Florida Workers Comp Rates Remain in Flux for 2019

Florida Workers Comp Rates 2019 are headed in a positive direction.  

In 2019, Florida Workers Comp Rates are improving for the business community throughout the state.  The decline amounts to a deduction of 13.9% and will contribute to a savings for business in Florida of approximately $454 million. This is good news because the Florida Workers Compensation System has been in flux for a number of years.  This decrease is the third such decrease over the previous year and a half.  Previous to these three decreases, the workers compensation rates had increased by 14.5% in 2016.

Florida Workers Comp Insurance Rates 2019

What Caused Florida Workers Compensation Rates 2019 to Decrease?   

Florida Workers Comp Rates 2019 are decreasing because of significant improvements in experienced losses by insurance carriers. This means the insurance carriers paid out less in claims. Some within the industry credit safer workplaces, enhanced efficiencies in the workplace, and an increase in the use of technologies for the decrease in costs.

Pond with a waterfall and palm trees in the background at a Miami, Florida Golf Course.

Why have the Workers Comp Florida Rates 2019 Been in Flux?

For the past few years, workers compensation rates within the state of Florida have been in flux for a number of reasons. Two State Supreme Court Decisions have contributed to the instability. Those cases were Castellanos v. Next Door Company and Westphal v. City of St. PetersburgCastellanos vs. Next Door Company made a previous 2009 ruling invalid, meaning judges no longer had to stick to the mandatory fee schedule and now can award additional compensation for attorney’s fees when offering judgments within the workers compensation system.  The Westphal Case, had a ruling that ruled the 104-week statutory limitation on temporary total disability benefits is unconstitutional. This ruling extended this period to a 260-week limitation. This 260-week limit is more in line with states throughout the country and significantly increased the amount carriers had to pay for permanently disabled injured workers.

Another factor that has caused the workers compensation system in the state of Florida to be out of whack is State Senate Bill 1402.  This bill accounted for 1.8% of the recent increase in premium by increasing the cost for updates within the Florida Workers’ Compensation HCPR Manual.

In addition to these issues, in 2017 the Florida Insurance Regulators took over Guarantee Insurance Company (The states assigned risk workers comp provider) because it had become insolvent.  This left 1250 businesses in the state of Florida scrambling to find a workers comp carrier.

Epcot Center, Disney World, Orlando, Florida

What could be in store for future rates?

Hurricane Michael Relief

In response to Hurricane Michael, Florida Governor Rick Scott issued an emergency order that make sure “additional protections” are in place for Florida policyholders – including freezing any rate hikes for 90 days.

The order requires that insurers:

  1. Provide an additional 90 days to policyholders to supply required information to their insurance company. Many Floridians were displaced during this dangerous storm, and providing additional time to submit information to insurance companies gives them needed flexibility.
  2. Rescind for 90 days all non-renewals or cancellations issued to policyholders in the days leading up to Hurricane Michael. This gives policyholders 90 days to either renew their insurance policy, or find a new policy; and
  3. Freeze any and all efforts to increase rates on policyholders for 90 days.

Independent Medical Review Program

Florida is looking in to implementing a 6-year-old independent medical review program for workers compensation claims. This program has been enacted by the state of California and has been a resounding success. Under this program disputes about the medical treatment of injured workers are resolved by physicians instead of by the courts. California has found this has enabled for a more efficient resolution of claims while reducing the need for lengthy and costly judicial processes.

New State Senate Promising to Revisit Florida’s Workers Comp Laws

The new President of the Senate in the state of Florida, Bill Galvano, is promising to revisit Florida’s workers’ compensation insurance laws. At a recent ceremony shortly after taking over as President of the Senate Galvano said, “I don’t want to be in a situation where they spike and then we are running to fix it at that point”. Statements like these from the leadership of the Florida legislature show the decision makers in the house are looking forward to attempt to provide a stable market for the business community and eliminate the volatility businesses have seen in recent years for Florida Workers Comp Rates.

Turtles and Alligator at Busch Gardens, Florida

What can Florida Business Owner do to Maximize Savings?

Shop around your Policy

It is not a wise decision to switch carriers every year for a slight decrease in premium. This is because when a claim does occur a carrier will take in to consideration how long you have been a customers of theirs when they are deciding to raise your rate or deny your business coverage. At the same time, it is important to make sure your business is getting a competitive rate. The best way to do this is to partner with an independent agent who can shop around your policy for you.  This can save you time and usually result in lower premium payments on more comprehensive coverage.

