment?
Co-employment is defined as a contractual relationship between a professional employment organization (PEO) and an end client. This contract allocates and shares certain employer-related responsibilities, such as payroll and withholdings, some manner of direction and control of employees, and handling of employment taxes. The contract is typically referred to as a client service agreement. In simple terms, this contractual agreement outsources HR duties to the employment agency.
There are risks associated with the co-employment model. The agency takes on employee-related risks on behalf of its clients, including workers’ compensation claims, workplace injuries, and general liability issues. In addition, co-employment can be seen as an employment relationship between workers and two or more specific employers for one given work situation. Co-employed people are often seen as temporary workers, and this can create confusion as to which organization is ultimately responsible for the worker’s own employment issues.
Managing Co-Employment Risks
The first step in mitigating risks associated with the co-employment model is to have a solid client service agreement (CSA). The agreement must carefully spell out all employer rights, responsibilities, and risks, helping to eliminate work status confusions and to clearly state which organization is responsible in liability claims.
To further eliminate confusion and misunderstandings between employer agencies, employer clients, and employees, many companies prefer to make the agency the primary employer. In other words, all HR-related employment duties are transferred to the staffing agency, including recruitment, termination, health care coverage, salary negotiation, and employee screening practices.
Companies wishing to utilize staffing providers must select an employment agency that has experience and knowledge of all applicable labor laws, including workers’ compensation issues and requirements. This can help ward off some of the specific risks associated with co-employment. To choose the right agency for staffing, clients should evaluate the services that provider offers. These can include:
- Regular employee reviews
- Thorough pre-screening of potential employees, including criminal background checks and financial evaluations.
- A strong track record of enforcing clients’ internal policies and practices regarding employment status.
- Complete recording, tracking, and submission of tax-related information, including end-of-year W-2s.
- Expense tracking, including time management functions
- The availability of PEO-offered employee benefits
- Avoiding PEO/staffing providers that utilize independent contractors (1099 employees)
Staffing Insurance in Risk Management
With the unique risks associated with staffing agencies, specialized staffing insurance is critical in mitigating those risks. This type of insurance insurance serves to provide coverage against many aspects of co-employment practices; when HR and employee status duties are shared between organizations, liability risks can further complicate an already-challenging environment.
Our StaffPak staffing insurance provides a range of coverage types, including:
- Errors and omissions
- General liability
- Employment practices liability, particularly protection for violations of the Americans with Disabilities Act, Civil Rights Act, and Equal Pay Act, among others
- Excess coverage including employee benefits liability
As a best practice when working with staffing clients, it is imperative that insurance agents speak frankly about the potential risks they face in taking on HR duties for their own clients. While there are many types of staffing agencies and agreements between those agencies and their end clients, risk management is a vital part of the overall picture. ◼
No-Shows: Why Entertainment Insurance Is Necessary
June 28, 2018
It takes a lot of effort and creativity to arrange entertainment events such as concerts, films or plays. That’s why decision-makers need comprehensive insurance on their side should the event need to be canceled due to natural disaster, illness, or a man-made tragedy.
Many event planners and professionals in the entertainment industry are not aware that specialized entertainment insurance exists, or they are under the impression that it is an optional coverage that does not cover anything that is not already covered by standard commercial general liability or property insurance policies. However, for many specific exposures, including no-shows, entertainment insurance is the most important policy, and as an insurer, it is important that you ensure that your clients are aware of this.
When a pop star becomes ill or suffers a personal tragedy, they make headlines for canceling their impending show. But the truth is that there are so many reasons why a show may need entertainment insurance besides the most famous ones. It not only covers standard threats, but also events such as copyright infringement, breach of contract, and slander. If the venue is sued for any reason, they may need to rely on entertainment insurance to cover the full cost of the suit. Major events usually aren’t even allowed to take place unless they’re covered by some type of policy.
