What is OSHA and how does it impact Workers Compensation?

OSHA stands for the Occupational Safety and Health Administration. This government organization is part of the United States Department of Labor. It is the department within the government in charge of the safety and health of workers in the workplace. If you have employees in your business, you need to know about regulations. Any business with one or more employees must comply with OSHA regulations. Here is some information about the history and the three main aspects of the organization.

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OSHA was created in 1970 as part of the OSHA Act. This act created to ensure safe and healthful working conditions, as well as to to preserve human capital throughout the workforce of the United States. One primary aspect the training and education of OSHA focuses on is accident prevention. Prior to this act, there were no laws in place to specifically address safety and health in the workplace. Congress created this act in response to workplace accidents amounting to 14,000 worker deaths annually. Since its inception, OSHA has cut the work-fatality rate by more than half. There are three tactics the organization uses to improve workplace safety throughout the United States:  Education, Training and Enforcement.

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Education

One aspect of OSHA that far too many businesses do not realize is their focus on Education and Training. The OSHA Training Institute (OTI) Education Center Program was created in 1992 as a response to a growing number of requests for training from private sector personnel and Federal personnel from other agencies increased throughout the 1980’s. The two most popular courses currently include the #500 Trainer Course in Occupational Safety and Health Standards for the Construction Industry and #501 Trainer Course in Occupational Safety and Health Standards for General Industry. Additional courses include topics such as Hazardous Materials, Machine Guarding, Ergonomics, Confined Space, Excavation, Electrical Standards and Fall Arrest Systems.

Training

OSHA is most known for enforcement and instituting fines, but arguably the most important part of OSHA is Employee Training. As part of its duty to keep the workforce safe and productive, OSHA requires all businesses to create an emergency action plan and take steps to set up a training program to train all employees in all aspects of the OSHA plan. What must be included in this plan is how to deal with hazardous substances, blood-borne pathogens, emergency situations, and what to do if an inspector comes to your workplace.

Enforcement

In addition to education and training, OSHA is tasked with enforcement. This is what the organization is most known for. Officials can issue fines ranging into the tens of thousands of dollars for violations, and they can refer violators for criminal prosecution if they deem such action is warranted. Any business with employees must comply with regulations. If your small business had 10 or fewer employees during the last year, you don’t have to file an injury or illness reports, but you still must comply with all other regulations. It is the responsibility of the business owner to ensure their business and all employees are trained to be in compliance with OSHA Regulations.

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California Workers Comp Rates 2020 are Declining 5.7%

Marking 5 Consecutive Years of Continuing Declines

California Workers Comp Rates 2020 are going to cost the business community less. This is because in August of 2019, the Workers’ Compensation Insurance Rating Bureau (WCIRB) voted to lower Workers Comp Pure Premium Rates by an average of 5.7% below the rates of 2019. In 2019 Rates were down 23.5 percent compared to what businesses paid in 2018.  This year marks the fifth year of declines and the ninth consecutive biannual decrease dating all the way back to 2015. These decreases mark a total decline of approximately 44 percent.

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What is contributing to Declining California Workers Compensation Rates in 2020?

As of  Jan. 1, 2020 advisory pure premium rates are $1.58 per $100 of payroll. This represents a significant decline of 5.7% compared to California Workers Comp Rates 2019. These declines are continuing because of continued downward loss development, claim settlements accelerating, declining pharmaceutical costs, as well as a decline in the number of filed liens. When this many factors are improving, insurance carriers are able to pass some of those savings on to the businesses purchasing coverage.

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What is limiting the declines from being larger?

California still suffers from the most expensive workers comp rates in the entire country. There are numerous reasons rates remain high despite multiple years of declining premium. In the filing, the WCIRB also noted that factors such as increases in cumulative trauma claims, rising claim severities and continued high levels of allocated loss adjustment expenses are moderating the pure premium rate declines and warrant continued monitoring.

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Information about Inclusions and Exclusions for California Workers Comp

In the state of California, all employers are required to purchase workers comp regardless of the number of employees. Sole Proprietors are not automatically included for coverage and are not required to carry coverage on themselves. SOle Proprietors are allowed to be included if they so choose by using the Acord 130 application. Partners are automatically included for coverage and are not allowed to be exempt. Corporate Officers, who are the sole shareholder, are excluded from coverage. LLC Members who work within the business are included for coverage unless the elect to be covered using the Acord 130 form.