Invest in Safety Protocols

Safety is the name of the game in any business. It is what is best for your employees as well as your customers. It is also important when it comes time to purchase commercial insurance. a safer business will have less claims and the claims it does have will be less severe. A small investment in a safety program can pay huge dividends when looking for the lowest Florida Workers Comp Rates.

Choose the Pay as You Go Option

Pay as You Go Workers Compensation Insurance is an excellent option for seasonal and cash strapped businesses. This option allows businesses to get coverage in place at a significantly lower rate than a traditional workers comp policy. Once a policy is in place, the premium is paid monthly based upon the actual payroll from the previous month.  This is a great option if your business operates in an industry that has a hard time forecasting payroll for a number of reasons. If your payroll is significantly lower one month the payment will reflect that and the same will occur in months when your workforce represents more man hours. Finally, a Pay as You Go Policy prevents most mid-term audits from occurring because the payments are more accurate from month to month and not based upon an estimate from previous years payroll.  This prevents an unwelcome surprise from occurring at the end of a term when a business under pays premium throughout the year and has an unexpected payment to end the year.

 

Indiana Workers Compensation 2019

Indiana Workers Compensation Rates are going down by an average of more than 7%. 

Indiana Workers Compensation Rates 2019 will be going down by an amount of 7.6 percent on average for businesses throughout the state. The Department of Insurance approved the decrease in the month of October and the benefits go in to effect the first of January 2019. This savings is estimated to amount to a savings of more than $60 million for Indiana Businesses.

Indiana Workers Compensation

Why are Indiana Workers Compensation Rates 2019 Declining

Many things go in to what a business pays for workers compensation insurance. The experience modification rate of the business and the strength of the assigned risk provider in the particular state equate an enormous amount towards what a carrier decides to charge a business for coverage.  Indiana Workers Compensation are decreasing because of lowering frequency of worker injuries. The department of insurance also credited a robust job market as a reason for lower rates because as the economy grows people open more businesses which create a larger base for insurers to collect premiums.

Indiana Farm In Winter

How can Business Owners Maximize saving on Indiana Workers Compensation Rates 2019?

Shop Around Your Indiana Workers Compensation Policy

It is never a good idea to switch carriers at the drop of a hat because of a small drop in premium. At the same time it is equally important to shop your policy around periodically to ensure your carrier is offering a competitive price. An efficient way to do this is to partner with an independent agent.

Use an Independent Agent

Partnering with an independent agent is always a great way to ensure maximum savings on the most comprehensive coverage available. An independent agent is a good partner because they can shop your policy around to multiple carriers in an attempt to get better coverage at lower rates by forcing the carriers to compete for your coverage. An independent agent will allow you to focus on running your business while your agent shops around your insurance policy.

Ensure Your Business is Classified Properly

Far too many businesses have employees that are not classified properly. If you have different types of employees than it is important to discuss this with your insurance agent at renewal. This can be an issue if you have some employees who are in office/clerical positions yet other employees who may be in other positions that are more physical in nature. When employees are classified improperly, it is typically cleared up during the post term audit.  Even when t his mistake gets cleared up during the end of term audit, it still causes the business to either over pay throughout the year or have an unexpected additional payment at the end of the term. In order to not over or underpay your insurance premium, make sure you are placed in the proper classification code.

 

California Workers Compensation Rates 2019

Prices are on the Decline for California Workers Compensation Rates 2019 

California Workers Compensation Rates 2019 are going to cost the business community less than in 2018. The average rate of $1.63 per $100 in payroll by Jan. 1 will be approximately 72 percent lower than when rates peaked in 2015. In 2015 the recommended rate was $2.81 per $100 in payroll.  According to California Insurance Commissioner Dave Jones, “Cost savings in the workers’ compensation system have helped insurers and employers deserve to share in the cost savings through lower premiums,” This is the lowest rates for workers compensation insurance have been in the state of California in five years.

Iconic Golden Gate Bridge, atracts businesses to San Francisco. Those businesses will be paying less for California Workers Compensation Rates 2019.

 

What is contributing to California Workers Compensation Rates 2019

California has some of the highest rates for workers compensation insurance in the country the California Workers Compensation Bureau WCIRB has pointed to a high frequency of permanent disability claims as a reason for higher costs. Also, California has a higher than average cost of handling claims and delivering benefits which also contribute to the state having higher rates for workers compensation. Businesses in the state of California spent $16.2 billion on workers’ compensation last year.

California Workers Compensation Rates 2019 are continuing to decrease for the fifth straight year. These decreases are primarily because of reforms made to fight the opioid epidemic, low inflation for medical and pharmaceutical costs, and increased fraud investigations.