The Scale and the Expense
Depending on the nature of the event, making any changes to a large-scale can be exceptionally expensive. Hundreds of people can be affected even in the case of a simple one-day postponement. One famous cancellation that ended up costing many millions of dollars involved the pope breaking his leg. Without the help of the right entertainment insurance policy, the church would have had to pay the majority of the claim. Because every event has different parameters and expectations, policies can be customized to address common and uncommon liabilities alike. Those who get the minimum coverage may still find themselves overwhelmed by the costs when the dust finally settles.
Finding the Right Policy
The right entertainment insurance policy can give people a little peace of mind when they see that rain is predicted for their event, or hear a rumor that the lead singer of the band may be coming down with a case of laryngitis. Professionals have the option of choosing either short-term or annual production insurance, depending on the nature of their work. Short-term is typically designed for one-day events, while annual insurance can cover multiple projects for a full year. While there may be two major types of insurance though, professionals will have a wide array of choices and clauses they can use to fully protect their events.
For many clients, the right entertainment insurance policy often comes from a specialty expert rather than a general insurer. U.S. Risk coverage managed by industry leader Take1 provides a comprehensive and cost-effective all-lines insurance program for live and non-live entertainment productions including sporting events, concert and playhouse venues, film and television productions, and entertainment tours, among others. ◼
The Laws and Restrictions That Every Music Venue Must Follow
June 26, 2018
Running a music venue might sound freeing, but a few laws and regulations permit the age-old, long-hair-don’t-care environment. If you’re an insurance agent seeking policies for your music-loving client, you should understand the ins and outs of music venues, first. Running a live music venue takes time, dedication and a deep understanding of the law. Between alcohol, age restrictions and liability, the rules themselves might seem a little overwhelming.
Below are the laws and restrictions venue hosts need to know—helping you, the agent, better understand your client’s needs.
Once a venue gets its liquor license, it needs to be careful about who it sells alcohol to. A venue which serves to minors—even accidentally—is in store for large-scale penalties. This does not necessarily mean that the venue needs to be the one who’s served the minor.
If a minor is found on the venue’s premises consuming alcohol—even if the alcohol was given to them by a friend—the venue can be held liable. Minor-related alcohol penalties usually stem from compliance checks conducted by local law enforcement.
Show Age Restrictions
Every venue owner should calculate whether to restrict a show by age. If everyone at a show is over the age of 21, underage drinking becomes less of a problem. In general, a lower-age event results in more liability. Deciding how to cap age, in essence, will also determine each event’s audience pool as well as its potential profit margins.
Every venue needs to have a permit specifying its maximum legal capacity. This limit helps customers, law enforcement and venue administration alike determine a venue’s safety in regards to its overall space. In the event of a fire, flooding, crime or other emergency, law enforcement will check to see if the venue was adhering to its legal capacity limit. An entertainment insurance policy can defend a venue’s owners if any property damages occur, but if the venue exceeds its legal capacity they may end up paying the price.
Opening and Closing Requirements
A venue must have a specified opening and closing time. In addition, it must be fully staffed before its opening day. Different types of music venues, of course, have different staffing needs. For example: Concert venues need to have security personnel, sound engineers, lighting engineers and bartenders. A small corner-room-style venue, meanwhile, doesn’t necessarily need all the support.
Finally, a music venue should be mindful about noise disturbances. Beyond alcohol sales, safety concerns and maximum capacity, noise disturbances should be of primary concern. A venue operator needs to understand the location’s noise requirements, assuring that the venue doesn’t surpass reasonable noise levels.
The road to establishing a memorable music venue might seem long, but the journey is worth it. Make sure your clients understand the ins and outs of their venue’s legal needs, and outfit them with the protection they—and their guests—deserve.
For music venues and other operations in the entertainment industry, the best insurance program to address their specialized risk profile would come from a specialty expert rather than a general insurer. U.S. Risk coverage managed by industry leader Take1 serves the insurance needs of the film and television production industry as well as audio-video and communications industry clients including concert and playhouse venues, touring entertainers and specialty rentals, among others. In the entertainment industry, anything could happen to affect an event, and clients should ensure that they have the right protection. ◼
The Biggest Risks for Staffing Agencies During the Hiring Process
June 21, 2018
Professional employer organizations (PEOs), commonly referred to as staffing agencies, are increasingly responsible for the staffing needs of diverse companies. Industry analysts suggest that 16% of small businesses utilize these agencies for employee management tasks, effectively outsourcing human resources duties. There are many risks associated with running another organization’s staffing processes, both from the client side as well as from employees.
