WORKERS COMPENSATION AND EMPLOYERS LIABILITY

Transcription

1 WORKERS COMPENSATION AND EMPLOYERS LIABILITY Providing a safe workplace is essential to the success of any business. When accidents do happen, Workers Compensation Insurance provides your firm with the coverage to provide your employee with the medical costs for proper treatmet of injury as well as up to two-thirds of their weekly salary. In addition to the statutory Workers Compensation coverage, this policy provides coverage for Employers Liability and Stop Gap coverage in monopolistic states. Federal coverages, such as USL&H and Jones Act can be provided on an if any basis, when requested. Policies should be amended to provide coverage on an all states basis to provide coverage for employees that are traveling or are temporarily working out of state. Safety and Loss Control Programs should be developed and maintained since all losses on your Workers Compensation policy will affect your Experience Modification which can financially penalize or reward you as this is a multiplier that gets applied to your premium charges. Policy Forms: Provided on state specific statutory form. Policy Term: Annual. Limits of Liability: Workers Compensation Limits are statutory. Employers Liability Limits are available up to $2M per occurrence/$2m general aggregate/ $2M products completed operations aggregate. Retentions: Wide selection of program structures to meet the client s needs including: guaranteed cost, dividend programs, small, intermediate and large deductible options and retrospectively rated programs. Compliance with state compulsory requirements Global Capacity Endorsement to cover employees working abroad Coverage available for Collectively Bargained programs Excess Compensation coverage for qualified self-insureds

2 GENERAL LIABILITY General Liability coverage ensures the protection of your company s assets against property and/or bodily injury damage. In addition to this coverage, General Liability also includes Personal and Advertising Liability as well as Medical Payments. A General Liability policy is structured as a pay on behalf and usually provides defense costs in addition to the limits of liability. Coverages can be written in a variety of ways including current operations or project-specific. Policy Forms: Generally, an ISO form is issued. Policy Term: Annual policy for on-going operations. Up to 5 years for project specific coverage. Limits of Liability: Customary practice limits are: $1M per occurrence/$2m general aggregate/$2m products completed operations aggregate; however limits as high as $10M per occurrence/$10m general aggregate/$10m products completed operations aggregate are available. Retentions: Wide selection of program structures to meet the client s needs including: guaranteed cost, dividend programs, small, intermediate and large deductible options and retrospectively rated programs. Excess of Wrap Up coverage may be available Can be endorsed to include hired and non-owned auto coverage for risks without owned auto exposures Completed operations coverage

3 EXCESS LIABILITY Excess Liability Insurance provides additional limits over and above the liability limits provided by an Automobile, General Liability and Employers Liability policy. This line can also be extended to include excess coverage over Aviation, Watercraft and other specialty liability policies. Excess Liability can be broadened to serve as an Umbrella policy, providing excess coverage over scheduled policy and primary coverage for liability not otherwise insured. Excess Liability is structured as a pay on behalf and usually provides defense costs in addition to the limits of liability. Coverages can be written in a variety of ways including current operations or a specific project. Policy Forms: Carrier specific forms are utilized. Policy Term: Annual policy for on-going operations. Up to 5 years for project specific coverage. Limits of Liability: Limits of up to $600M are readily available. Retentions: None for excess coverage, minimal Self Insured Retention of $10,000 for Umbrella drop down. Broad follow form coverage to provide consistency between primary and excess layers Defense is provided in addition to the limits of liability Completed operations coverage Policy follows form over primary coverage

