How Much Protection Does a Hold Harmless Clause Provide?

macro gavelA hold harmless clause is a legal statement in a contract that defines exactly what a party will do if a lawsuit arises from the contract. It is a positive, proactive statement, stating that one of the parties will indemnify and agree not to sue if a negative or unexpected event happens in the course of carrying out the business outlined in the contract. The one party agrees to hold the other party harmless.

Exceptions

While the hold harmless agreement is legally enforceable and will generally be upheld in a court of law, there are exceptions to the agreements and instances where the hold harmless agreement may be nullified by the courts. If one of the parties was negligent, the hold harmless agreement probably will not apply, as the agreement assumes that the party is acting in a normal manner without being negligent. Matters of public policy are usually exempt from hold harmless agreements.

Insurance Considerations

All of the hold harmless agreements and disclaimers may still not protect you from a lawsuit. Even if you are not liable for damages, someone can still sue you because they believe you are responsible. Liability insurance is critical for these situations. A general business policy should protect you if a lawsuit arises from business activities. Be certain to have enough coverage to protect all of your business assets, and consider an umbrella liability policy if you need further protection or your business activities place you at an unusually high risk.

For more information about a  NEC Insurance’s umbrella liability policy, contact Joe Bosse at jbosse@necins.com, 636.271.2481

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NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

Five Tips to Make your Employee Performance Review Less Stressful & More Productive

Performance Review Conducting an employee performance review can be stressful even when an employee is doing great. It’s always hard having a face-to-face with employees in a situation where confrontation may occur.

However if you’ve kept the lines of communication open throughout the year, nothing you say throughout the employee performance review should come as a surprise. If you only discuss growth opportunities on an annual basis, employees may not remember the specific instances you are referring to, and the learning opportunity is lost.  If you use the employee performance review process correctly, it can be a valuable tool that improves job performance, motivates your employees and facilitates an honest conversation about the employee’s future.

Here are Five Tips to Make Employee Performance Reviews Easier:

  • Do your homework. Hopefully, you have an employee handbook that outlines employee expectations and describes your company culture. Don’t count on your memory for specifics, refer to the handbook if it’s relevant. Make sure to tell your employee the areas in which they excel as well as areas where they need improvement. Create a Review Form for each job classification that has measurable standards so that employees are all being measured against the same benchmarks. TIP: Have each employee fill out a self-evaluation so you can see how they think they’re doing.
  • Be specific. Leave general feelings about performance and ability out of the review. Stick to the facts. Don’t say, “You seem like you don’t care”. Instead, say, “I’d like to see you take initiative and offer your own ideas about how to improve the process.” TIP: Throughout the employee performance review make sure you document all the specific tasks or behaviors that need improvement in the event termination is necessary at a later date.
  • Be honest about positives and negatives. You aren’t helping your company or your employee if you gloss over the negatives and only focus on the positives. Unless your employee is performing well below average, spend more time on their positive traits if possible. You want your employee to feel the employee performance review process was a positive experience. TIP: Go over the review with a spouse or friend before you deliver it. They can help you determine how balanced your review will be.
  • Encourage feedback. Don’t do all the talking. Emphasize that the review should be a conversation. (However, if you don’t want the person to talk until the end of the review, say so at the beginning.) Ask the employee if they need clarification on any points you made or actions you requested. TIP: If the employee is too shy to talk, ask specific questions about each of the employee performance review points to get the conversation started.
  • Focus on the future. Make sure the employee knows what you expect to happen by specific milestones, and ask them to share ideas on how to improve. TIP: Provide them with one or two obtainable goals and a deadline so you can easily monitor their progress.

For more information about employee performance reviews, ask about NEC Insurance’s BizAssure program or contact Joe Bosse at jbosse@necins.com, 636.271.2481

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NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

Rieva Lesonsky, GrowBiz Media

 

Do Foreign-Born Workers Pose Unique Safety Challenges?

Foreign Born WorkersProtecting all your employees from injury is a top priority for employers, however protecting a culturally diverse workforce creates a unique set of challenges. As an American employer, what are you legally required to do? What are the most effective and affordable methods of training a diverse workforce in safety practices?