It is important that these organizations look to specialized staffing insurance to help manage those risks.
Common Risks in Staffing Operations
No matter whether a staffing agency hires employees on a temporary or contract basis or handles permanent employment recruiting and retention for clients, it is critical to understand that the agency takes on the liability for those employed clients. The risks associated with staffing are many, and include:
- Not securing the right insurance: During the hiring process, failing to obtain insurance for the staffing agency represents a giant risk. Agencies handling hiring for clients are responsible for claims from both the candidates they’re managing as well as their clients. Most states require some form of insurance, and forgoing this crucial component can result in severe client liability issues as well as in penalties and fines from state regulators.
- Skipping employee screening processes: To protect their interests and those of their clients, PEOs typically screen potential employees for a range of risks, including potential for injury risks. Verification of prior employment, drug screening protocols, and vetting processes cannot be skimped on; failure to properly and thoroughly vet potential employees opens the door to future liability issues.
- Issues with independent contractors and consultant: Many agencies work with independent contractors or independent consultants. Contract issues with these personnel can represent significant risks if the PEO has not established solid agreements about staffing at third-party work sites. These agreements can include non-disclosure or confidentiality clauses as well as exclusivity clauses that may help to prevent misunderstandings between clients and consultants.
- Payment issues: Payroll is one of the largest risks a PEO will face doing business with clients. Not all contracted work sites will pay at the same time, and may not even pay promptly. Establishing clear and rock-solid payment terms is one way of managing this risk, as is secure payroll financing options where PEOs can ensure that the agency has the cash it needs to meet all payroll obligations.
StaffPak Insurance: Mitigating Risks with Valuable Liability Protection
It is clear from the above look at potential risks in PEOs that risk management is an important part of the operational picture. Simply put, staffing agencies need adequate insurance to protect their own financial interests as well as those of their clients. Insurance agents need to stress the importance of accounting for risks in the PEO operational model, and offer comprehensive insurance programs to provide coverage against those risks.
U.S. Risk is the preferred insurance partner for the staffing and PEO industry, having developed end-to-end insurance solutions over the past twenty years. A quality PEO insurance policy has many components, each working together to protect against liability. Our StaffPak program includes coverage for:
- General liability
- Employment practices liability, including discrimination, medical leave, and civil rights violations
- Errors and omissions
- Excess liability
With the right PEO insurance plan, staffing agencies are covered against the risks that could severely impact their ability to continue operations. From employee injuries to workplace errors made by contracted employees, business interruption, and many more potential risks, this insurance is a vital part of the staffing agency risk management strategy. ◼
Occupational Accident Insurance Could Be the Answer in the “Gig Economy”
May 24, 2018
The workplace in America has shifted in recent years. What used to be a fairly straightforward organization of employers and employees has transformed to a large degree toward on-demand workers coordinated by employers, staffing management agencies, and online entities. This type of work organization is often referred to as the “gig economy”; workers being paid by job rather than receiving an hourly wage, or workers that log into an online app or platform to conduct their work. In some cases, these employer/employee arrangements can lead to significant hurdles when it comes to a business protecting both its assets and its employees from liability claims.
In traditional workplace environments, workers’ compensation insurance may be required by state or local law. This type of insurance program is usually state-administered and is designed to cover the employee’s costs associated with lost wages and medical expenses arising from a workplace injury. In the gig economy, many such workers are classified as independent contractors, eliminating them from the coverage and benefits afforded to them by workers’ compensation insurance as they are not considered direct employees of a given company.
General liability insurance (GLI), such as that held by staffing companies, covers liabilities associated with injuries and/or damage to workplace buildings and equipment. This insurance is designed to protect against third-party claims, and does little if anything to compensate workers for on-the-job injuries.
