10 Questions Every Business Must Ask Before Buying Workers Comp

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  1. How many employees do I have to employ before I am required to carry Workers Comp Insurance?

    Each state has their rules and regulations pertaining to who has to acquire Workers Comp. Most states require you to have Workers Comp if you have more than 1 employee.
    For questions concerning your specific state gives us a call at 1-800-329-2040.

  2. How does a business obtain Workers Comp Insurance?

    Business may obtain insurance by:

    • Obtain Workers Comp through a private insurer authorized to operate in your state.
      Click here to get an affordable Workers Comp quote from Enterprise.
    • You can become self-insured from approval by your state’s Workers Compensation Office.
    • By joining state self-insurance fund.
  3. Are there any businesses that are exempt from carrying Workers Comp Insurance?

    • Certain employees of a private residence
    • Certain employees of a private unincorporated farm
    • Certain musicians and performers
    • Employers covered by certain federal laws
    • Employees of railroads or other vessels in interstate or foreign commerce
    • Crews of airplanes engaged in crop dusting or spraying operations
    • Uncompensated officer and members of boards of directors of certain non-profit organizations
    • Landmen

    It you’re not sure, contact an Enterprise Workers Comp specialist with your questions.

  4. How much does Workers Compensation Insurance cost?

    Workers Compensation premiums are determined by several factors including total annual payroll, the type of work your employees are engaged in and your past claims history.
    Click here to get a Workers Comp quote from Enterprise!

  5. I have no employees. Do I still have to carry Workers Compensation Insurance on myself?

    Depending on the state in which you operate, there are situations where you may not have to carry Workers Compensation Insurance if you have no employees.Some situations include:

    • The business is owned by one individual with no employees, no leased employees, no borrowed employees, no part-time employees, no part-time employees (including family members) and no subcontractors and the business is not a corporation.
    • Same conditions as above but the business is a partnership.
    • Same conditions as above but the business is a one-or-two person owned corporation. If two people own the corporation they both must be corporate officers and between then two of them hold all the offices of the corporation.

    Note there may be times when you may have to obtain Workers Compensation on yourself due to contractual obligations.

  6. I treat all of my employees as “independent contractors.” Do I still have to carry Workers Compensation on them?

    Most states have very specific laws regarding the classifications of employees as independent contractors. Anyone meeting the true definition of an employee must be treated as such and provided with Workers Compensation Insurance.
    If you’re not sure if an independent contractor should be treated as an employee, give one of our specialists a call at 1-800-329-2040.

  7. I sometimes hire subcontractors and independent contractors. Am I responsible for their Workers Compensation Insurance?

    You may be. If you hire any uninsured contractors or subcontractors to perform any work, which is a part of your trade or business, you may be responsible for paying any Workers Compensation benefits if they are injured and your insurance carrier for the cost of the contract can charge you.
    To make sure your subcontractors are classified correctly and you are not putting your company in adverse risk, call 1-800-329-2040 to speak to a specialist.

  8. Can I withhold premiums from my employee’s paychecks to pay for my Workers Compensation Insurance policy?

    No. Law makes it very clear that employers cannot withhold premium payments from their employees to pay for Workers Compensation Insurance. This includes employees misclassified as independent contractors. Employers found in violation may face serious civil and criminal fines as well as possible incarceration.

  9. Are there penalties for not carrying Workers Compensation Insurance?

    Yes. Employers who fail to carry Workers Compensation Insurance can be fined for violations up to $10,000 to $20,000 depending on state. Additionally, an employer can be charged with criminal violations for their willful failure to provide Workers Compensation Insurance, for providing false information in order to reduce the amount of Workers Comp premium. Employers in violation of the laws regarding Workers Compensation Insurance may be served an injunction against doing further business until a policy is obtained and proof is provided to the Office of Workers Compensation.

  10. I am an out-of-state employer. Do I have to have to purchase Workers Compensation Insurance in another state?

    If an out-of-state employer operates in another state than where they are located, the owner must provide coverage in accordance with the laws of the domicile state as long as the coverage extends to operate within the borders of the other states.
    If you have questions about multi-state operations, call 1-800-329-2040 to speak to a Workers Comp specialist.

Business Insurance – What Insurance Coverage Is Important to My Business?

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There are different factors to consider when choosing insurance coverage for your business. The type of business, location and number of employees can factor into the kind of insurance coverage needed when starting and maintaining a business. Below are just a few of the coverages to consider when looking for business insurance.