The amount paid out for opioids in 2018 was nearly a fifth of what it was in 2013, dropping from $15,687 to $3,204 per 100 claims, according to WCIRB, the California Workers Compensation Insurance Rating Bureau. A large part of the reason for the decrease in what the workers compensation system paid out for opioid prescriptions is because California enacted a program called CURES (Controlled Substance Utilization Review and Evaluation System). CURES is a database of Schedule II, III and IV controlled substance prescriptions dispensed in California serving the public health, regulatory oversight agencies, and law enforcement.The CURES Program requires dispensing pharmacies, clinics, or other dispensers of Schedule II through IV controlled substances to provide specified dispensing information to the Department of Justice on a weekly basis in a format approved and accepted by the DOJ. This has significantly decreased the amount of opioid abuse throughout the state and that has benefited the workers compensation system.

Iconic Hollywood, California

 

What can Business Owners do to continue saving on California Workers Compensation Rates 2019

California Workers Compensation Rates 2019 are decreasing for the fifth straight year. This represents a decrease of 72 percent over this time period, but businesses in California still pay more for workers comp coverage than nearly all states throughout the country. Because of these high rates, it is important to maximize savings in any way possible. Here are five ways business owners can alter the way they do business in order to save on commercial insurance.

Make sure your business is classified properly

Far too many businesses are classified improperly for purposes of workers compensation insurance. This is attributed to a number of reasons, but many times it is because a business owner rushes through the quoting process when purchasing Workmans Comp Insurance California. An insurance agent can only act upon the information they are given by the business owner when they are shopping for the best coverage to fit a business owners needs. If the business owner does not explain many intricacies of their business, the business may be classified improperly and pay more or less for coverage throughout the year. This mistake usually gets cleared during the end of term audit, but it can cause a business to owe additional premium. Even if the business over pays and is issued a refund, it means the business has tied up valuable cash flow in unnecessary premium payments throughout the year. These unnecessary payments could have been used on other more important business expenses.

Implement a Safety Program

A Safety Program can help limit the cost of workers compensation insurance in California because it will limit both the frequency and severity of claims. When you business has less claims and the claims you do have are small, the insurance carrier is more likely to offer your business a favorable rate for premium.

Start the Safety Program the day employees are hired

Safety Programs should be a part of your company culture. This should not start after a month in which a few accidents occur. Safety should be part of the training program from the moment an employee starts on the job. The more the business (especially the key employees) talk about safety, the more likely that message is to fester throughout the organization.

Add a return to work program to your safety policy

A Return to Work Program can significantly impact your experience modification rating in a positive way. When an employee is hurt and not able to work they are much more likely to develop new habits outside of their daily work routine. The longer they stay off the job, the more likely the injured employee is to become long term unemployed. This can have a drastic impact on the experience modification rating of the business. Businesses that are able to get an employee back on the job, even in a limited capacity, are more likely to have those employees return to permanent work.

Communicate with your Insurance Carrier and Healthcare provider

Communication is key when it comes to navigating the workers compensation system. This is true for the business owner, the injured worker, the insurance agent as well as the underwriter who represents the insurance carrier. The business owner has a responsibility to help the injured worker navigate the workers compensation system and get the care they deserve while not able to work. It is important to keep your agent in the loop throughout this process even though it is the responsibility of the carrier to administer the program. Keeping the agent in the loop can help in the unfortunate event that the carrier is not living up to their end of the bargain. If the agent knows about this process throughout, they can help hold the carrier accountable.

 

 

Workers Compensation Insurance Rates Tennessee 2019

Steep Decline in Workers Compensation Insurance Rates Tennessee 2019

For the sixth year in a row, the Tennessee Business Community will benefit from a decrease in the amount they pay for workers compensation insurance premium. Earlier this month, the Tennessee Department of Commerce and Insurance (TDC&I) announced an approval of a 19% decrease in pure premium rates for Workers Compensation Insurance Rates Tennessee 2019. This reduction is in addition to previous reductions of 12.6% and 12.8% that were approved in 2017 and 2018. This current reduction will go in to effect on the first of March 2019.

Workers Compensation Insurance Rates Tennessee 2019

What Caused a Reduction in Workers Compensation Insurance Rates Tennessee 2019?

The main reasons for a reduction in Workers Compensation Insurance Rates Tennessee 2019 is because employers are seeing fewer significant workplace injuries, a decrease in lost-time frequency, and the overall average cost per case as well as the medical cost per case have decreased.

Johnny CashMany within the industry in the state of Tennessee are complimenting the reforms made to the workers’ compensation system in 2013. These reforms especially contributed to a decrease in lost-time frequency. This means injured workers are spending less time off the job and are returning to full-time work more quickly and more often than in years past. In addition to a decrease in lost-time, both indemnity average cost per case and medical average cost per case have remained “relatively stable” according to representatives from the National Council on Compensation Insurance (NCCI).