Occupational Accident Insurance, or OAI, is a potential solution. This specialized type of insurance policy is not often required by law, yet it provides both employer and employee with certain levels of financial protection in the case of workplace accidents and their associated injuries. Employees covered under plans of these type can include traditional company employees as well as independent contractors or those employees managed by a staffing company. OAI is a standard for many industries that use contractors for workplace duties, including trucking companies, manufacturing facilities, and delivery services, to name only a few.
Benefits of Occupational Accident Insurance
As another layer of protection for employers and employees alike, Occupational Accident Insurance (OAI) offers several benefits. OAI plans typically cost less to implement and administer than workers’ compensation insurance plans, and can allow the employer to set coverage limits for individual employees (including independent contractors or piecework employees).
A typical OAI plan may include benefits that cover:
- Medical expenses associated with workplace injuries
- Accidental death
- Temporary or permanent disability
While the policies and terms of OAI are more complex than workers’ compensation insurance, they do offer more flexibility than many other types of worker insurance plans. A qualified insurance agent can help businesses determine their level of risk, their workplace configuration, and employee status to locate policies that meet the specific needs of each company. With occupational accident insurance policies, both employers and employees can enjoy protection against the losses associated with workplace accidents that result in property damage, injury, or even accidental death. ◼
How Live Music Venues Can Minimize Their Risks
May 22, 2018
Large events such as professional sporting events, live music concerts, and outdoor festivals draw hundreds of thousands of attendees each year. Event promoters and venues have an obligation to provide a safe experience for attendees, and despite their hard work in providing security and hazard-free conditions, incidents do occur. In the case of injuries and property damage, the venue and event organizers may be liable for the costs associated with these incidents.
Protecting Against the Unforeseen
Entertainment venues typically provide some measure of security for the premises, helping to protect guests from most foreseeable injuries. Because large crowds of attendees are expected at events like concerts and festivals, security personnel are responsible for crowd management, and may even be responsible for protecting against incidents that occur between participants, such as fighting and the potential injuries associated with them. Failure to control the crowd adequately, or failing to mitigate potential hazards, can raise the issue of liability on the part of the venue and its associated business operations.
No matter how careful the planning and how comprehensive the security and safety measures are, however, incidents that result in injury and property damage can occur. These are typically viewed as unforeseen events, and event liability insurance can help protect business owners from loss.
Premises and Event Liability Insurance
To protect their assets, live venues and the businesses associated with them must select the appropriate insurance. Premises liability insurance is one of many insurance types to cover the risks associated with hosting or providing space for live events. Premises liability is the principle that property owners, in this case the owner(s) of the venue, have some level of responsibility for ensuring the safety of event attendees. Event insurance protects a business’s assets from the costs associated with injury claims, negligence claims, property damage, and legal fees, depending on the individual insurance policy. Insurance agents that specialize in events and business insurance products can help venue owners and event promoters select the right policy to suit their specific needs and levels of risk.
When an event participant is injured through the actions of another, or through negligence on the part of the venue, the common approach is to file lawsuits on anyone and everyone the injury victim and his or her attorneys can identify as potentially liable. This can include property owners, artists, sports teams, and security personnel, among others. Of course, this “shotgun” approach can lead to significant financial obstacles for property owners and event promoters. Liability insurance products are usually designed to cover the legal fees associated with litigation. Some claims may be frivolous, and others may bear fruit in a court of law, depending on the circumstances behind the claims. Experienced insurance providers help event promoters and venue owners choose the coverage they need for both foreseen and unforeseen events, preserving the business assets from loss in liability claims. ◼
How Public Liability Insurance Differs from General Liability Insurance
May 17, 2018
Liability coverage is a specialized form of business insurance, designed to cover the policy holder’s legal responsibilities in incidents or events covered by the policy. Business owners in fact have two major types of liability insurance to select from: General Liability Insurance (GLI) and Public Liability Insurance (PLI). Each type has its own advantages, and the experienced insurance agents at U.S. Risk can help guide their clients in choosing the right type of policy for their unique business needs.