Small businesses make up a large portion of the United States economy and are the major employers of workers in the country. Because of the influence to our local communities, small businesses need insurance to keep their companies protected from potential risks that could prove financially damaging. As a small business owner, you have a busy schedule and as such you need to quickly understand the business insurance options available to you so that you are able to make the right choices for the unique needs of your business.

Business Owner Policy (BOP)

The majority of small businesses do not have high risk of catastrophic claims or lawsuits so their needs can be met with a business owner’s policy or BOP. This coverage features two of the most important policies – commercial general liability and property insurance. General liability protects companies from property damage and bodily injury claims while the property insurance protects assets such as buildings, furniture, equipment and inventory. Many insurance companies also add in business income insurance, which covers loss of income and business expenses when a company must temporarily close for repairs because of covered property damage like a flood.

Commercial Auto Insurance

As a business owner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel — liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the “principal insured” rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.

Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. You will be asked questions about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business.

Here are some Myths about commercial auto from Progressive Insurance Company:

Myth: Your employees are covered when they drive your business vehicles.

This isn’t always true. Some insurers will only extend coverage to drivers who are named on the policy. Check and see if your insurer has something called “permissive use,” which means that all of your drivers are covered as long as they have your permission to operate the vehicle.

Myth: It’s cheaper to buy all of your business insurance products from the same insurance company.

Chances are you’re going to need a wide range of coverages to protect your business. Depending on what kind of work you do, you might need everything from commercial vehicle insurance and general liability to workers’ compensation. While it might be easier to buy all of these products from the same company, you could save big bucks by buying your policies from separate providers. Shop around to find the best deal, or ask your broker for quotes from multiple companies.

Professional Liability Insurance

Some small business owners need professional liability insurance also known as errors & omissions insurance (E&O). Depending on the profession, coverage is available in $1 million increments to provide protection from mistakes or faulty service. In the medical field, professional liability is known as medical malpractice. Professionals such as accountants, architects and engineers, real estate brokers and financial service representatives use E&O insurance for protection against bad advice, mistakes and errors that could harm client financially.

Excess Liability Insurance

Excess liability or umbrella policies provide additional insurance protection over and above the policy limits of a business owner policy. This extra safety net of coverage is available starting at $1 million limits and is most likely needed by companies in high risk industries or with significant assets to protect.

Workers’ Compensation Insurance

Most states require that companies with employees carry workers’ compensation insurance. This coverage will pay for medical treatment and lost wages of employees with work related injuries or illnesses.

Employment Practices Liability (EPLI)

While workers compensation helps employees with on the job injuries, employment practices liability is actually a coverage that protects the employer. When an employee alleges wrongful termination, discrimination, harassment or even breach of contract, employment practices coverage can help pay the legal defense and claim costs alleged against the business.

Let Us Guide You

Business insurance does not have to be complicated. You are great at your business and in turn so are we! Let our licensed insurance brokers discuss with you the specific coverage necessary to provide uncomplicated full insurance protection for your growing business. Call or email us today at support@insuranceguys.com or 800-347-5373.

Professional Liability: What is E&O Insurance

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Errors and Omissions Insurance, also known as Professional Liability and Malpractice Insurance, is a coverage for Service Professionals, such as doctors, lawyers, accountants, architects, engineers, as well as advertising agencies to commercial printers, Web hosting companies to wedding planners. If you are in the business of providing a service to your client for a fee, you have an errors and omission (E&O) exposure. You need to consider what will happen if your services are not done correctly or on time, and it costs your client money or harms their reputation.

In general, E&O coverage is not part of a general liability policy (GL), it is a policy all on its own. In fact, most GL policies specifically exclude any and all professional services offered.

General liability policies are mostly written on an Occurrence Form, meaning that the policy activates coverage at the time of the actual “occurrence”, i.e. an auto accident. Errors & Omissions (E&O) policies are written on what is known as “Claims Made” Form, which mean the coverage is activated at the time the claim is made, not at the time of the occurrence. Any claims must be made or, in some cases, made and reported, within the policy period. These policies have a retroactive date
that becomes very important over time. Claims that arise out of acts committed prior to the retroactive date will not be covered. The farther back the retroactive date, the more coverage provided. Claims made coverage can be difficult to understand at first. We suggest you contact us if you have questions.