4 DIRECTOR S AND OFFICER S LIABILITY / EMPLOYMENT PRACTICES LIABILITY Director s and Officer s (D&O) Liability and Employment Practices Liability Insurance (EPLI) coverage has seen considerable growth as both Public and Private Corporations are increasingly concerned with the activities, practices, and operations of their companies. D&O covers wrongful acts committed by company management. Employment Practices Liability policy provides coverage for most employment related lawsuits such as wrongful termination, failure to promote, discrimination, or sexual harassment. In addition to claims brought by and against any employee in the company, in most cases, the EPLI can be endorsed to provide coverage for third-parties, such as customers, clients, or vendors alleging discrimination and/or sexual harassment. Policy Term: Annual. Limits of Liability: Coverage limits can be as low as $1M* per Claim/$1M Aggregate. Companies requiring higher limits can build towers up to $100M per claim or higher, if needed. * Defense costs are included within the limits of liability. Retentions: Vary for most companies based on the exposure and the cost. Often, EPLI and/ or Third-Party retentions are higher than the D&O retentions. Premiums: Typical premiums begin around $5,000 for the $1M per loss/$1m aggregate limit of liability. Covers claims that may not be covered under a standard General Liability policy Provides coverage for sexual harassment in the workplace as well as sexual harassment and discrimination against third-party vendors Protects a corporation and its directors/officers again claims alleging malfeasance Private corporations can be protected from suits by competitors or customers for wrongful acts in the course of business Separate liability towers are available Coverage for punitive damages (where allowable by law) can be provided Additional coverage can be added including: crime, fiduciary liability, or kidnap and ransom

5 controlled insurance programs (wrap ups) Controlled Insurance Programs (CIPs), commonly referred to as Wrap-ups, are a tailored solution designed to address all of the statutory and tort liability risks of a project through a single comprehensive insurance program. The use of a CIP ensures that all parties on a project have uniform coverage with a single carrier. Cross-claims and contentious litigation amongst parties at the job site are eliminated in favor of this cost effective solution. Coverage applies to the Owner, Contractor and subcontractors of all tiers working on a designated project. Vendors and those parties only making deliveries to the project are typically excluded. Coverage can be written on a single project basis for projects with construction value in excess of $70M or on a rolling basis. Coverages included in a CIP are: Workers Compensation (WC), Employers Liability, General Liability (GL) and Excess Liability Coverage. Policy Forms: Generally, ISO forms provided with extended completed operations of up to 10 years after project completion. Policy Term: Policy term is equal to the term of construction up to a maximum of 5 years. Extended Completed Operations is provided for up to 10 years after completion. Limits of Liability: Primary CIP limits are traditionally $2M per occurrence/$2m general aggregate/$2m products-completed operations aggregate with excess limits of up to $600M readily available. Different primary CIP limits may be provided required by contract or excess carrier standards. Retentions: Typically, retention levels start at $250,000 per occurrence for both GL and WC coverage clash deductible options available. Other options are available including guaranteed cost. Premiums: Project specific. Individually crafted to meet client needs Integration of complimentary coverages including: Builders Risk Owner and Contractors Protective (OCP) Railroad Protective Liability (RRP) Contractors Pollution Liability (CPL) Workers Compensation coverage complies with statutory requirements Structured as pay on behalf of policies Defense is provided in addition to limits of liability

6 builder s risk Builder s Risk is property policy that was created to address physical damage to a project during the course of construction. Coverage includes work in place as well as materials and machinery on site that will become a permanent part of the structure. Builder s Risk coverage can be provided on both a project specific and rolling basis. Policy Forms: Coverage is provided on an all-risk property form including coverage for windstorm, flood, earthquake and terrorism. Coverage extensions within the form include materials at an off-site storage facility, materials in transit, debris removal, pollutant cleanup and damage to existing property. Builder s Risk policies can be endorsed to include labor and reasonable profit in the valuation of a loss. Additional endorsements can be added to provide coverage for declared soft costs. Policy Term: Life of project for project specific policies. Annual rates are offered for rolling programs covering all projects enrolled in the annual term until project completion. Limits of Liability: $600M per project for all other perils, $600M in terrorism (TRIA), $400M flood, $100M California earthquake and Coastal windstorm. Lower limits may apply for specific projects such as residential frame. Retentions: Project specific. Premiums: Varies by type of construction. Single policy insuring the entire project from loss Coverage for uncontrollable exposures such as Coastal Windstorm, Flood, and Earthquake First party policy coverage providing expedient payment to keep project progressing on-time Insured status for Owner, Lender, Mortgage Holder, Contractor, and all Subcontractors on job

