26 July 2017 By

From eavesdropping dolls to faulty kitchen appliances, from combustible smartphones to defective airbags, the world is a dangerous place and product recalls are a fact of life. The public needs protection from unsound products and manufacturers need protection from product recalls.

It is a common misconception that product recalls are covered under a general or product liability policy. Those coverages do a good job of covering bodily injury and property damage, but they generally exclude product contamination and product recall events. This limitation on coverage is referred to as the sistership liability exclusion. Adding a product contamination or product recall policy protects a company’s bottom line by covering the direct costs of recall, but transferring the risk in this way is only one part of closing the recall exposure gap.

Every company with a product on the market, regardless of size, should establish solid product risk management policies and procedures for handling a recall or contamination event.

18 July 2017 By

The US Department of Labor has been conducting frequent ERISA compliance audits and, in many cases, imposing significant penalties for noncompliance. This should spur employers to make sure that they are in compliance with that law’s plan documentation, disclosure, and annual reporting requirements for all applicable plans.

Unfortunately, most employers are not in compliance with the Summary Plan Description (SPD) requirements. Why? Many companies mistakenly assume that insurance contracts, certificates of insurance, SBCs, and benefits summaries fulfill the ERISA requirements for an SPD. Those documents do not include the required or recommended provisions that protect the plan, the employer, and plan fiduciaries.

All group health plans subject to ERISA (and all size groups) are required to provide participants with an SPD. An SPD must be written in a manner calculated to be understood by the average plan participant and must be sufficiently comprehensive to explain the following: the plan’s benefits, its claims review procedures, and the participant’s rights and obligations under the plan.

11 July 2017 By

How many times have you heard someone say “Workers’ compensation rates are the rates” and you can’t change the pricing? Well, fortunately that is not accurate and there are a variety of ways for you to lower your workers’ compensation premiums.

Let’s first talk about how the insurance companies develop their pricing models that determine how much money you have to pull out of your checking account. The first step is to take your estimated annual payroll and break it down by class code. After this is accomplished, you take the set rates published by the state and multiply

it by your payroll (divided by 100) for that class. The set rates are based per $100 of payroll. The next step in calculating your manual premium is taking this number

[(Payroll/100) x Rate] and multiplying it by your experience modification, also known as your experience mod.

A company’s experience mod calculation is a very complex formula that incorporates a number of different factors. The primary factors are taking the losses from the three prior years (excluding the most recent year) and the corresponding premiums developed. Like most insurance polices, this is your basic loss ratio. The calculation will then take into account the payroll dollars for your company and benchmark them against the industry standards for that class code, the actual losses versus expected losses, frequency versus severity, and a few additional factors. Each one bears a certain weight on the overall calculation of the final experience mod.

30 June 2017 By

Spending time on the water is meant to be enjoyable, relaxing and refreshing. With that in mind, we encourage you to be mindful of certain circumstances that might put you and your family at risk. Freshwater boaters in particular should pay close attention to electricity that services boats, docks and marinas. If the electric service has not been installed or maintained properly, a swimmer may be at risk of electric shock drowning.

What you need to know

  • Electric shock drowning can occur when a typically low-level alternating current passes through the body while immersed in fresh water. The force can cause skeletal muscular paralysis, which may lead to drowning. This shock can happen in any natural water, but becomes fatal in fresh water due to lower water conductivity.
  • Large amounts of freshwater runoff into seawater also can produce the same conditions.
  • Electric shock can occur when a boat is powered by an external power source, such as a generator sharing power with another vessel.
  • If your generator is wired and maintained to American Boating and Yacht Council (ABYC) standards, your risk is greatly reduced—as long as the power is contained onboard, and not shared or improperly used.

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