Many professionals purchase Professional Liability coverage simply to fulfill a contract requirement, but real world risks exist which can threaten the very existence of a business. A client can sue you for negligence in providing professional services, regardless of fault. Even frivolous lawsuits can incur significant defense costs that could severely damage the economic future or even bankrupt a moderate to larger business. How much can you afford to pay to defend the good name of your business? Ten thousand dollars? One hundred thousand dollars? A well written E&O policy will cover judgments, settlements and defense costs. A poorly written policy, or no policy at all, could shut a business down, and in some cases even leave the individual business owner holding the bag.

The cost of E&O insurance will vary depending on the type or class of your business, where you are located, and if you have had any claims. An insurance company that is competitive for architects and engineers may not be competitive, or may not even offer coverage for doctors, lawyers, or real estate agents.

When applying for E&O be prepared to give your insurance agent information and forms such as a completed application, copies of your standard contract, a description of quality control procedures, documentation procedures and training procedures. The insurance company underwriter will not only look at your experience to see if you have had claims, but they will also try to determine the reason you haven’t had claims. Is it luck or are you doing something that prevents the claim in the first place? And if you have had claims, what steps have you taken to ensure that the same errors will not continue to occur?

Your ace in the hole when buying Errors & Omissions insurance is to have a true expert agent who not only knows E&O coverages, but understands how to apply them to your business and which carriers offer the best programs and services for you.

California Enacts Mandatory Paid Sick Leave Law

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California Enacts Mandatory Paid Sick Leave Law

This is a snapshot of the new law in the state of California, Paid Sick Leave Law was signed by Govenor Jerry Brown.  The changes will take effect July 1, 2015.  Check with your payroll service or CPA for more information on compliance.

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On September 10, 2014, California Governor Jerry Brown signed into law Assembly Bill 1522, known as the Healthy Workplaces, Healthy Families Act of 2014. With a few exceptions, the new law requires all employers to provide employees performing work in California with paid sick leave, beginning on July 1, 2015.

“Employer” means any person or entity employing another person under any appointment or contract of hire. There is no exception for “small” employers.

Employees not covered by the new law are employees who are covered by a valid collective bargaining agreement (CBA) that:

  1. provides for the wages, hours of work and working conditions;

  2. provides for paid sick days or a paid leave or paid time off policy that allows the paid time off to be used as sick days;

  3. requires final and binding arbitration of disputes concerning paid sick time;

  4. provides for premium wages for all overtime hours worked; and

  5. provides a regular hourly rate of pay that is not less than 30 percent higher than the state minimum wage.

There are also specific exemptions for employees in the construction industry who are covered by a valid Collective Bargaining Agreement, as well as for employees who are providers of in-home supportive services to aged, blind or disabled individuals who cannot perform the services themselves and who cannot remain in their places of residence without having such services performed for them. (A list of the services that may be considered in-home supportive services can be found at California Welfare and Institutions Code section 12300.)

Employers may have sick leave policies that provide employees with greater benefits than those mandated by the new law. This Alert focuses on the minimum requirements of the new law. An employer need not provide more paid sick time to its employees if its existing paid time off policy satisfies the accrual, carryover and use requirements of the new law, and provides no less than 24 hours of paid sick leave or “equivalent” paid time off (e.g., PTO) for use in a 12-month period.

Unless an exception applies, beginning on July 1, 2015, all employees working in California will begin accruing one hour of paid sick leave for every 30 hours worked, provided that such employee has worked in California for at least 30 or more days within one year of his or her commencement of employment. Employees who are exempt under the administrative, executive or professional exemptions are deemed to work 40 hours per week, unless their normal work week is less than 40 hours, in which case the exempt employee will accrue sick time based on that normal workweek. An employee who is employed as of July 1, 2015, but has not yet worked 30 or more days will not become eligible until he or she has done so. The new law requires that if accrued, 24 hours (or three days) of paid sick leave must carry over to the next calendar year. Employers may also limit total accrual of paid sick leave to 48 hours, or six days. Similar to vacation accrual caps that are permitted under California law, if an employee has accrued 48 hours of paid sick time and has not used any of it, he or she will not accrue any additional paid sick time until he or she uses some of the “banked” sick leave time. Employers may, at their election, set a higher “cap” on the number of hours or days of sick leave time that may be accrued. An employee who has accrued 48 hours of sick time and has not used any of it in a one-year period (see below for measurement of the one-year period) is entitled to carry over 24 hours of paid sick time.