7 contractor s property Contractor s Property insurance provides coverage for the physical assets of your business including the owned property at a jobsite, all contractors equipment, tools and materials awaiting installation, the contents in, or around the office/warehouse/shop as well as the actual building, if necessary. Additionally, this policy can provide time element coverage for loss of income, loss of rents, and, in the event of a loss, can also pay for the extra expense to put your operations back in business. Other Property Policies Contractor s Equipment: Physical damage to owned or rented equipment Installation Floaters: Property at jobsite or other location waiting to be installed Builders Risk: Property in the course of construction. (Master policies available) Ocean Marine: Imported or exported goods Catastrophic Perils: Acts of nature including floods, windstorms, or earthquakes Electronic Data: Computer hardware, printers, phone systems, and proprietary software Limits of Liability: The limits of liability are tied directly to the replacement cost of the building(s) and property that needs to be insured. Limits should be set based on the cost to rebuild the sticks and bricks of the building or replace the equipment with like kind and quality. In the case of multiple buildings, a blanket limit may be applied to provide one limit for all buildings in the portfolio. Deductibles: Deductibles vary and can be as low as $500 and as high as $100,000 or more. Catastrophic Perils deductibles can be represented in a percentage of the Total Insurable Value (TIV) i.e. 5% of TIV. Business Income deductibles are often times represented in number of days or hours - i.e. 48 hour deductible or 5 days. Protects the physical assets of your company Can provide owner with a payment for loss of income Leased and rented equipment coverage can reduce the cost to lease or rent equipment Provides coverage for property in the course of construction and will protect the profits of the company in the event that there is a covered loss during the construction phase Fulfills property and equipment financing obligation

8 business automobile liability The exposures that your business faces on the road require a separate insurance policy. Business Automobile Liability coverage is designed to address the third-party liability losses arising from the ownership, operation, maintenance or use of an automobile. Whether a true trucking risk or incidental auto exposures, anyone driving a vehicle is required by law to provide automobile insurance. The Physical Damage section provides coverage for the property damage to the vehicles that you own, lease or in some instances borrow or rent (Hired Car Physical Damage). This coverage typically has two parts; one that provides comprehensive coverage and one that provides coverage for collision. Other coverages can be added such as towing and labor and rental reimbursement coverage. Often times there are enhancements that can be added to broaden the coverage. These enhancements include: Automatic Waiver of Subrogation, where required by contract Automatic Additional Insured Status, where required by contract Removal of the Fellow Employee Exclusion- Drive Other Car Coverage- Extends the Business Automobile Insurance to follow the individual Lease Gap Coverage- provides coverage for the difference between the cost to repair or replace the vehicle and the remaining cost of the lease requirement. Includes Employees as Insureds Policy Forms: Provided on state specific ISO form. Policy Term: Annual. Limits of Liability: Standard limits are $1M Combined Single Limit (CSL); higher limits to meet Department of Transportation requirements are available up to $5M CSL. Automobile Physical Damage valued on an Actual Cash Value basis, (replacement cost, less depreciation). Retentions: Wide selection of program structures to meet the client s needs including: guaranteed cost, dividend programs, small, intermediate and large deductible options and retrospectively rated programs. Compliant with state requirements MC-90 and other DOT filings available Large fleets can be rated on a composite rate basis, simplifying record keeping Pollution (upset and overturn) coverage can be added Garage Forms available for operations that are repairing vehicle for others