The good news is that there are resources from employers across regions and industries to help.  Safety and medical professionals are spreading the word about the best way to adapt the safety culture within their professional communities. Occupational Safety and Health Administration (OSHA) has funded many projects to develop specialized safety training resources, drawing upon labor organizations and research centers. There are resources available, if you search for them,  which will help you maintain worker safety, provide medical care for multi-cultural workers, and provider service lists for translation and interpreting.

Safety First. Recovery Fast

As a group, these workers are at greater risk of work injury than U.S.-born workers, even if they are working the same jobs because of:

  • Limited experience
  • Language communication barriers
  • Less formal education
  • Cultural differences

When employers and employees don’t speak the same language, the need for customized safety training is obvious. However, even those foreign-born workers who seem fluent in English may also be at higher risk and require specialized training due to cultural differences such as:

  • The worker’s country of origin may not promote worker safety as a high priority. And those workers could be unaware that they can legally demand a safe workplace.
  • He or she may be unaware that U.S. employers and safety professionals are required by law to comply with many government safety requirements.
  • Even though foreign born workers can speak fluent English, they may have limited capacity to read English. This may result in their inability to participate in any written training programs.

Without the proper safety training and injury response methods to protect your entire workforce, you may be exposing yourself to an unfamiliar business risk.  To control these risks, develop the process you need to make sure all your employees, including those from different cultures , remain as injury-free as possible on the job, and are medically treated to return to work safely and quickly.

For more information about culturally diverse training programs, ask about NEC Insurance’s BizAssure program or contact Joe Bosse at jbosse@necins.com, 636.271.2481

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NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

Reproduced from Work Safe: An Employer’s Guide to Safety and Health in a Diversified Workforce.

How Much Money Can an Employee Wellness Program Save Your Company?

healthA true employee wellness program can improve employee morale which in turn impacts productivity and improves your spreadsheet. According to national research, 70-75% of health care costs to an employer are directly related to lifestyle-related illness, disease or conditions. The CDC says it’s as high as 90% of all medical claims. The financial impact of an employee’s poor nutrition, obesity, smoking, lack of exercise, and substance abuse is staggering.

A serious, well-executed and permanent wellness program can provide your company with:

  • 28% reduction in sick days
  • 26% reduction in health care benefit claims
  • 39% reduction in workers’ compensation claims
  • 30% reduction in disability claims
  • Plus the intangible benefits of improved morale

Employee wellness programs that are just talk or purely education typically don’t work. Programs that are management-supported, multi-faceted, and long-term will yield positive results. Here are the seven basic steps to a successful employee wellness program:

  • Get senior management buy-in and support. Everyone needs to be involved.
  • Create an internal wellness team from all levels of employees.
  • Survey the needs and interests of your employees and build a program around those.
  • Develop an operating plan for a focused wellness program.
  • Choose appropriate interventions suited to your environment.
  • Create and maintain an environment that supports your program.
  • Track your results and revise your program as needed.

It’s no surprise that it takes time and money to implement a strong employee wellness program. However, it’s been proven that your return-on-investment is greater than the cost. Studies show that your reduction in absenteeism equates $5.07 in savings per $1 spent and your reduction in medical costs comes to $3.93 per $1 spent.

Once you have a good employee wellness plan in place and operating, you can move toward the last step in cutting health care costs – and that is to connect employee wellness to insurance premiums. You can’t offer premium discounts based on employee health. But you can offer incentives, inducements or reductions in premiums that are tied to measurable, verifiable targets such as Body Mass Index, cessation of tobacco use, regular exercise, cardio health and cholesterol levels.

Remember, educational programs alone don’t work. You need action steps that can be implemented by all levels of employees to really get a strong ROI.

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NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

 

What Are My Options When Purchasing Worker’s Compensation Insurance?

Worker's Compensation Insurance

Purchasing worker’s compensation insurance can be costly and confusing. Many companies aren’t even sure if they need it.