The employer may set a reasonable minimum increment for the use of paid sick time. This increment cannot exceed two hours. Employees are entitled to use accrued sick time beginning on the 90th day of employment; thereafter, they are entitled to use sick time as it accrues. In short, it is permissible for an employer to require new employees to be employed for at least 90 days before using any accrued sick time.

As noted above, employers may limit total aggregate accrual of paid sick time to 48 hours (six days). They may also limit employees’ use of paid sick leave to 24 hours, or three days, for each year of employment (measured by hire anniversary date), or during a calendar year or other 12-month period. The employer should decide which 12-month measure it will employ and this should be consistent for all employees.

The new law requires employers to provide a written notice at the time of hiring that includes discussion of employees’ rights to accrue and use accrued sick leave, and that they may not be terminated or retaliated against for using or requesting the use of such paid sick time. The written notice also has to inform the employee of his or her right to file a complaint against any employer who retaliates. The employer is also obligated to notify employees in writing within seven calendar days of any changes to the information included in their original hiring notice, with a few exceptions (state or municipal employees, exempt employees and CBA employees). The new law also requires employers to provide covered employees with written notice each pay period stating the amount of paid sick leave or paid time off available. The written notice may be included on the employees’ itemized wage statements or may be a separate writing, provided on pay dates.

The rate of pay for paid sick time will be the employee’s hourly wage. If an employee had differing rates of pay during the 90-day period prior to his or her use of accrued sick leave, was paid by commission or piece rate or was a salaried nonexempt worker, then the rate of pay is calculated by dividing the employee’s total wages, exclusive of overtime, by the total hours worked in the 90-day period.

In seeking to use accrued paid sick time, employees must request use of paid sick time orally or in writing and are required to provide reasonable advance notification when the need for the use of leave is foreseeable; otherwise, they are required to provide notice “as soon as practicable.” Paid sick leave may be used for diagnosis, care or treatment of an existing health condition or preventive care for the employee or his or her family member. It may also be used for an employee who is the victim of domestic violence, sexual assault or stalking. Employers may not deny employees the right to use accrued sick days and may not otherwise discriminate against an employee for exercising the right to use accrued sick days. The statute does not contain any provision expressly permitting employers to deny use of accrued sick days for business reasons. While it is hoped that regulations allowing employers to insist upon medical verification of sick days used for “diagnosis, care, or treatment of an existing health condition” will be implemented prior to the July 2015 effective date of the statute, no such regulations are in place yet. If paid sick days were unlawfully withheld, the administrative penalty shall be the value of the sick days withheld multiplied by three, or $250, whichever is greater, but not exceeding $4,000 in aggregate penalties. If the violation results in other harm to the employee (or to a person who supported the employee), the administrative penalty shall also include a penalty of $50 per day that the violation occurred or continued, again with a $4,000 aggregate maximum administrative penalty.

The California Labor Commissioner will be developing a workplace poster that describes employees’ paid sick leave rights. Employers are required to post the poster in a conspicuous place in each of their California workplaces. An employer who wilfully violates the posting requirement is subject to a civil penalty of up to $100 per each offense.

Find the Right Kind of Insurance for Your Business

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Find the Right Kind of Insurance for Your Business

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You invest a great deal into starting and growing a business, so it makes sense to protect it. Many types of insurance are available, but not every business needs the same type of coverage. What’s more, your needs may change as your business grows.

Here are some of the most common types of small business insurance:

General Liability Insurance. Business owners purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.

Product Liability Insurance. Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as a result of a defect product that causes injury or bodily harm.

Professional Liability Insurance. Business owners providing services should consider having professional liability insurance (also known as errors and omissions insurance), which protects your business against claims of malpractice, errors, and negligence. Depending on your profession, you may be required by your state government to carry such a policy. For example, physicians are required to purchase malpractice insurance as a condition of practicing in certain states.

Commercial Property Insurance. Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind, and hail storms, civil disobedience and vandalism. The definition of “property” is broad, and includes lost income, business interruption, buildings, computers, company papers, and money.

Workers’ Compensation Insurance.  Many states make Workers’ Compensation insurance mandatory.  Even a family member that is not a corporate owner must be covered by Worker’ Comp. A workers’ compensation insurance policy provides covered employees with medical and wage replacement (indemnity) benefits that arise from workplace injuries. Only workplace injuries that arise out of and in the normal course of business are compensable.

What is covered by a Workers’ Compensation policy?