Payroll Requirements for California Business Owners in 2020

The Payroll Requirements for Sole Proprietors who decide to include themselves for coverage is a minimum payroll amount of $52,000 and a maximum of $133,900 for rating purposes (As of 01/01/2019). Partners, Officers and LLC Members who are included for coverage must utilize a minimum payroll of $52,000 and a maximum of $133,900 for the purpose of rating workers comp premium (As of 01/01/2018).

 

Joisted Masonry

Joisted Masonry is one of six building construction categories established by Insurance Services Office, Inc. (ISO). These six categories are part of the Commercial Lines Manual (CLM) and is designed for the purpose of developing rates for insuring commercial property bas upon the likelihood of damage by fire. The CLM description of Joisted Masonry Construction is considered a building with exterior walls of masonry or fire-resistive construction equipment rated for not less than one hour and with combustible floors and roofs.

 

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This classification includes worked done on exterior walls with combustible floor and roof. The types of materials used in these walls include adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or other similar materials. The code associated with Joisted Masonry Construction ranks a facility 1-6 based upon how fire resistant the facility is that the business is located or is working on.

Joisted Masonry, Exterior walls, floors, and roof of masonry or fire-resistive materials.

ISO Class 1 is Called Frame. 

Exterior walls of wood, brick veneer, stone veneer, wood ironclad, or stucco on wood. (Construction Code 1)

ISO Class 2 is Called Joisted Masonry.

Exterior walls of masonry material (adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials) with combustible floor and roof.

ISO Class 3 is Called Non Combustible

Exterior walls, floor, and supports made of metal, asbestos, gypsum, or other noncombustible materials.

ISO Class 4 is Called Masonry Non Combustible. 

Same as joisted masonry except that the floors and roof are of metal or other noncombustible materials.

ISO Class 5 is Called Modified or Semi Fire Resistive.

Exterior walls, floors, and roof of masonry or fire-resistive material with a fire resistance rating of at least 1 hour but less than 2 hours.

ISO Class 6 is Called Fire Resistive. 

Exterior walls, floors, and roof of masonry or fire-resistive materials with a fire resistance rating of at least 2 hours.

How a Business Benefits from a Modified Hammer Clause

Full and Modified Hammer Clauses help take emotion out of the decision to settle a lawsuit. 

In many industries, the reputation of a person or business is paramount. When a business faces a lawsuit, some business owners value their reputation more then they value the cost to settling a lawsuit. Insurance carriers have decades of historical data that allow them to fairly accurately predict how much a lawsuit will cost to fight. In most cases, it is more cost effective to settle for a certain amount as opposed to fighting a claim in the court of law. When a business owner decides to fight a lawsuit, a Hammer Clause is in place to force the business to take on some or all of the costs associated with fighting the lawsuit. The Hammer Clause deals with the additional costs on top of the settlement offered. These clauses are offered in two ways: Full and Modified. A Modified Hammer Clause is the most common form of Hammer Clause because it gives the business owners options, but requires the business to take on some of the risk.

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A Full Hammer Clause is put in place to force a business to settle for the recommended amount or take on the full costs in addition to the recommended settlement. When a Modified Hammer Clause is in place the insurance carrier agrees to split the amount of the additional costs with the insured. This is the amount in addition to the recommended settlement plus defense costs. Modified Hammer Clauses are most often offerred in one of two ways. Those two ways are coinsurance percentages of 50/50 and 70/30. This represents the amount the insurance carrier is willing to pay to fight a laawsuit instead of settling. If the Modified Hammer Clause is 70/30 the insurer pays 70 percent of the additional costs, but the business is responsible for 30 percent of the additional costs. The total amount an insurance carrier will pay is limited to the limits of the policy. It will not cover the entire amount of the lawsuit. This is a major reason why Hammer Clauses are in place. To force or encourage a business owner to settle for a well-calculated amount and take emotion out of the decision.