Public Liability Insurance
Public Liability Insurance, or PLI, is designed to protect business owners and their assets against losses associated with injury, property loss or damage, and other losses incurred by members of the public and/or third parties while on the business premises. This can include visitors to an office building, delivery personnel, and customers of a retail establishment. PLI is considered the “starting point” for most businesses, especially those that are retail- or public access-oriented and can be seen as a form of minimum business insurance coverage.
General Liability Insurance
General Liability Insurance, or GLI, typically covers a very broad range of potential legal issues for business owners. The language of the policy includes public liability coverage, or the coverage associated with a standalone PLI policy. This insurance is designed to protect against liabilities arising from defective products, workplace accidents, negligence, and injuries incurred by both employees and members of the public such as visitors to a business or its customers. A GLI policy may also cover payments for medical and legal expenses. GLI policies are often required by municipalities and states as a condition of granting a business operating license.
PLI vs. GLI
As with any contrast between two different types of insurance policies, there are strengths and weaknesses associated with PLI and GLI. PLI policies represent a minimum amount of liability coverage, covering the liabilities against public claims of injury, negligence, and accidents. As such, these policies tend to be relatively economical. However, these policies are limited in that they cover liabilities only for members of the public; PLI does not protect against claims arising from the business’s employees, investors, or vendors. Any expenses exceeding the coverage in the policy are the responsibility of the business owner.
GLI, in contrast, is more comprehensive in that such a policy protects against losses incurred by the public as well as vendors, employees, and even the business owner(s). These policies tend to be substantially more expensive than PLI policies, often putting them out of reach of small- and medium-sized business operations. The added expense means a superior level of coverage, however, covering most of the foreseeable losses and protecting the business’s assets in the case of a catastrophic event.
Many business owners may not understand the differences between the two, or even know that there is a difference. They will want understand which type of policy best fits the needs of their operation and its potential risks, and as their insurance agent, they will look to you to have the answers. ◼
What Goes into an Insurance Program for Entertainment Productions?
May 15, 2018
The entertainment industry faces many unique challenges as companies in this industry produce theatrical productions, films, and live-action events. The risks associated with the entertainment industry vary widely, requiring flexible and comprehensive business insurance policies designed to protect business assets from those risks.
Among those business insurance policies are those policies known as entertainment production insurance. In the entertainment industry, theater productions and movies, television shows, and live events depend on these insurance policies; in fact, many of these productions could not be made without a suitable insurance policy in place to protect the companies involved.
What is Entertainment Production Insurance?
The first entertainment production insurance policies were written to protect expensive film and movie production equipment from loss. Today, these policies encompass a broad range of protections, including film and television producers, directors, performers, equipment, property, and many other aspects of the industry. In simple terms, entertainment production insurance policies the parties and equipment responsible for practically every risk associated with producing entertainment, whether it is films, TV shows, or theatrical events.
Insurance underwriters often refer to this type of insurance as “E&O”, or Errors and Omissions, insurance.
There are many risks in the entertainment industry, from tangible risks like the potential for on-set injuries, property damage, and accidental deaths to more intangible risks like:
- Copyright infringement
- Defamation, slander, and libel
- Intellectual property loss
- Misappropriation of characters, ideas, and formats
- Privacy right infringements
- Breach of confidence
Most importantly, entertainment production insurance is designed to protect against liabilities arising from legal claims like lawsuits. Because every production is different, and each has its own unique risks and potential for liability, these policies are custom-tailored to the unique needs of each project.
Short-Term vs. Annual Entertainment Production Insurance
Film and television producers bear the brunt of risks when it comes to producing projects. When it comes to entertainment production insurance, it is useful to note that there are two major types: short-term and annual. In short-term production insurance, the policy covers productions project by project, for projects lasting as little as one day. Annual entertainment production insurance, on the other hand, is a policy designed to cover multiple projects and shooting schedules throughout a given year. This type is typically used by active production houses and busy producers who may be juggling numerous film or TV projects at once.