A workers’ compensation insurance policy covers the costs of medical treatment including physician visits, prescription medications, surgeries, etc. In addition, workers’ compensation insurance provides lost time or indemnity benefits. The amount of indemnity benefits is based upon a worker’s weekly wage and the benefit amounts are determined by state laws.

Making wise insurance decisions is easier when you work with a reputable and qualified broker agent like Insurance Guys.  Let us help find the best coverage for you and your business.

800/585-8887

support@insuranceguys.com

 

Shifting Costs from Group Health Insurance to Workers’ Compensation Insurance

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This article written March 5, 2015 by Andrew G. Simpson posted in the Insurance Journal is a very interesting read.

A study conducted reveals that doctors could begin to shift soft tissue injuries that live in that “gray area” of whether they are work related or not from being paid by the regular medical insurance to being paid for by their employers workers’ compensation coverage. The Workers’ Compensation policies typically pay the physicians a higher fee than the new Affordable Care Act (ACA) plans pay.

This shift could have a major impact on an employer’s Workers’ Compensation insurance costs.


 

How Group Health Claims-Shifting Affects Workers’ Compensation: WCRI

By Andrew G. Simpson | March 5, 2015

Workers’ compensation insurers should expect more cost shifting from group health plans as a key provision of the Affordable Care Act (ACA) takes hold, according to new research from the Workers Compensation Research Institute (WCRI).

The claims shift is already happening in states where capitated health plans are popular because workers’ compensation pays physicians more than capitated health plans pay, according to the study. Workers’ compensation pays doctors a fee-for-service while capitated health plans pay providers a set amount for each patient.

Also, since a provision of the Affordable Care Act is designed to encourage the formation of Accountable Care Organizations (ACOs), which follow the capitation payment model, the study predicts there will be more cost shifting to workers’ compensation as ACOs gain in popularity in the group health market.

The result could be tens of millions of dollars in additional costs for workers’ compensation, according to the report.

WCRI Executive Director Dr. Richard Victor presented the study’s findings, which WCRI stressed are preliminary and subject to change, during the WCRI’s annual conference in Boston on Thursday.

Soft Tissue Claims

WCRI found that the claims most likely to be shifted to workers’ compensation are ones for soft tissue injuries where there is some question whether the injury is work-related.

“Decisions about ‘work-relatedness’ rely heavily on the assessment by the treating doctor,” noted Victor.

Whether fractures, lacerations, contusions and similar injuries are work-related is usually obvious. However, the “work-relatedness” of soft tissue injuries to a back, knee or shoulder may be less clear—creating an opportunity for financial incentives to influence decisions, according to the study.

The study looked at claims under fee-for-service group health plans and capitated health plans. In states where most group health plans are fee-for-service like workers’ compensation and where capitation plans serve less than 10 percent of the market, there was no case-shifting effect.

But in states where capitated health plans have a market share of more than 22 percent, there was a 30 percent increase in soft tissue workers’ compensation claims.

Capitation Enrollment

Enrollment in capitation plans has actually been on the decline over the last decade. In 2013, only 14 percent of insured workers were in capitated health plans, compared to 29 percent in 2000.

States with the biggest enrollments in capitated plans currently include California, New York, Pennsylvania, Michigan and Massachusetts. States with little use of capitation include Texas, Illinois and North Carolina.

Victor said he expects the ACA will begin to reverse the downward trend in capitation and that states with little capitation now could experience heavy case-shifting in the future.

“Initially, larger shifting of soft tissue cases to workers’ compensation is more likely to occur in states where capitation is currently more common,” said Victor. “Ultimately, states with little current use of capitated plans may see the largest shifts to workers’ compensation.”

WCRI offered two examples to illustrate the cost effect. If capitation increased from 30 percent to 55 percent in Pennsylvania (a high capitation state now), there would be an 8.5 percent shift of soft tissue claims to workers’ compensation, costing about $55 million.

In low-capitation Illinois, if capitation jumped from 12 percent to 27 percent, there would be a 12 percent increase in soft tissue workers’ compensation claims at a cost of $90 million.

In an ACO, doctors and hospitals share financial and medical responsibility for coordinating services to patients. An ACO is rewarded for the quality of medical outcomes and for keeping costs low. In addition to rewarding doctors with higher payments, shifting cases to workers’ compensation has the added possible benefit of removing theses cases from an ACO’s accountability formula, the study notes.

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