Full Hammer Clause

A Full Hammer Clause can take emotion out of a decision

A Hammer Clause is a clause within an insurance policy that allows an insurer to force the insured to settle a claim for an amount they recommend. A Hammer Clause is also known as a blackmail clause, settlement cap provision, coinsurance or consent to settlement provision. There are multiple ways the clause can be set up. The two most common are a Full and a Modified Hammer Clause.

Hammer, Nails, Wood, Board, Tool, Work

The Full Hammer Clause is a provision within an insurance policy that states, if the insured refuses to settle for a recommended amount, the insurance carrier will pay only the amount for which the claim could have been settled, plus defense costs incurred up to the limits of the policy. When a Full Clause is in place, the insured takes on the full amount of the additional settlement costs.

A Modified Hammer Clause gives the insured the option to refuse to settle, but they take on some of the additional costs to settle the case. In most instances, if the costs are more than the offered settlement the insurance carrier and the insured split the additional costs 50/50. Some policies even require the insured to take on a split as high as 70/30.

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Why might a Full Hammer Clause be beneficial?

A Full Hammer Clause, in most cases, is in the best financial interest of the insurer. Much of the time, it is in the financial best interest of both the insurer and the insured. One thing for a business owner to remember is that insurance carriers interact with businesses facing insurance claims on a daily basis. The carriers have historical data about the costs to defend a business through the court system. This data allows the insured to make a fairly accurate assumption about how much the claim will cost to litigate. Far too often, business owners allow emotions to get in the way of sound judgment. A Full Hammer Clause gives the Insurance Carrier the ability to force the insured to take a recommended settlement in order to avoid additional costs. No matter what type of Hammer Clause is in place it is usually in the best interest of the business to take the guidance of their insurance agent and insurance carrier.

Amazon Delivery Service Partner Program

The Amazon Delivery Service Partner Program is a brand new partner program of Amazon. The intentions of this program are to allow drivers to become their own boss by starting a small business and being assigned a route to deliver for Amazon. Some businesses are even offered a number of routes by Amazon. The program has developed because of an ever-growing demand of packages needing to be delivered for Amazon. This Amazon Partner Program has very strict guidelines that new business owners must follow in order to be offered an Amazon Delivery Service Partner Route. Once approved, the new business owner is offered a number of benefits a traditional delivery business does not have.

The Ten Primary Benefits Include:

  • Workman, Delivers, Three Boxes, Isolated, Box Mover for an Amazon Delivery Service Partner Owner Training
  • Employee Training
  • Technology
  • On-Demand Technical Support
  • A Dedicated Account Manager
  • Exclusive Pricing on Amazon Branded Vans
  • Vehicle Maintenance
  • Accounting Services
  • Legal Support
  • 20 Years of Logistics Experience

 

Owner Training

Amazon Provides an extensive three-week training program for new business owners. This program is a requirement before business owners start delivering for Amazon as a part of this program. The first week is an introduction to Amazon in Seattle. The introduction is followed by two weeks in the field working alongside an existing owner and driver. This portion of the program is engineered to help new owners learn the tips and tricks of operating a successful delivery business.

Employee Training

Part of the training for new business owners includes detailed information about how to hire and train new employees. Recruiting and retaining superior drivers are an ongoing part of the success of your operation. Amazon has high standards and have developed a customer-obsessed culture. This culture demands the business owner to motivate their team to exceed expectations on every delivery.

Technology for An Amazon Delivery Service Partner

Technology can be extremely expensive. Few industries rely on accurate accounting of products and services more then a delivery service business. Amazon has technology specifically designed for the drivers and the business of Amazon.

Logistics, Personal, Group, Gears of an Amazon Delivery Service Partner Business

On-Demand Technical Support

Amazon provides their partner business owners with on-demand technical support. When a business relies on technology for crucial aspects of the business, the technology the business depends upon is eventually going to fail. Amazon has dedicated technical support just for Amazon Delivery Services Partners.

A Dedicated Account Manager

Each Amazon Delivery Service Partner is assigned their own dedicated Account Manager to serve as a point of contact for communication throughout Amazon.

Exclusive Pricing on Amazon Branded Vans

Purchasing or leasing vans is a large expense for a delivery business. Amazon has vehicles that are designed specifically for the type of work Amazon Delivery Services Partners perform.