Because the insurance carriers have benefited from less costs some of the savings are being redistributed to the business community in the state of Tennessee. These savings are being redistributed in the form of lower Tennessee Workers Compensation Insurance Premiums. Since 2013, Tennessee has seen a reduction of 48% on average for workers compensation premium over the past five years.

Before the most recent reductions in premium, Tennessee was the 28th most affordable state in the country for workers comp coverage according to a biennial study done every two years by the state of Oregon. When this study is released again in March of 2019 Tennessee can expect to be much lower in the rankings.

 

Smokey Mountains Panorama Workers Compensation Insurance Rates Tennessee 2019

Colorado Workers Compensation Premium Rates

Business Owners will soon Celebrate Because of a Decrease in Colorado Workers Compensation Premium Rates 

Colorado Workers Compensation Premium Rates will be decreasing in 2019 by an average rate of more than 10%.  This impact will go in to effect on January 1, 2019 and will be the fourth straight year business owners have enjoyed a decrease in the amount they pay for workers compensation insurance premiums.

Views like this High Mountain Lake contribute to the decrease in Colorado Workers Compensation Premium Rates

The Colorado Division of Insurance previously approved a recommended decrease of 16.7% based on recommendations from the National Council on Compensation Insurance (NCCI).  The Colorado State Provider, Pinnacol, said its rate change is different because it reflects longer-term underlying loss and expense trends.  They are moving forward with a smaller annual decrease in order to minimize volatility in the short term and create stability for business owners over a longer period of time.

As of 2017 rates in Colorado were 19 % lower than the national average. After two years of increased savings, the state system will more than likely rank even better in 2019.  Oregon Workers Compensation Premium Rate Ranking will come out in March of 2019.  This is a study that comes out every two years. The previous rankings was listed in 2017 for the rankings from 2016.  Next March the rankings will again be listed for rates form 2018.

What Contributed to the Colorado Workers Compensation Premium Rates Decreasing for the Fourth Straight Year

The three main aspects that contributed to Colorado Workers Compensation Premium Rates declining are increased cost efficiency, favorable claims trends driven by safer workplaces and a strong Colorado economy. Pinnacoll did not move forward with the full amount of decrease recommended by the Division of Insurance and NCCI because they plan to keep the market stable and give additional savings back to its members via a dividend.  Not giving the full recommended decrease may allow Pinnacol to continue to offer a moderate decrease continually and avoid a large decrease one year followed by an increase the following year to stabilize the market. Leaders at Pinnacol believe this moderate decrease will allow the business to compete in the workers compensation system and keep rates as low as possible for all Colorado businesses.

How is Colorados’ Workers Compensation System Unique?

Colorado is not a partner with the National Council on Compensation Insurance.  Thirty-two states use NCCI to determine recommended pure premium rates for workers compensation. Four states are Monopolistic States meaning they have their own workers compensation system that does not recognize other staets when a business enters that state for any reason. The rest of the states wither have their own state provider or the use a public private partnership.  Colorado uses a public private partnership to administer the provider of last resort within the state workers compensation system. This company is call Pinnacol.  Established more than 100 years ago, Pinnacol was formed to provide some stable workers compensation coverage to businesses within the state no matter the size or anticipated risk of the business. Currently Pinnacol represents approximately 56,000 customers.

 

Nonprofit Directors & Officers Liability Insurance

Nonprofit Directors & Officers Liability Insurance

Directors and Officers Liability Insurance (D&O) are frequently associated with large for-profit companies. Unfortunately, for-profit companies are not the only types of companies who can benefit from Directors and Officers Liability Insurance.  Many people within the non profit industry misunderstand that officers and directors (including trustees) of a nonprofit organization are exposed to liability for their relationship with the non-profit organization. In today’s litigious society, if a person sits on a board for a nonprofit the likelihood that they will at sometime have to face some type of liability is high. Nonprofit Directors and Officers Liability Insurance is a necessary coverage for all non profit organizations.

Nonprofit Directors & Officers Liability Insurance

The primary role of directors and officers of a non profit organization is to manage the fiscal stability of the organization as well as to provide the staff of the organization with an environment where they can safely and successfully execute the mission of the organization. Many instances arise where the nature of the non profit organization is drastically different from the experience of the people who sit on the board. The non profit commonly asks for these people to sit on the board in order to get guidance from their area of expertise. This does not dissolve these leaders from liability relating to all aspects of the organization. This means all organizations should carry adequate insurance coverage. Here are four reasons to carry adequate insurance coverage and three tips to limit exposure of all  nonprofit organization.