Selecting the Right Entertainment Production Insurance
Because entertainment production insurance is a specialized policy type, and because it may require flexibility in its coverage terms, it is critical to find the best information before purchasing a policy. Business Insurance companies like U.S. Risk work with thousands of retail producers and underwriters. Those insurance agents that specialize in these policies can help producers and related entertainment businesses select the right coverage for nearly any conceivable risk. ◼
Breaking Down the Differences Between Occupational Accident Insurance and Workers’ Compensation
May 10, 2018
Companies around the world strive to create safe, productive workplaces for their employees. Despite these initiatives, workplace injuries result in billions of dollars in lost wages and reduced productivity each year. To protect employees and employers from a financial perspective, there are several types of insurance. Among these are two primary types: workers’ compensation insurance and occupational accident insurance. On their surface, these two insurance plans may seem very similar, yet there are important distinctions between the two. It can be useful to understand the differences and to learn about the pros and cons of each type of insurance plan in order to better advise your clients, as they may not know the difference.
Workers’ Comp vs. Occupational Accident Insurance
To begin, let’s explore what workers’ compensation insurance (“workers’ comp”) and occupational accident insurance (OAI) are and how they work.
Workers’ comp is generally a state-administered insurance program that provides payments for medical expenses and lost wages if an employee is injured on the job and cannot perform his or her duties. This type of insurance covers ALL medical expenses, even those that may occur years after the injury-producing accident. In general, workers’ comp covers legal expenses and lost-income benefits as well.
Occupational accident insurance, or OAI, is an insurance option that provides both employees and their employers a certain level of financial protection in case of an injury incurred on the job. A number of factors go into the coverage amount, such as the perceived risks of employers and their workplaces. Unlike workers’ comp plans, employers may choose the coverage amounts and the deductibles of the plan. These plans cover medical expenses and lost wages only up to the coverage limits set in the plan’s policy.
Pros and Cons Between Insurance Plans
When comparing workers’ compensation insurance and occupational accident insurance, or any other type of insurance plans, there are certain strengths and weaknesses associated with each plan.
Worker’s Comp: Pros
- Employee medical expenses and lost wages are paid through the Workers’ Compensation system.
- Benefits are protected by a guarantor or guaranty association.
- Employees hold the burden of proof in an work-related injury lawsuit.
- Except in certain cases, workers cannot win lawsuit judgements for punitive damages or pain/suffering. This significantly reduces liability on the part of the employer.
- Plans are relatively simple – if an employee is injured on the job, coverage can begin almost immediately and without confusion.
- OAI plans typically cost the employer less than coverage under workers’ comp plans.
- These plans offer the employer the option to control or limit the amount of coverage for employees.
- OAI plans often have more flexibility than their workers’ comp counterparts, especially for the employer. Plans can include coverage for survivors benefits, temporary or permanent disability, or accidental death if the employer so chooses.
Workers’ Comp: Cons
- Typically, employer costs are higher than those associated with OAI plans.
- Under these plans, the employer bears the burden of proof in an injury lawsuit brought by employees.
- Employees can also win judgements for pain/suffering and punitive damages. These judgements may have certain limits. OAI significantly increases employer liability.
- If the injured employee’s medical and lost wage expenses exceed plan coverage limits, the employer is responsible for covering the remaining costs.
- Legal fees are generally governed by the terms of the OAI policy.
- OAI plans and their coverages are vastly more complex than workers’ comp plans.
Protecting Employers and Employees with Insurance
As illustrated above, there are significant differences between workers’ compensation insurance plans and occupational accident insurance. Each of these plans offer some measure of financial protection for employees injured on the job, as well as offering certain litigation protections for employers. Employers must carefully weigh the pros and cons of each plan before deciding on which policy to implement. ◼
Frequently Asked Questions in the Workers’ Compensation Claims Process
May 8, 2018
Workers’ compensation insurance is designed to provide financial benefits to workers who may become injured on the job. These benefits include payment for lost income, such as when an employee cannot do his or her work and/or when the employee is unable to work during recovery from the injury. Coverage of medical and prescription costs are also commonly provided in these plans. The idea behind workers’ compensation is simple, but the system itself is filled with challenges and confusion. This idea balances risk and insurance. Businesses often have many questions for their insurance carriers when it comes to establishing workers’ comp plans for their employees, and it’s important to have the answers they need.