Auto Repair, Oil Change, Oil, Auto, Shop, Repair, Work, Vehicle Maintenance for an Amazon Delivery Service Partner Business

Vehicle Maintenance

In addition to offering special pricing on Amazon Branded Vans, Amazon offers a vehicle maintenance program specifically designed for The Amazon Delivery Service Partner Program.

Accounting Services

Keeping the books straight can tremendously difficult for a start-up. Especially as the start-up grows at a rapid pace. Amazon offers their qualified partners help through their own accounting services designed specifically for the Amazon Delivery Services Partner Program.

Legal Support for An Amazon Delivery Service Partner

I addition to accounting services, Amazon provides their certified partners with some legal support when the need arises.

20 Years of Logistics Experience

Probably the most valuable aspect of partnering with Amazon is access to the wealth of knowledge that comes with 20 years of logistical experience. Amazon is one of the biggest businesses in the world and it has been for many years. As your business grows, you can leverage this partnership to gain access to Amazons vast experience.

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If you currently are or are considering becoming an Amazon Delivery Service partner, you eventually are going to need Amazon Delivery Service Partners Insurance. My Insurance Question is a part of the Insurance Shop LLC. The Insurance Shop has developed relationships with multiple carriers who are hungry to offer coverage to businesses operating in this niche industry. Give us a call at 800-800-4864 to speak with one of our insurance specialists today.

 

Employment Practices Liability Insurance (EPLI) for Small and Medium Sized Businesses

Employment Practices Liability Insurance (EPLI) is a type of liability insurance that covers a business for wrongful acts that occur throughout the employment process. According to Trusted Choice, over the last 20 years employee lawsuits have risen roughly 400 percent. Wrongful termination suits have increased more than 260 percent during that same time period. Additionally, according to a study done by Advisen, only 23 percent of companies with fewer than 100 employees have a Employment Practices Liability Insurance Policy in place. This means 77 percent of companies in the United States who have fewer than 100 employees are exposed to the full liability of an employment related lawsuit. In many cases, a small business is forced to close when faced with an employment related lawsuit. Adding an EPLI Policy to a businesses Business Owner’s Policy (BOP) is the most wise decision to properly protect most businesses.

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The most common way a business faces a lawsuit that causes a employment lawsuit is through wrongful termination, discrimination, sexual harassment, and retaliation. Far too many business owners think their employees will never sue them. This is a thought that sinks far too many business owners. Especially considering how an EPLI policy can be added to most Business Owners Policies (BOP) for a relatively small amount compared to the costs of an actual lawsuit.

An Employment Practices Liability Insurance Policy (EPLI) is written on a claims-made basis. This means the policy will cover the business depending upon when the lawsuit is filed, not based upon when the action within the lawsuit occurred. Some types of insurance policies are sold on an Occurrence basis, but not most EPLI Policies. No matter which type of policy you go with, it is important to make certain, the business owner and management know exactly what type of policy they are purchasing. It is equally important to know exactly what is and is not covered by these policies.

What is Covered by an EPLI Policy?

There are many things that are and are not covered by an EPLI Policy. Some common types of lawsuits that are covered by an EPLI Policy are wrongful termination, retaliation, sexual harassment, discrimination, breach of contract, negligent evaluation, failure to promote, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress, and even mismanagement of employee benefit plans. Not all policies will cover all of these lawsuits. Each carrier has their own specific exclusions. It is important to develop a working relationship with your insurance agent to fully understand what is and what is not covered by each particular policy. Working with an independent insurance agent is a great way to get unbiased advice from an insider. A captive agent will only be able to tell you the positive sides of the policy their carrier offers. An independent agent can offer you coverage from multiple carriers and give you inside knowledge about the positives and negatives of partnering with each carrier.

What is not Covered by an EPLI Policy?

An EPLI Policy covers many forms of employment risks and the costs associated with related lawsuits. Each carrier has their own specific exclusions related to all insurance policies. This is especially true when it comes to an Employment Practices Liability Insurance Policy. Some common exclusions include violations of the National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, Occupational Safety and Health Act (OSHA), and the Employee Retirement Income Security Act (ERISA). Some carriers include exclusions for violations of the states individual workers compensation laws. In addition to breaking laws, most EPLI Policies do not cover punitive damages.

How can a Business Limit EPLI Lawsuits?