4 Reasons to Secure Coverage

Volunteer Protection Act

The Volunteer Protection Act was passed in 1997.  This Volunteer Protection Act states that no volunteer of a nonprofit organization or governmental entity shall be liable for harm caused by an act or omission of the volunteer on behalf of the organization or entity. These laws are limited to areas in which the directors have specific expertise and certifications showing their expertise in any area that benefits the non profit.  These protections are not all encompassing and the directors still face liability if they give faulty advice or offer advice outside of their realm of expertise. Because of the limits of this and other similar state laws, non profit organizations need to secure adequate insurance coverage.

Many Reasons for Officers to Face Liability

Directors and officers can be sued for a range of issues including fiduciary responsibilities, improper conduct by employees and volunteers, failure to fulfill the organization’s non-profit mission, and misuse of donor funds. The number of reasons a lawsuit can occur is long and vast. The only true way to protect a nonprofits board of directors is to secure adequate Nonprofit Directors and Officers Liability Insurance.

Many Nonprofit Organizations Face Liability

Sixty-three percent of nonprofit organizations reported a D&O claim within the past ten years. That is compared to only twenty-seven percent for private companies. Leaders in the nonprofit industry are forced to juggle many responsibilities. These responsibilities include dealing with a tight budget, engaging with volunteers and wealthy donors.  All while serving the mission of the organization. Leaders frequently serve in a leadership position at a nonprofit organization because of a deep passion for the community they serve and the mission of the nonprofit organization. Unfortunately, many of these same leaders forget to use equal discretion in their non profit life as they do in their professional life. This is likely to cause the higher likelihood of a non profit organization to face a lawsuit.  Nonprofit Directors and Officers Liability Insurance is always the best way to protect the leaders within an organization and will up the likelihood of qualified people to serve on the organizations board.

Damages Often Exceed the Assets of the Nonprofit

In most cases, a nonprofit organization is not operating with a huge budget surplus. Most nonprofits do not have an extensive amount of cash on hand. Because of this lack of cash, most non profits do not have the ability to provide legal defense costs when it faces a lawsuit.  Nonprofit Directors and Officers Liability Insurance can cover some or all of the legal costs resulting from lawsuits against leaders of the organization.

3 Tips to Limit Exposure

Understand the Organizations Risk

Taking the time and effort to understand all of the risks a nonprofit organization faces is the first and most important step any organization needs to take in order to prevent the exposure non profit organizations face. Partnering with an independent insurance agent and other risk management professionals is the best way to attempt to understand exactly how much risk the organization faces and the best way to limit the exposure.

Implement Safety Programs 

Adequate safety measures are important for all non-profit organizations. Because of the common use of volunteers it is crucially important to train the key employees on how to administer a safety program. It is equally important to be able to express the importance of that safety program to all volunteers and other third parties associated with the organization.

Purchase Nonprofit Directors and Officers Liability Insurance

The absolute best way to protect a nonprofit organization and its leaders is to purchase Nonprofit Directors and Officers Liability Insurance. Partnering with an independent insurance agent is a great way to get the most comprehensive policy and acquire credits and discounts on behalf of the organization. An independent agent can quote your policy to multiple carriers and force them to compete for your business. Having an insurance professional on the board of directors may be beneficial to many nonprofit organizations.

Class Codes Brief Business Description of Operations we Cover
8864 Social Services Organizations.
8842 Group Homes.
7720 Juvenile Detention Centers.
8742 Social Services Professionals.
8833 Hospital Professionals.
9040 Hospitals- Non Professional (non-medical). Applies to above whereas employee is not medically trained such as maintenance, laundry, food services.
8837 Charitable and Welfare Organizations- MA, TX, WI. Includes organizations that collect, recondition and sale items in their stores.
8861 Charitable and Welfare Organizations- MO, NV, VA. Applies to most organizations that provide charitable or welfare assistance to the needy, challenged, or abused. Organizations may provide accommodations, meals, counseling, etc.
9063 YMCA, YWCA, YMHA, and YWHA institutions.
OTHER Other target classifications used by many non-profits and charitable organizations include: Transportation Services (Meals on Wheels)- 7382, Special Needs Schools- 8868, Companions- 8835, Congregate Meal Sites- 9079, Food Pantry- 8006, Home Health Aides- 8835, Soup Kitchens- 9079.

 

 

9 things to know about Liquor Liability Insurance

Liquor Liability

Liquor Liability Insurance is also known as dramshop liability in many parts of the United States. Most businesses that sell or serve alcohol are either legally required to buy liquor liability insurance, or will benefit and protect their business by having this insurance coverage.  Here are nine things to consider when deciding to buy Liquor Liability Insurance.

