Dram Shop Insurance

What is Dram Shop Insurance and How Should a Business Purchase Coverage?

Dram Shop Insurance is required by law in nearly every state in the country. In the past, Dram Shop was a term that referred to places where alcohol was sold by the dram (a small quantity of liquid). Dram Shop Liability Laws have been created to protect the public from intoxicated individuals who have been over-served by an establishment. Dram Shop Insurance is a type of insurance required by businesses that sell and serve alcoholic beverages. Most within the insurance industry now use the term Liquor Liability Insurance as it is more straight-forward and easier to remember.

What Determines Cost of Dram Shop Insurance?

There are a number of factors that determine what a business pays for Dram Shop Insurance. Like a normal commercial insurance policy, it depends upon the state you operate in, the revenue of your business, and the number of employees. Specific to Dram Shop Insurance the determining factors include the types of alcohol sold, the closing time, the amount of food compared to alcohol receipts, the square footage of the facility, the average price of the drinks, the types of entertainment on the premises (live music, karaoke,etc.), and whether the establishment has bouncer manning the door. Having well-designed protocols in place for how your staff should deal with intoxicated customers goes a long ways towards limiting the frequency and severity of claims within your business.

What is Covered by Dram Shop Insurance?

Dram Shop Insurance covers many claims your business may face. Some of those covered claims include bodily injury, property damage, coverage for intoxicated employees, fights, legal costs, and mental anguish. Not what is covered and how much is covered will differ depending upon the carrier you are purchasing from and the state you are operating in. Businesses should review all policies extremely carefully before purchasing coverage for their business. Partnering with an independent insurance agent is a great way to get unbiased advice about the differences between coverages from carrier to carrier.

The big difference between Dram Shop Insurance Policies are the type of carrier a business is purchasing coverage from. The two types of carriers include admitted and non-admitted carriers. An Admitted Carrier is required to file rates with the state and follow rules and regulations set by each state’s Department of Insurance. A Non-admitted Carrier is not required to file rates or follow the same state regulations. Non-admitted Carriers do have to prove to the state they operate in that they are able to financially pay the claims their policyholders file. In addition to admitted vs. non-admitted carriers it is important for business owners to check the financial strength of the carrier as reported by the AM Best or by Standard & Poor’s.

3 Types of Liability Insurance Every Technology Company Should Have?

General, Professional, and Cyber Liability Insurance

Technology Companies have enormous risks. Those risks depend upon whether the business sells or services technology products. Some businesses store data about the businesses customers. Other businesses create technology that other businesses use to store the data of those customers. No matter what type of risk a business faces, there are three types of liability insurance all technology companies should secure. Those policies are General, Professional, and Cyber Liability Insurance.

Technology Liability Insurance

General Liability Insurance

General Liability Insurance for Small Business is the most important type of insurance policy a company can secure.  General Liability Insurance helps policyholders from the third party risks associated with lawsuits and other types of claims. Those claims include bodily injury and property damage that is caused by direct or indirect actions of the insured. For most businesses a general liability claim can be for something as simple as a customer slipping on wet floors inside a restaurant or when when a product sold breaks and causes an injury. For technology companies, General Liability Insurance will cover legal expenses when a business is sued for customer injuries, property damage, and slander. For many within the insurance industry, general liability insurance is referred to as the first line of defense for a business. It should not be the only coverage a business secures.

Professional Liability Insurance

Professional Liability Insurance is also referred to as Errors and Omissions Insurance. Professional Liability Insurance is coverage for professional businesses that give expert advice or provide technology services for a fee. The coverage prevents businesses from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in a civil lawsuit.

Here are five types of claims that are commonly covered by a Professional Liability Insurance Policy:

  • Breach of Contract: Breach of Contract that occurs when one or both parties do not live up to a contract that was previously agreed upon.
  • Fraud: Fraud occurs when one party intentionally lies or deceives for financial or personal gain.
  • Negligence: Negligence occurs when one party fails to use reasonable care that results in damage or harm to another person, business, or organization.
  • Breach of Warranty: Breach of Promise occurs when a person or business promises something to a customer in a warranty, and the business is unable to keep the promise made by the product or contract.
  • Misrepresentation: Misrepresentation occurs when a person or business makes a false claim to convince another person or party into a contract.