When a business decides to purchase an EPLI Policy, there are many elements of the business that a carrier takes into account when they determine what to charge the business for insurance premium. In an ideal world, a business will never face a lawsuit of any kind. Limiting the frequency and severity of all insurance claims is the best business practice. Hiring experienced human resource professionals, developing a thorough onboarding program for new hires, and implementing a well-documented safety program are all excellent ways to lower insurance claims of all types. These programs can also help limit employment related lawsuits.

In addition to limiting all types of insurance claims, there are several things a business can focus on that can limit the business facing an employment related lawsuit.

  • Hire Selectively
  • Thoroughly Educate Management and Staff
  • Establish Clear Policy and Procedures
  • Provide Clear and Concise Job Descriptions
  • Provide ongoing Employee Reviews
  • Document Everything

Hire Selectively

When it comes to hiring selectively, it is important to thoroughly screen all employees. There are a number of ways to do this. A business can hire experienced Human Resource Professionals Internally or outsource this duty. If the business has the funding, it may be best to outsource with the help of an internal human resource professional. No matter how your business decides to approach hiring, it is important to find and promote the right people.

Thoroughly Educate Management and Staff

If a business is concerned about limiting an employment lawsuit, focusing on training management and staff should be at the top of the priority list. Some of these topics may not be comfortable to discuss, but it is necessary to discuss these topics in order to prevent an employment lawsuit. Including diversity and sensitivity training as part of your ongoing training plan is worth considering.

Establish Clear Policies and Procedures

It is equally important to create clearly written policies and procedures for all divisions, departments, teams, and individual employees. Post these policies in a handbook you give to all new hires and some of the highlights should be posted in common areas where all employees have access to them. In addition, it is important to create a formal policy for how an employee can report concerns and a way for management to respond.

Provide Clear and Concise Job Descriptions

One thing that is common in many employment lawsuits is expectations that are in very different places from the perspective of the company compared to the expectations of the employee. If you can develop clear and concise job descriptions and expectations for all employees, it will go a long way towards preventing any and all lawsuits.

Provide Ongoing Employee Reviews

In an effort to open communication with all employees, employee reviews should be held regularly. These reviews should be held regularly in order to keep everyone on board with what is expected of them and what is expected of the company. In the past, these reviews would be done on a yearly basis. In today’s business environment, it is important to have these conversations more frequently. The conversations do not need to be weekly or even monthly, but they need to be more frequent than once a year. When managers meet with employees, it is important to ask open ended questions and to actively listen to the concerns of the players.

Document Everything

Each business will find a different way to prevent employment lawsuits. As a business develops the best plan to prevent employment lawsuits, it is important to document every step of the process. When a lawsuit does occur, this documentation may be the difference between a lawsuit being a slight hiccup and something that causes the business to close its doors permanently.

Clerical Office Employee

NCCI Class Code 8810 | Clerical and Office Employee

In most states, classification code 8810 is meant for Clerical and Office Employees. What distinguishes an employee as a clerical or office employee is difficult for many businesses to determine. Because of this difficulty, 8810 tends to be one of the most misused, misunderstood and most common misclassified class codes.  Many businesses improperly place some or all of their staff in this classification code because the business will enjoy some of the lowest rates for workers compensation premium of any classification code.

An Office Employee going over their notes before an important business meeting.

In many instances, a business owner will attempt to place all employees under the classification code 8810 – Clerical and Office Employee. This is because this class code enjoys the lowest rates for workers compensation premium. Some of the employees may actually belong in this class code, but often times a majority of them do not. The main qualification to be listed in this class code is that the employee needs to always perform their job where there is some form of physical separation from employees engaged in other high hazard work *think walls and doors). Employees in this classification should also not have any type of contact or supervisory role over employees involved in physical labor. The area an employee classified as 8810 –  Clerical and Office Employee should also be separate from any storage areas where inventory is secured.

When an office employee begins to perform any duties outside of their clerical duties, they more than likely need to have a different classification. This may include something as simple as walking or driving off the property to get the mail. A good example of this would be when a non-profit has a program director who spends a majority of their work week behind a desk, but they also have direct supervisory duties. Because these supervisory duties take them away from the office and force them to interact with the general public and the entire staff involved with other exposures, the employee cannot be classified 8810. WHen this occurs the employee must be placed the highest rated risk classification represented by those additional duties. Many employers combat this cost by assigning these additional duties to one or a select few employees.