9 claims services Turner Surety and Insurance Brokerage, Inc. provides companies with advice and assistance in managing their claim risks. By effectively managing claim costs, companies may be better positioned to reduce their exposure, increase profits, and become more competitive. Our Claim Services can help companies to reduce their claim costs and increase value regardless of whether the companies are self-insured or insured through a traditional insurance program. TSIB s Claim Services has a wealth of experience evaluating and managing all manner of property-casualty claim exposures, including Workers Compensation, General Liability, Auto Liability, Professional Liability, Excess/Umbrella Liability, Pollution Liability, and Builder s Risk, for the construction industry and other industries. This experience comes from working with organizations with claim issues related to ongoing and discontinued (re)insurance programs, third-party claims administration, captive facilities, mergers and acquisitions, regulatory compliance, and other situations where the goal has been to reduce exposure to risk and increase value. TSIB s Claims Services regularly works with actuaries, accountants, and other professionals involved in evaluating a company s claim liabilities, insurance receivables, and claim processes and controls for financial reporting, transaction due diligence, dispute resolution, and other purposes. We help the company s advisors to understand its claim exposures, assess potential insurance recoveries, and identify claim process control issues. Claims Services include: Policy contract review and analysis Insurance cost recovery evaluation Dispute resolution support Expert witness testimony Claim program design and implementation Third Party Administrator selection and assessment Claim process reviews Claim strategy and case reserve reviews Claims cost control strategy Insurer and re-insurer audits Transactional due diligence

10 contractor s pollution liability Contractor s Pollution Liability (CPL) provides coverage for environmental claims such as mold, hazardous materials remediation, and other pollutants that arise out of any type of contracting operation. From environmental firms to general contractors, CPL provides an insurance mechanism which responds to bodily injury, property damage, clean up costs, and defense costs resulting from a pollution or environmental event. Policy Forms: CPL can be offered on an occurrence or claims-made basis. Policy Term: Up to 15 years Project policies insuring specific projects including completed operations coverage. Annual policies are also available. Limits of Liability: Up to $50M per loss/$50m aggregate. Total market capacity of any risk $250M. Retentions: $5,000 minimum. Premiums: Minimum premiums start at $1,500 for the $1M per loss/$1m aggregate limit of liability for a lower risk class. Defense against potential frivolous lawsuit costs Mold liability coverage can be included Premises pollution coverage for owned, leased, rented properties available. Coverage for punitive damages (where allowable by law) can be provided

11 contractor s professional and pollution liability The Contractor s Professional and Pollution Liability (CPPL) policy was created to offer a cost-effective solution to firms that require insurance coverage for both professional and environmental liability exposures. This line is offered to both environmental and non-environmental firms like construction managers, design-builders and general contractors. Policy Forms: CPPL can be offered on an occurrence or claims-made basis. Some CPPL products also offer a first party protective coverage indemnity for damages in excess of an underlying design professional s professional liability policy. The CPPL can be written on a project specific basis or practice/blanket basis. Policy Term: Up to 5 years including completed operations coverage for project specific policies. Annual policies are also available. Limits of Liability: $50M per loss/$50m aggregate with any one particular carrier. $150M per loss/$150m aggregate limit of liability if structured with multiple carriers. Retentions: $10,000 minimum. Premiums: Typical premiums begin around $5,000 for the $1M per loss/$1m aggregate limit of liability. Professional and pollution in one policy Mold liability coverage can be included Premises pollution coverage for owned, leased, rented properties are available. Coverage for punitive damages (where allowable by law) can be provided

12 Surety services To most contractors, maintaining a solid surety program is vital to their operations. Given the current state of the market, it is important for the Contractor, the Contractor s Representative (Broker) and the Surety underwriter form a solid relationship so that all parties are able to positively react to the changes in the business environment. TSIB s Surety Division works collaboratively with owners in order to best determine their bonding needs. From general contractors to subcontractors, we review a company s size, industry, financial picture and credit risk in order to help match their objectives with a network of professional, experienced sureties. Our professional staff provides direct access to the top surety underwriters in the industry, providing contract review and maintaining on-going support for all your bonding needs. In addition to traditional surety work, we also have vast experience handling co-surety and joint venture projects. There are many types of bonds, including Bid Bonds Performance Bonds Labor and Material Payment Bonds Subcontract Performance Bonds Subdivision Bonds Maintenance Bonds Supply Bonds Contractor License and Permit Bonds Advance Payment Bonds Retention Payment Bonds Maintenance Bonds Appeal Bonds Lein Bonds Policy Term: Bond Terms are project Specific Limits of Liability: Surety bonds are written on a project specific basis. However, they are subject to the bonding capacity of the principal (contractor, performing the work). Premium: Premiums vary depending on type of bond, bonding capacity of the principal and are expressed as a percentage of construction value. Pricing example for the most common contract bonds: Bid bonds Performance Bonds Payment Bonds No cost Can be priced at ½% to 2% of contract price Typically included in the cost of the Performance Bonds