Cyber Liability Insurance

Cyber Liability Insurance covers the insureds liability for damages that result from a data breach. It does not cover immediate response costs that a business faces after a data breach. A Cyber Liability Insurance Policy is a type of insurance that protects businesses that sell and service technology. A data breach can result from something as small as an employees laptop being stolen while going to the bathroom at a coffee shop, but it can also result from an employee clicking on a phishing email. Data breaches are no longer just a problem for bug businesses. Both the Target and Home Depot Data Breaches started by hackers first accessing the computer systems of a small business who were partners with the bigger business. As most enterprise level business take cyber security more seriously, this is becoming a much more common way for businesses to become victims of a data breach.

8.1% Decrease for Nevada Workers Compensation Rates 2019

Nevada Workers Compensation Rates 2019 are Some of the Lowest in the Country

Effective March 1, Nevada Workers Compensation Rates in 2019 will be declining by 8.1%. According to the Oregon Premium Rate Ranking Study Nevada was the 46th most expensive state in the country to buy Workers’ Comp Insurance. The cost for coverage in Nevada is 71% of the national median. Each individual class code will see varying amounts of savings depending upon class code and experience modification rating. The range of changes in premium are between -29% and +15%. A sizable majority of classifications would receive decreases, often substantial decreases, as a result of this filing. A few still will see an increase in what they pay.

Las Vegas, Nevada

How is the Nevada Workers Compensation System Unique?

In the state of Nevada all businesses, must be covered by workers’ compensation insurance. Nevada operates under what is referred to as a no-fault system. A no fault system protects employees by providing medical and disability benefits along with some lost wages. The system also protects employers by limiting liability in the event of a workplace injury.

In the past Nevada was a monopolistic state. Being a monopolistic state means the employer must obtain workers compensation insurance from a compulsory state fund or qualify as a self-insurer. This means all businesses that operate within the state must purchase coverage from one provider. There is no open market for coverage. To be self insured, the business must meet certain financial criteria to qualify.

Currently, Nevada is an NCCI state. This means the state pool for high risk businesses that have been denied coverage on the open market is administered by the National Council on Compensation Insurance (NCCI). Typically states who partner with NCCI enjoy more favorable rates on workers comp coverage.

Sandstone, Nevada Desert

Why are Nevada Workers Compensation Rates Declining?

Nevada Workers Compensation Rates are declining significantly in 2019. This is because of a number of reasons. The payroll cap is one factor, most other states do not implement that somewhat contribute to lower rates on premium in Nevada. What a payroll cap means is that most states require the full payroll of all covered employees to be factored in the insurance premium. The rate is multiplied by each $100 in payroll. After this additional debits or credits are applied. Nevada only requires the first $36,000 of payroll for each covered employee, which reduces insurance premiums for businesses with employees who have higher salaries.

Also contributing to lower workers comp rates, is declining claims frequency. This is a trend that is happening throughout the country. Most people credit improvements in automation and workplace safety for the decline in claims frequency.

Tahoe Ski Resort, Reno, NevadaPurchasing Nevada Workers Compensation Insurance is very complex. It requires the help of a trusted advisor. More often then not the most trusted advisor is an independent insurance agent. In order to make sure your business is purchasing the right policy is to seek help from a Independent Insurance Agent.  An independent agent can help you get quotes from multiple insurance companies so you can be sure you get the most comprehensive coverage at rock bottom rates.

Alaska Workers Compensation Rates in 2019 are going down!