Computer, Laptop, Technology, Office, Business

It is important to pay particularly close attention to the separation of exposure between different work hazards. When an employee is misclassified into a less risky classification code like clerical office employees noc, it almost always gets cleared up during the end of term audit. When it does get noticed, the employer will owe additional premium in order to keep coverage in place moving forward. This can be a significant cost to a business at an inopportune time.

 

8810 Clerical Office Employees. This is the most common class code utilized and is common to most policies regardless of the nature of business because most businesses have one or more clerical office employees. Common duties include financial, drafting, telephone answering, inside sales, designers, editors, programmers, and general office staff.

 

What Underwriters like and dislike about Janitorial Services Companies

Janitorial Services Companies are placed in NCCI Class Code 9014 for Workers Comp

Janitorial Services Companies can be placed within a number of different NCCI Class Codes for purposes of Workers Compensation Insurance. NCCI stands for the National Council on Compensation Insurance. This organization is the foremost authority for state workers compensation systems when it comes to determining classification codes and recommending pure premium rates. NCCI gathers data, analyzes industry trends, provides objective insurance rate and loss cost recommendations. For most states there are around 700 different classification codes business are placed within.

Janitorial Services Companies are primarily placed within NCCI Class Code 9014. The duties of businesses that operate in this industry include keeping businesses clean by dusting, mopping, vacuuming, waxing, and even polishing floors. Some businesses have employees who empty trash, clean interior walls, as well as cleaning, sanitizing, and deodorizing restrooms. There are many aspects of this business that make it either a favorable or unfavorable business for an insurance carrier.

Janitorial Services Companies use Cleaning Supplies, Vacuum, Broom, Duster, Sponge

The easiest type of Janitorial Services company for an insurance carrier to offer workers compensation coverage to is an office cleaning company. This is because these businesses have less risky operations than businesses who clean exterior or industrial settings. Because of the lower risk for office cleaning companies, this classification code is the easiest to get insured and usually at the best rates. For this reason, most businesses attempt to operate in this part of the industry exclusively. For businesses that operate in other parts of this industry (carpet cleaning, floor waxing, power washing, window washing, etc.), there are many things those businesses need to consider in relation to workers compensation coverage. All businesses in the janitorial services industry can benefit from an increased focus on operating a safe business. Here are four things all businesses can do to show an underwriter they are focused on limiting insurance claims.

Mop, Bucket, Chores, Housework, Clean

Types of Activities Underwriters Like about a Janitorial Services Company

Some Janitorial Services Companies operate in more risky portions of the industry. Those companies must prepare for a higher rate for all forms of commercial insurance and those companies must better prepare for keeping their employees safe.  No matter the duties of the employees in this industry, it is important for the leadership of a business to implement activities underwriters like about a Janitorial Services Companies. Here are four activities that help a business get coverage and limit what the business pays for premium.

Safety Program

A Safety Program is the primary aspect a business can use to improve the results of the business. An effective safety program can limit workplace injuries, raise the morale of the staff, lower the frequency and severity of insurance claims, and increase the productivity of the business. A safety program can do this by creating a workplace culture that has employees thinking about the health and well-being of everyone involved in the business. If this is implemented effectively, it will lower the frequency and the severity of all insurance claims the business files. When the business files less workers comp claims it is because the business is experiencing less injured employees. Less injured employees means the business has created an environment that includes healthy employees. Healthy employees tend to contribute to a higher overall morale throughout the workforce. Conversely, when employees are healthy and happy, they are more likely to be more productive.

Return-to-Work Program

A Return-to-Work Program is a natural extension of a businesses safety program. It is a program most business hope they never have to use, or a program a business at least rarely uses. The best way to prepare for this is to establish a safety committee with employees from all levels of the organization. If you have an employee who has dealt with a workplace injury and the workers compensation system, it may be a wise decision to place that employee on this committee. Creating light duty activities for employees will help get them back to work quicker and give them less time to develop routines outside of their work environment. The sooner an injured employee gets back to work in any capacity, the more likely they are to eventually return to full-time permanent work.