13 owner s protective professional indemnity The Owner s Protective Professional Indemnity (OPPI) policy was developed to provide owners of construction projects an alternative to project specific professional liability policies. The OPPI extends coverage to the owner only, for damages arising out of professional liability created by the design team on the project. Policy Forms: The OPPI provides the owner with coverage for damages that exceed the primary professional liability policy of the design professional arising out of professional services performed by the design professionals. The OPPI also offers an owner difference in coverage above the design professional s professional liability insurance, and offers defense for third party claims. The OPPI can be written on a project specific basis or blanket (all construction projects of the owner) basis. Policy Term: Annual - Blanket Policy (meaning all projects under construction for the owner/named insured). Up to 5 years with a 5 year extended reporting period for project specific policies. Limits of Liability: $125M per loss/$125m aggregate limit of liability if structured with multiple carriers from the professional liability insurance marketplace. $50M per loss/$50m aggregate with any one particular carrier. Minimum Insurance requirements for Design Professionals: As a requirement of coverage, typical OPPI policies request that the underlying design professional carry a professional liability policy with at least $1M per loss/$1m aggregate limits of liability. Higher limit requirements may be applied for different types of projects and for cost savings. Retentions: $100,000 minimum and are self-insured retentions. The SIR only applies in the event the underlying design professional s professional liability is impaired or exhausted. In the event the underlying design professional s policy is impaired then the SIR under the OPPI applies only to that portion that is not available. Premiums: Typical premiums begin around $75,000 for the $1M per loss/$1m aggregate limit of liability. Cost-effective alternative to project insurance Offers difference in coverage above the underlying professional liability including pollution, mold, construction management, and contractual liability. Defense cost for third party claims arising out of the design professional s services Coverage can be provided for liability of the owner s professional services

14 pollution legal liability Pollution Legal Liability (PLL) is an environmental insurance policy that helps cover the environmental risks associated with owning, developing or operating a facility or site. PLL is also a risk-management tool, with coverage that can help protect buyers and sellers from environmental liabilities in business transactions, for instance, selling a building built on a brownfield (polluted site). PLL provides environmental coverage for losses due to on- or off-site pollution conditions, coverage for pollution conditions resulting from transportation and coverage for owned or non-owned disposal site-related environmental liabilities. Policy Forms: The PLL provides coverage for third party bodily injury, property damage, first and third party clean up costs and defense costs which arise from operations performed by or on behalf of the contractor or owner/developer. Furthermore, the PLL can provide coverage to lenders and other third parties that have an insurable risk in the property. The PLL is offered with a claims made trigger with extensions for mold liability, business interruption, transportation and non-owned disposal sites. Policy Term: Up to 10 years Project policies insuring specific projects including completed operations coverage. Annual policies for single properties of large property schedules are available. Limits of Liability: Up to $100M per loss/$100m aggregate with any one particular carrier. Up to $250M per loss/$250m aggregate with all carriers layered Retentions: $10,000 minimum Premiums: Start at $5,000 for a $1M per occurrence/$1m aggregate Provides coverage for past, current, and future environmental issues Provides assurance for unknown environmental liabilities in asset transactions Commonly accepted in lieu of environmental indemnities or can be structured to wrap around indemnities Insures against business interruption losses resulting from pollution conditions Enhances financing prospects by allowing creditor protections When broadly structured, can fill the gap in General Liability policies