Liquor Liability

Dram Shop Laws exist in 43 states

“Dram Shop” laws (a law that makes a business liable if they serve a patron who is clearly intoxicated) exist in forty-three states. Each law is unique to the state it exists in. Most laws require some legal liability to be placed on any business serving alcohol or allowing alcohol to be served on a property owned by the business.

Liquor Liability Laws differ by state

Each state has their own unique laws governing liability. The best way to make sure you have the proper protection for your establishment is to partner with an independent agent who has experience offering coverage to liquor serving establishments.

Most states require coverage

In most states it is a requirement to carry Liquor Liability Insurance just to be in business. Even if the law does not require coverage, it is always best to carry some coverage to protect the business from liability resulting from the actions of intoxicated patrons.

Most Banks or Financial Institutions Require Coverage

Even if your individual state does not require coverage, many banks and other financial institutions require coverage in order to get a loan ona  property or a business line of credit.

You don’t have to serve alcohol to be sued

If you rent out a facility that allows parties where alcohol is served or sold, you can be sued because of the actions of intoxicated guests at your facility. If you allow guests to rent out your property and alcohol is served, you can protect your business with Liquor Liability Insurance.

Some states allow multiple establishments to be defendants in a lawsuit.

Most states only allow them to be defendants in a lawsuit when an intoxicated person causes bodily injury to a third party after attending the establishment. Even if the patron spent a majority of the night consuming alcohol at another location. The establishment must prove that the patron was not or did not appear intoxicated while at their establishment.

Homeowner’s and Commercial Property have Lower Limits

Some Homeowner’s or Commercial Property Insurance Policies cover liquor liability. Typically this coverage is very specific and the limits are much lower then a Liquor Liability Insurance Policy.  If Liquor Liability is covered by a homeowners insurance policy, it commonly is limited to $100,000 to $300,000 in coverage, according to the Insurance Information Institute (I.I.I.).

Underage Drinking is not covered

Most all Liquor Liability Policies do not cover issues regarding underage drinking. This is because underage drinking is a crime. If the establishment served an underage patron, they broke the law. Any time a crime is committed it invalidates an insurance policy. This is why you see managers and bouncers acting like professional wrestlers when they encounter an underage drinker on their premises.

Alcohol Awareness Education

Many carriers offer discounts on liquor liability coverage to establishments that provide alcohol awareness education and training to employees. This is a must for any establishment that offers alcohol. Not only because it can reduce what you pay for commercial insurance, but it can drastically lower the likelihood of a severe incident occurring on your premises.

What Insurance do Bars, Taverns and Restaurants need?

Bars, Taverns and Restaurants

Small Businesses in the Bars, Taverns and Restaurant Industry have many different risks that are unique to this industry. The difference between a dive bar and a four star restaurant are as different as a beauty salon and a gun club. There are different classification codes for different types of insurance coverage depending upon the operations of your business. This is because the risks of a coffee shop, is different from the risks of a cafe or a wine bar. Which classification code the business is classified in is a large part of what determines how much they pay for commercial insurance. This may determine whether the business wants to offer a certain type of food or service depending upon how much it will impact what the business pays for commercial insurance.

Alcohol Consumption at Bars, Taverns and Restaurant

Most states determine if a business is a restaurant (not a bar or tavern) if it makes a certain percentage of its revenue from food and not from alcohol sales. The typical amount to be determined a restaurant is less than 50%. If the business makes more than 50% of its revenue from alcohol sales it is a riskier business and is thus places in a riskier classification code. This causes the business to be charged a higher premium for commercial insurance. The next main factor that impacts a restaurants rate for commercial insurance is whether the restaurant offers alcohol or not at all. If the business does not offer alcohol at all, they obviously eliminate the risk of intoxicated customers. This lowers the most costly risk a bar tavern or restaurant faces.  Also, an additional factor in the amount of premium is if the business does offer alcohol, whether or not the business offers hard alcohol or just beer and wine. Hard alcohol causes intoxication at a faster rate, because of this the business is more likely to have problems related to alcohol consumption.

Hours of Operation for Bars, Taverns and Restaurant

Aside from alcohol consumption the next largest risk that faces Bars, Taverns and Restaurant is the hours of operation. There is much less risk in a diner open from 6:00 AM –  1:00 PM, compared to a bar that serves no food and stays open until 2:00 AM 7 days a week. The latter might carry a few more risks that might turn in to insurance claims. Because of this risk the business is going to pay more in premium for their commercial insurance. Limiting these risks before they turn in to insurance claims can save your business immensely over the long term.