Well-Maintained Equipment

Equipment ages and wears out over time. There is no way to avoid wear and tear on the equipment of a janitorial services company. With careful attention, maintaining equipment can get more useful life and productivity out of most equipment. For the business, this means there is less downtime and increase job site productivity. It also means less injured workers because of faulty equipment. Proper maintenance will also result in a higher resale value when the time comes to sell it.

Maintaining equipment begins with picking the right equipment in the first place and operating the used equipment in a smart, safe and efficient manner. If you require your employees to document this maintenance, it can create an atmosphere where maintenance and safety are part of the job. In addition to safety and longevity, preventative maintenance can also reduce the likelihood of theft.

Businesses that Work with OSHA

Many businesses attempt to spend as little time as possible interacting with a government agency. In some instances, this is a wise decision because interacting with a government agency can bring the eyes of regulators at many levels of the government. OSHA is one agency where this is not the case. OSHA offers many services to help a business remain safe. They will even come out to a facility upon request and give recommendation about the safety of operations. There are many ways OSHA can help a business remain safe. If a business does use any of the recommendations of OSHA, it should be documented and used when acquiring all forms of commercial insurance.

Cleanliness, Maid, Maintains, Cleaning

The Types of Activities Underwriters do not like Businesses to Partake?

Working at Heights

Anything that is done at heights (especially if it is done above ten feet in height),  makes an insurance carrier less likely to want to offer coverage to that business.  Window Washing is the primary reason an employee works at heights. Working at height causes workers compensation claims to be much more severe. When a business experiences a severe claim it sticks with their experience modification rating for a three year period. This can cause premium to be elevated for a three year period and can make it more difficult for some businesses to even get coverage offered on the open market.

Industrial Settings

Janitorial Services Companies that operate in an Industrial Setting tend to have more severe claims compared to businesses that operate primarily indoors. Especially when indoor companies operate primarily in an office setting. In many instances, businesses who operate in an industrial setting have to purchase coverage from the state’s assigned risk provider. This is because they are so risky many carriers are not willing to offer coverage to the business at all. The assigned risk provider almost exclusively offers more expensive rates compared to the open market.

Maintenance and Repair Work

NCCI Class Code 9014 allows for some maintenance and minor repair work. Most insurance carriers allow up to 10% of business be related to maintenance and repair work. Maintenance and repair work significantly raises the frequency of claims, which negatively impacts a businesses loss cost. The loss cost is the primary number an underwriter uses to determine what a business must pay for coverage.

Residential Cleaning

Residential cleaning companies operate in a less controlled environment. Most employees are driving to a third party location and are unsupervised. The fact that there is a driving risks raises both the frequency and especially the severity of insurance claims filed by these companies. Because of this elevated risk, insurance carriers are less likely to offer coverage to businesses. If those businesses are not able to find coverage on the open market, they are forced to buy coverage from the state provider. NCCI Class Code 9014 allows for residential cleaning if it is less than 50% of operations.

Commercial Insurance Needs for Retail Businesses

Retail establishments have a large amount of foot traffic compared to other businesses. This can cause a larger amount of risk to be elevated for both general liability and workers compensation claims. Because of more frequent contact between employees and the general public, employees are more likely to come down with the flu or the common cold. These days missed from work may or may not cause a workers compensation claim, but they definitely contribute to a loss of productivity. When one employee is out sick other employees have to pick up the slack for that missing employees. This may create risks in other areas of the business. Slips, Trips, and Falls are the most common problem in retail establishments.

Retail Clothing Store

Retail stores vary based on what they sell, where they are located, what other and what other services they offer. Additional risks may be taken on by businesses that offer delivery and installation of products. In some instances, these services are offered by vendors who rent space from the store. Because of the vast differences in the types of retail establishments, there are a number of different classification codes for employees working at a retail establishment. It is important to make sure all employees are classified properly.

What can Retail Owners and Operators due to save on Commercial Insurance?

Partner with an Independent Agent

When a Retail Business partners with an independent insurance agent, they are able to get multiple quotes from multiple carriers all with one phone call. This is because an independent agent partners with many carriers to find the right solution to their clients needs. A captive agent is limited to the offerings of the carrier they represent. Partnering with an independent insurance agent makes it easier to get multiple quotes from one agent and they can give you unbiased advice about both the pros and cons of each policy. They also can give you insight into the positives and negatives of doing business with each carrier. This allows the business owner to know what they are getting into with the relationship with their insurance carrier.