15 SUBCONTRACTOR INSURANCE PROGRAMS As the broker for Turner Construction Company s Insurance Programs, Turner Surety and Insurance Brokerage, Inc (TSIB) is responsible for the placement and service of the needs of an $9.6B construction company. As a full service insurance brokerage agency, we are able to leverage our extensive insurance background with true construction industry experience to benefi t your company and provide you with insurance solutions and risk management guidance that is grounded by solid construction industry experience. Our programs are designed to work with even the most restrictive General Conditions Sections of Construction contracts that you face in your business. Through our relationships and Insurance Company contacts, we have put together a comprehensive insurance program that is designed to assist you with your business and include: Broadening of Coverage with Expanded Terms and Conditions Market Sensitive Rating Structure that will decrease your premiums Modular Design Provides Trade Specifi c Coverage Designed to be in Compliance With Most General Conditions Sections, Environmental Programs, Professional Insurance, Directors & Offi cers/employment Practices Liability Relieve Some of the Administrative Burden for Future Turner CCIP s or OCIP s Access to Turner Construction Company s Risk Management Resources for All of Turner Surety and Insurance Brokerage s Clients Resource for All Insurance Related and Risk Management Issues, Contract Reviews, Policy Reviews, Claims Reviews

16 CRIME AND FIDELITY Every employer needs to be concerned with loss sustained by acts of employee s and also through acts of outsiders. Common targets are cash, securities and inventory. In this electronic age, an individual on another continent can be responsible for relieving you of your assets. With limited exception, crime-related losses are typically not covered by most property insurance policies. Crime insurance is a necessary component any business toolbox. It is a cost effective mechanism to transfer risk. Policy Forms: Crime Insurance consists of many different coverage parts within a single policy jacket such as Employee Dishonesty, Forgery & Alteration, Money & Securities, and Electronic Theft. Employee Dishonesty (Fidelity) Insurance: covers embezzlement of your funds or theft of your property by your own employees/ Forgery & Alteration: covers when an outsider steals your checks and forges your signature or when the amount on your check is raised to a higher amount. Money & Securities: Covers theft of your money and securities by an outsider. Electronic Theft: covers when an outsider steals from your account by means of electronic contrivance. Typically, a hacker gains access to your computer and transfers funds out of your account or intercepts an incoming wire transfer. Policy Term: Usually written on an annual basis but 3 year terms can be available. Limits of Liability: Up to $250MM+ per loss however, most carriers managing limits by offering no more than $25mm to any one account, some substantially less. Retentions: No industry wide minimum generally negotiable. Premiums: Also no industry wide minimum with premiums varying based on risk class and experience. They can start at $1,500 for the $1MM per loss; ERISA at a few hundred dollars. The average organization will lose 6% of its total annual revenues to fraud and abuse committed by its employees and outsiders. Private businesses are the most vulnerable. The average loss for private companies is $210,000 There is no 100% surefi re way to safeguard your assets; no amount of resources will stop a determined, opportunistic thief. You spend your days thinking about managing and growing your business while others spend that time thinking about ways to take what they can get. Can fulfill ERISA requirement for pension and welfare accounts

17 LOSS CONTROL SERVICES Our commitment to Safety and Loss Control Services can be traced back to the association to a world class construction company. BUILDING L.I.F.E. (Living Injury Free Everyday) is a program that Turner Construction has implemented to elevate the idea that safety and loss prevention should be the responsibility of everyone at the company or at the jobsite. As brokers for Turner Construction, TSIB s professionals have also adopted this aggressive platform for Risk Management that now sets the tone for the programs that are developed for all of our clients. As a result of this methodology, we have seen the Recordable Incident Rate reduce by 31% and Lost Workday Incident Rate 57% on the Turner CCIP when compared against the Industry Average. The commitment to Safety and Loss Control must be understood by all levels of workers at the jobsite and having a clear and visible presence is a top priority. Some of the specific procedures that the program can include: Creation of a Safety Committee that includes professional and management level employees to create a visible commitment to safety from the Top down. Full Implementation of ZERO TOLERANCE 6 Foot Fall Protection. Substance Abuse Program, where acceptable by the laws of Florida and Orlando, should be implemented and enforced by all contractors working on the jobsite. This program should include pre-employment, random, reasonable suspicion and post accident testing. Disciplinary Program in place for non-compliance to safety program, including monetary fi nes for safety violations. The sole purpose of an effective loss control program is of course to save lives, and property. However, the payoff in the end, is that insurance rates are always positively affected and that will result in lowering your premiums.