Types of Coverage for Bars, Taverns and Restaurant

Most insurance carriers have business owner’s packages designed specifically for Bars, Taverns and Restaurants. Here are some common coverages you will find included in those packages.

  • General Liability
  • Liquor Liability
  • Commercial Property
  • Business Personal Property
  • Workers Compensation
  • Business Income and Expense Coverage
  • Commercial Crime Coverage
  • Umbrella Coverage

General Liability Insurance covers a business for common slips and falls that happen on the property, Liquor Liability is required by law in most states and the amount of coverage is usually determined by the amount and type of alcohol a restaurant serves. Commercial Property Insurance covers damages to the building and most fixtures attached to the building. Workers’ Compensation is required by law in nearly every state and is coverage to prevent lawsuits for injuries that occur to your employees as part of normal business operations. Business Income and Expense Coverage is an addition to a Commercial Property Policy and will cover your business for loss of revenue due to being closed after damage to your premises. Commercial Crime Coverage will cover your business for crimes committed by your employees while acting on behalf of the company.  Umbrella Coverage is designed to extend the limits of existing policies when those limits have been met. It is important to note that Umbrella Policies only kick in on top of other existing policies. If the cause of the damage is not a covered peril than the Umbrella Policy will not be activated.

 

Below is a list of all the classification codes that might be included as a Restaurant, Bar or Tavern.

Business ISO General Liability:

  • Code: 16920- Restaurant- alcohol sales >75%- Table service, dance floor
  • Code: 16921- Restaurant- alcohol sales >75%- No table service, but dance floor
  • Code: 16930- Restaurant- alcohol sales >75%- Table service, no dance floor
  • Code: 16931- Restaurant- alcohol sales >75%- No table service, no dance floor
  • Code: 16940- Restaurant- alcohol sales >75%- Bar service only, with dance floor
  • Code: 16941- Restaurant- alcohol sales >75%- Bar service only, no dance floor

NCCI Class Codes:

  • 9082 – Traditional Restaurant.
  • 9083 – Fast Food Restaurant
  • 9058 – Restaurants owned or operated in a hotel.
  • 9084 – Restaurant who receives more than 50% of their revenue from the sale of alcohol.

 

 

Hurricane Season is Upon us

15 Tips to get your Home and Office ready for Hurricane Season

Hurricane Season is upon us. August and September are typically the worst months for hurricanes in the United States, especially on the Atlantic Coast and Caribbean. 2017 was the worst year in a decade for Hurricane damage.  Here are 15 tips to prepare your family and small business for this Hurricane Season.

Hurricane Preapredness is more important now than ever.

Plan ahead in order to be Prepared for Hurricane Season

If you wait until a hurricane forms out in the Atlantic to start thinking about what to do in the event of a natural disaster, it may be difficult to adequately prepare your family much less a small business. Preparing in advance for the day your area experiences a natural disaster is the best way to have your family and business prepared.

Create a Formal Plan

Creating a formal plan, putting it in writing, and communicating that plan to your family, friends, neighbors, and employees is the best way to deal with a natural disaster. Incorporating the key employees and advisors is a great way to get the most complete formal plan developed.

Protect Your Staff, First during Hurricane Season

If you and your staff are at work when a natural disaster strikes, it is always important to take care of the health and well-being of your staff, first and foremost. This is more a case for areas of the country that experience earthquakes or tornadoes. These natural disasters have much less warning, but hurricanes typically give the ability to know they are coming for a few days at the least. The strength and severity of the hurricane may be a surprise, but not the fact that they are on the way.  No matter what the circumstances around a hurricane, when your community is faced with one, it is important to help your staff in any way possible.

Keep Communication Open with staff

On top of thinking about your staff first when a disaster strikes, it is equally important to design and implement an effective communication plan for your staff. Have as many forms of communication open as possible. Some staff may prefer to communicate via email or text, others may want a phone call. No matter what time of communication plan you decide on for your organization, practice it ahead of time. This will help the situation run smoothly when disaster actually strikes.

Create a Contact List

In a day and age when most people depend upon their mobile device for a majority of the information they need at any given moment. When a natural disaster strikes, cell phone reception is not always reliable. If this does occur after a hurricane, having a contact list in a safe place will come in handy when you are trying to get ahold of your family, friends, neighbors, and employees.

Hurricane Matthew Damage

Paperwork/Collection of Information

Buying a safe is advisable in the event of a natural disaster. It is important to safely store documents like birth certificates, social security cards, passports, the deed to your house, the title to your cars, the articles of incorporation etc. It is equally important to store a list of phone numbers to organizations like the local hospital, the local police, a printed list of your employees contact info, your insurance company, etc. Do not depend upon these numbers being stored in your phone. Many times when a natural disaster strikes, there is a period of time when cell service is bad or does not work at all.