Basics of Risk and Insurance
Before delving into common questions insurance brokers receive from their clients, it is useful to understand the basic principles of risk and insurance. In the workplace, employees are exposed to any number of situations that represent risks, or those situations that could potentially cause injury and result in losses. Potential risks include:
- Physical workplace hazards, such as strenuous work operations, hazardous machinery, or repetitive motion injuries
- Emotional hazards, such as demands on workload, workplace violence, or sexual harassment
- Environmental hazards, such as exposure to chemicals, heat, or dust
The purpose of risk insurance, specifically workers compensation insurance, is to provide some level of economic protection against the losses that may occur when an employee is injured in the workplace.
Questions to Ask Workers’ Compensation Insurance Brokers
Now that we understand risk and the purpose of workers’ compensation insurance, many businesses may have questions when it comes to establishing a suitable policy for their employees. Insurance brokers field many common questions regarding the costs associated with insurance plans, what those premiums pay for, and what features are included in the plans.
Here is a list of just a few of the most common questions to prepare for:
- If insurance rates go up or down over the next three to five years, are you able to reduce premiums accordingly? How much can you save our company?
- Can you provide quotes from major insurance writers and agents?
- What credits and/or discounts does my current workers’ compensation policy include? How can my company maximize available discounts?
- In addition to regular claims reviews, what specialized services do you provide that help lower my costs? How are these services provided?
- Are you proactive in helping our company reduce the incidence of claims by improving the culture of safety in our workplace?
- Do you offer any programs or outside consultants to help us lower our workers compensation costs?
- In an effort to reduce the costs and potential for litigation within the first 30 days of a new workers’ compensation insurance policy, what services do you provide to new policyholders?
It’s clear that insurance agents must have answers to these and many other questions. Workers’ compensation insurance protect both employers and employees, and finding the right policy and the right features are critical in establishing long-term relationships between the broker and his or her clients. ◼
Does Special Events Insurance Cover Terrorism?
May 3, 2018
Tragic events such as the Boston Marathon bombing in 2013 and the 2017 mass-shooting incident targeting attendees of the Route 91 Harvest music festival in Las Vegas have caused many event promoters to question the need for terrorism insurance. Terrorism is on the rise on a global scale, and special events represent a prime target.
Special event insurance is designed to protect event hosts from the unexpected. This insurance provides investment protection coverage for unforeseen incidents, helping to cover costs associated with event cancellation, property damage, or injuries incurred by guests of the event. These policies are often referred to as entertainment insurance, specifically when the event is entertainment-oriented. Not all event insurance policies are the same, and many do not offer protection for terrorism events.
What is Special Event Insurance?
There are two major types of special event insurance – one being a standalone policy, and the other associated with business liability insurance. The most common covers private events, such as weddings, family parties, and religious celebrations. Public events cannot typically be covered under this type of insurance policy, although business-related events may be eligible for coverage.
Business insurance policies, such as commercial property insurance or entertainment insurance, often include special events coverage. Event promoters and event venues each may be required to have an insurance policy in place that covers the business from the costs associated with injuries, accidental deaths, or property damage. Event cancellation coverage may also be a feature of these policies.
Is Terrorism Insurance Part of Special Events Insurance Coverage?
In simple terms, terrorism insurance is not typically part of a special events insurance policy. In fact, most business policies – here, special events policies — specifically exclude terrorism from coverage. Terrorism insurance can be purchased, however, and is commonly offered as a special addition or endorsement to standard business policies. It is estimated that 60% of all U.S.-based businesses have some form of terrorism insurance policies.
In 2002, the United States Congress enacted the Terrorism Risk Insurance Act (TRIA), helping to ensure that businesses had adequate financial coverage for recovery and rebuilding efforts if they were to become victims of a terrorist act. Under TRIA, all casualty and property insurance providers must make terrorism coverage available to their clients. Terrorism coverage is considered a public/private partnership of sorts, allowing the insurance industry to work together with the federal government to share the losses associated with a terrorist attack or terrorism incident. Today, terrorism coverage is a common part of the overall event insurance planning process.