Shop Around your Policies

One of the best things an independent insurance agent can do for a business owner is help them shop around their policy from year to year. It is not wise to switch on the drop of a hat because of a slight drop in price, but it is smart to make sure your carrier is competitive with the marketplace. An independent insurance agent can get multiple quotes all in one place. It may be a good idea to also contact a few captive agents and maybe even another independent insurance agent. Now if you like your agent, it may be worthwhile to pay a small amount more in order to continue your relationship with them. It is equally important to shop around to make sure your agent has your best interest in mind as well as your carrier.

Safety Programs

Having a well-documented safety program in place is essential for retail stores. It should be an extensive part of the new hire training and it should be done regularly throughout the year with all employees. These do not have to be extensive training programs. They can be as short as a 15 minute conversation or even watching a workplace safety video. They should always be documented and they should occur on a regular basis. The frequency of your meetings is dependent upon your business and the workplace safety expert you consult. It is helpful to create a committee to be in charge of the workplace safety program. This is important because these employees can be supporters of the program and can garner support throughout all employees.

Store, Clothing, Shop, Bouique, Clothes

What Types of Insurance Should a Retail Business Have?

  • General Liability Insurance
  • Property Insurance
  • Inland Marine Coverage
  • Workers Compensation Insurance

General Liability Insurance

General Liability Insurance protects a business from common Slips, Trips, and Falls. These types of claims are higher in this industry because of the amount of foot traffic throughout the facility. It is important to remember that General Liability Insurance is not all encompassing. There are exclusion to every policy and every carrier has their own specifics. It is important to speak long and honestly with your agent about all the intricacies of your business in an attempt to properly insure your business.

Commercial Property Insurance

Business Property Insurance are not huge for retailers. Most facilities include some form of electrical wiring as well as heating and cooling systems. It is important to make sure the facility is in proper condition. Creating a safety committee to periodically check the status of the facility.

 Inland Marine Coverage

Inland marine insurance is designed to protect equipment that is frequently in transit or stored at a third party location. If the retail business has pop-ups at other locations, inland marine is needed to protect the equipment being used away from the location.

Workers Compensation

Retail Shops have a large amount of risks when it comes to Workers Compensation Insurance. A majority of these risks stem from the amount of exposure to foot traffic. Developing a safety program to deal with these risks and starting the training of this program from the day a person is hired, is the best way to limit the frequency and severity of claims.

Sign, Open, Open Sign, Business, Store

SIC Business Insurance Codes:

  • 5311: Department Stores
  • 5722: Appliance Stores
  • 5941: Sporting Goods Stores and Bicycle Shops
  • 5651: Family Clothing Stores
  • 5912: Drug Stores and Proprietary Stores
  • 5331: Variety Stores
  • 5399: General Merchandise Stores
  • 5932: Used Merchandise Stores

NAICS Liability Classifications:

  • 452111: Department Store
  • 452112: Discount Stores
  • 443141: Household Appliance Stores
  • 451110: Sporting Goods Stores
  • 448140: Family Clothing Stores
  • 446110: Pharmacies and Drug Stores
  • 452990: Other General Merchandise Stores
  • 442299: Home Furnishing Stores
  • 453310: Used Merchandise Stores

Business ISO General Liability:

  • 12356: Department or Discount Stores
  • 10026: Antique Stores
  • 18206: Sporting Good or Athletic Equipment Stores
  • 11127: Clothing and Apparel Stores
  • 12374: Drugstores—No Food or Beverage
  • 18911: Variety Stores
  • 11155: Coin, Stamp and Book Stores
  • 16881: Secondhand Stores

Common Workers Compensation Class Codes:

  • 8039: Retail Department Stores
  • 8044: Furniture Store and Drivers
  • 8008: Clothing and Apparel Stores
  • 8045: Retail Drug Stores
  • 8017: Stores, Retail—Not Classified Elsewhere
  • 8010: Hardware Stores
  • 8013: Jewelry Stores
  • 8046: Auto Parts and Accessories Stores