Take Before and After Photos

Taking before and after photos are especially important for your home and office.  It is important to document your key equipment and the property that your business owns. It might not be a bad idea to put these photos on file with your insurance agent and carrier. The more information you record photographically, the easier the claims process will be with your insurance company.

Designate a Safe Zone within your Home and Office

Designating a meeting location within your house or office and just outside of it is crucial to keeping track of your family and staff in the immediate aftermath of a disaster. If the place to meet is inside the building, make sure it is centralized and away from windows as much as possible.

Stockpile Emergency Supplies just for Hurricane Season

Emergency supplies may be critical in the hours and days immediately following a hurricane. These supplies should include batteries, bottled water, non-perishable food, a first aid kit, entertainment, deck of cards, maybe even a harmonica. There are infinite things that can and should be included in an emergency supply kit. Planning ahead is always the best way to create this kit and checking on it periodically will help to make sure everything is in operating order.

Purchase Backup Power

A back-up generator and solar chargers are beneficial when a disaster strikes. There will more than likely be a period of time when your family and business have to go without power. Having a back up plan for power will make your family and employees much more comfortable while dealing with the results of the natural disaster.

Conduct Ongoing Maintenance of all necessary Power Equipment

Checking on the backup power to make sure it is in proper working order is highly advisable for your home and office. Also, it is wise to store the proper fuel the backup generator. If you decide to use solar as a source for backup power, the device should be tested about once a quarter.

Have a Plan for Windows and Doors during Hurricane Season

Windows and doors are important to take care of in the event of a hurricane. Even if the storm is a tropical storm or category I storm there is more than likely going to be a lot of flying debris as a result of the storm. In some way you should board up all windows and doors of any facility you own or rent. This activity takes minimal effort on your part and can save a lot of damage if done properly.

Keep Trees Trimmed

One thing many people forget in relation to hurricane season is to have the trees, shrubs, and landscaping up to date. Even in the case of the storm not being as strong as forecasted, there will still be extremely high winds. Those winds can do enormous damage to your property when they interact with overgrown tree limbs. Soem time during the month of July or August is a good time to have all the limbs on your property trimmed adequately.

Know the Location of all Power Boxes and Water Shut Off Valves before Hurricane Season

Before a storm is in the forecast, it is important to find the location of your properties water shut-off valve, power box, and surge protector. These are not parts of your property you have to deal with very frequently. For that reason, it is important to to periodically visit this part of your facility and make sure it is in proper working order. It is especially important to do this in the Summer Months prior to hurricane season.

Clean the Gutters before Hurricane Season

In addition to tree limbs and shrubs around your property, it is equally important to clean out the gutters on all properties prior to the late summer and early fall hurricane season. These gutters will be dealing with a large amount of water moving through them during the fall. If they are not cleaned it may result in further damage to the property.

What is a Ghost Policy?

Have you heard the term Ghost Policy?

It is typically referred to in regards to workers compensation insurance.  A Ghost Policy is a term used to describe a specific type of workers’ compensation insurance policy. This type of policy is issued to individual business owners that have no direct coverage value. It can be a great policy for small contractors and subcontractors who have no employees or subcontractors.

Ghost Policy

What is a Ghost Policy?

A ghost policy is a minimum earned premium policy. A policy of this nature commonly costs between $750 and $1000 annually. This is depending on the state the policy is issued and several factors related to the industry the business operates.  One major difference from a traditional workers comp policy is that a Ghost Insurance Policy has no payroll calculated into the premium.  It also excludes all owners from the policy.  This is where the term “Ghost Policy”comes from.  Now the premium will vary by carrier and includes the state expense constant, There are minimum premium amounts required to administer a policy.

Why might someone want a ghost policy?

While many business owners might think it is a waste of money to purchase this type of a policy, but it may be a preferable alternative to going without coverage for a number of reasons.  A Ghost Policy enables a business owner to have a certificate of insurance issued.  Many contracts require a certificate of insurance in order to secure financing and to do business legally in many states.  In addition, a Ghost Insurance Policy can cost a fraction compared to a policy including the owner. Also, in most cases, a Ghost Policy provides employer liability protection in the event an employee is hired or a payment is made to an uninsured subcontractor. Uninsured Subcontractors are especially important to protect your self and your business from, even if you only interact with subcontractors infrequently. Trusting that a subcontractor is self insured is a good way to get your business in to a situation no business owner wants to be in.