It is important to note that depending on the state the policy is in, terrorism insurance policies may not cover certain incidents, such as fire after a bombing. They may also exclude attacks of a nuclear, biological, or chemical nature. Cyber attacks are common, but are not considered violent acts and are therefore excluded from most terrorism insurance policies. Each of these exclusions may be covered by additional riders or endorsements on the policy.
How Does Terrorism Insurance Work?
Businesses that host special events need to understand the factors that may influence the need for specialized terrorism insurance coverage. These factors may include event locations or business locations and the type(s) of businesses to be covered under the policy. Businesses or event venues located in urban centers represent a higher percentage of risk, and are more likely to be targeted by terrorist actions. Certain industries also have higher risks; these business interests may wish to consider terrorism coverage as part of the overall insurance protection strategy.
In order for losses to be covered in a terrorist attack, the attack must be certified as such by the U.S. Department of the Treasury. The Secretary of the Treasury is empowered to certify both domestic and foreign terror acts. To qualify for certification, the attack must be violent in nature and have as its objective an effort to influence governments or civilians. There are additional caveats: no act will be certified if the aggregate of property and casualty losses do not exceed $5 million in value, and the act itself must also cause a minimum of $100 million in property damage and injuries to be considered a terrorist attack. ◼
The Complex Insurance Needs of a PEO
May 1, 2018
Professional employer organizations, or PEOs, are a human resources solution for a growing number of small businesses in the United States. It is estimated that up to 16% of all small businesses utilize the services of PEOs in managing employee tasks, such as handling payroll and workers’ compensation, risk management, recruiting, and employer-sponsored benefit administration. Small business ventures, such as entrepreneurial startups, are leveraging the power of PEOs, effectively outsourcing HR duties through these providers.
When working with a PEO, a small company’s employees technically become the employees of the PEO, which creates certain complications. The PEO takes on substantial risks, and this is why the typical PEO service package includes both workers’ compensation insurance (where required by state law) and employment practices liability (EPL) insurance. Together, these insurance options are called PEO insurance. Despite these PEO insurance options, there are several reasons why companies should establish their own EPL insurance policies to protect their financial interests and those of their employees. Here is a look at two of the most common issues when insuring a PEO.
Limits of Liability
When a company works with a PEO, it is constrained by specific limits on insurance coverage – limits that are shared by every company contracted with the PEO. The typical PEO insurance policy contains per-company and aggregate liability limits. Per-company limits specify how much the insurance carrier will pay for claims against each PEO client. The aggregate limit is the maximum amount the insurance carrier will pay for all employees at each company covered by the PEO policy during the policy period.
It is recommended that to protect the company’s assets, a separate EPL policy should be obtained. If the aggregate limit is exhausted through employee EPL claims, the company may have to pay out of pocket for losses if they don’t have their own EPL insurance.
“One Size Fits All” Insurance
It goes without saying that every company is different. Each company has its own unique risk factors and operational requirements. PEO insurance represents a “one size fits all” solution, and this model may be wholly insufficient for the asset-protection needs of a specific business. In other words, typical PEO insurance policies are generic and are not tailored to the discrete requirements of a given business. However, U.S. Risk has the market knowledge and experience to offer a comprehensive PEO insurance program.
Wage and hour disputes are a great example of why PEO insurance isn’t enough protection for many companies. Such disputes are common, and plaintiffs in these claims have a solid track record of success. Wage and hour dispute claims are usually excluded from typical PEO policies as a result. With separate EPL insurance in place, companies can handle liabilities in a way that provides coverage for legal fees, especially for liabilities not covered by the PEO’s generic policy.
Final Words on PEO Insurance
There are benefits to working with a PEO in managing HR duties, especially in the low cost aspects of such an arrangement. All is not perfect, however; small businesses have a lot to lose if their PEO insurance policy is insufficient in coverage limits or claims exclusions. It is critical that companies speak to an insurance broker to explore separate employment practices liability insurance, both to protect the company’s interests and to protect the company’s employees. ◼
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