The Largest Decrease for Workers Comp Insurance Premium in 40 years for Alaska Business Owners

In 2019, Alaska Workers Compensation Insurance Rates are expected to fall the most they have in 40 years. The governor office announced this past October that workers’ compensation insurance premiums should decrease by an average of 17.5 percent statewide starting the first of January.  This decrease follows a 5.4 percent decrease in 2017 and workers’ compensation premiums are down roughly 25 percent since 2015. These reductions amount to an estimated $35 million in savings for the Alaska Business Community. According to Alaska Governor Bill Walker, “These proposed rate reductions are welcome news for Alaska businesses — lower workers’ compensation costs reduce the burden on the small businesses that strengthen our economy,” Walker said in a formal statement. “Thank you to the Alaska state Legislature and the Department of Labor and Workforce Development for their work on payment reform, contributing to significant rate reductions for 2019.”

Mount McKinley, Denali National Park, Alaska

What Caused Alaska Workers Compensation Insurance Rates to Decline?

There were a number of factors that contributed to the large decline in Alaska Workers Compensation Insurance Rates. Claim frequency and favorable medical costs continued to decline in 2018 which were two of the major factors contributing to declining rates. The claims frequency means that across the board there were less claims filed in 2018 compared to previous years. This is a favorable measurement for insurance carriers because this decreases the costs related to paying out insurance claims and processing those claims. Declining medical costs is largely because of streamlined processes throughout the medical facilities operating within the workers compensation system.

There was also legislation passed in 2018 that will contribute to lower rates in 2019 and for the foreseeable future. The legislation was House Bill 79 (HB79). the legislation clarified who is classified as an independent contractor and who needs to be covered by workers’ compensation insurance. This bill made it easier to obtain exemptions, to acquire reporting data, and to make payments.

Alaskan Cruise Ship

What can Business Owners do to Maximize Alaska Workers Compensation Insurance Rates?

There are many ways a business owner can save, in addition to the savings the Alaska Business Community is receiving from workers compensation premiums declining. Here are 5 things a business owner can act upon to maximize savings on Alaska Workers Compensation Insurance.

  • Make sure your Business is Classified Properly
  • Implement a Safety Program
  • Incorporate a Return-to-Work Program in the Safety Program
  • Consider Pay-as-You-Go Workers Compensation
  • Partner with an Independent Insurance Agent

Proper Classification Codes

In any given year, there are more than 700 different classification codes for businesses and employees to use when it comes to workers compensation insurance. Making sure your business is classified correct is a step that can save a lot of headaches during a mid term or end of term audit. Proper classification can prevent your business from over or under paying premium throughout the year. If you under pay throughout the year, it can cause your business to owe additional premium at the end of the term. Even if your business over pays through out the year and gets a credit on their policy, it means your business has had unnecessary cash flow tied up in workers comp premium payments. This is money that could be used on other necessary business needs.

Well-Documented Safety Program

A safety program can help a small business lower what they pay for commercial insurance by decreasing the frequency and severity of workers compensation insurance claims. The safety program does not have to be exhaustive. It can be as small as part of the new staff training program and a few 15 minute huddles each week. It is important to have these meetings documented. Your insurance agent can use this documentation to get you an additional discount when purchasing coverage. The documentation can also be used when a business experiences a year in which there are several claims or one large claim. Usually when this occurs your can expect your insurance premium to rise. If you have a documented safety program, your independent insurance agent can use it to show the claims are more of an outlier and not a sign of more claims to come.

A Return-to-Work Program

A return to work program is a great way to show your employees you care about them and help them get back to their daily routine quicker. When executed properly, a return to work program can help get your injured workers back on the job, even in a limited capacity, and back a part of their regular work routine. This is the best way to keep insurance claims under control and help keep your experience modification rating low.

Pay-as-You-Go Option

Some businesses may benefit from Pay as You Go Workers Compensation. Most traditional workers comp policies require 25 to 33 percent of the entire premium up front just to get coverage in place. With the Pay as You Go Option, most businesses can get coverage in place for as little as a few hundred dollars. This allows cash strapped businesses to get coverage in place, but use their needed cash flow for other more urgent business needs.

Partner with an Independent Agent

An independent agent is always the best way to find the most comprehensive insurance coverage at the lowest rate possible. Especially if the independent agent has several years of experience and relationships with multiple insurance carriers. They can use this knowledge and these relationships, to know which carriers are actively looking to quote your industry and and force carriers to compete for your business.