As a general rule, companies with five or more employees must provide worker’s compensation insurance coverage. Contractors, however, need coverage if they have one employee or more. Missouri defines an employee as full-time, part-time, seasonal or temporary. Exposures outside of Missouri must be insured through a traditional workers’ compensation policy or an acceptable alternative.

Farm laborers, domestic servants, certain real estate agents and direct sellers and commercial motor-carrier owner-operators are exempt by The Missouri Worker’s Compensation Act. If you are a sole proprietor or partner, you aren’t personally covered unless you elect to be.  On the other hand, close family member-employees and members of limited liability companies are presumed to be covered unless they opt out.

Employers that don’t have the required number of employees, or who have employees in the exempt categories may nevertheless “elect” to come under the law. Exempt employers that decide not to purchase workers’ comp insurance, or self-insure, remain exposed to civil lawsuits brought by employees who are injured during work.

What are My Purchase Options?

You have two options when you purchase worker’s compensation insurance. You can buy workers’ comp insurance from a private insurer or, if you can meet the requirements of the Division of Workers’ Compensation, or you can self-insure as an individual business or a member of a self-insured group.

Traditional Insurance Carriers

Many employers purchase worker’s comp insurance from an insurance carrier just like they would buy other liability insurance. The remaining employers who are not self-insured may potentially be insured through the residual market, commonly known as the assigned risk pool or “pool.” Employers in the pool usually consist of those employers who have trouble finding coverage in the voluntary market and those with small premiums (under $10,000).

Self-Insurance

An alternative to purchasing a worker’s compensation insurance policy, employers and groups of employers may apply to the Division of Workers’ Compensation to self-insure their workers’ compensation obligations. Application can be made through the Division’s Insurance Unit. The Insurance Unit functions as the chief underwriter, regulator and auditor for the self-insurance program. There are two types of self-insurance, individual and group trusts. An employer wishing to self-insure must have the financial capability to meet financial obligations of work-related injuries. If not, it will directly impact the entire financial stability of the company. A potential advantage of self-insuring is reduced costs.

Before deciding to self-insure, here are some considerations:

  • You must be committed to controlling workers’ compensation costs. Self-insurance is a long-term method for funding an employer’s workers’ compensation liability. It may take you a few years to realize the benefits.
  • Examine the financial feasibility of self-insuring. For some, it may be more costly than a traditional workers’ compensation policy.
  • Does it fit into your corporate philosophy?  Are you willing to assume the risk?
  • Consider your exposure. Some exposures are extremely high risk and better handled through a traditional insurance policy.

Pros & Cons of  Self-Insuring Your Worker’s Compensation Insurance

Pros

  • An employer that successfully self-insures has active loss control program and services. These programs provide employees with safer work environments and help improve the employer’s profits through reduced losses.
  • You hire a third party claims administrator, which may help reduce overall costs of a case
  • There is potential cost savings associated with self-insurance. You keep the underwriting profit.
  • You may improve your cash flow and realize the time value of money since funds are paid out as bills and benefits payments, instead of lump sum premium payments.
  • You have great control over your workers’ compensation costs, and are in a better position to be proactive.

Cons

  • As a self-insurer, you may have to bear the cost of a catastrophic injury or higher-than-expected loss. This can directly affect your bottom line.
  • There is an application process and annual filing requirements contained in the regulations in which you need to comply.
  • Before self-insurance is granted, you must provide security in an amount determined by the Division of Labor, but not less than $200,000. This must be in the form of a surety bond, letter of credit, or the deposit of certain securities in escrow.
  • There may be loss of tax deductions. You can only deduct your actual expenses and paid losses. Reserves for future workers’ compensation payments must be listed on your balance sheet as a liability.

For more information about how you can obtain the most cost effective worker’s compensation insurance, contact Joe Bosse at NEC Insurance at jbosse@necins.com, 636.271.2481, or visit NECins.com for more information.

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NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

 

What Will Business Income Insurance Protect When Your Building is Damaged?

missouri-tornadoBusiness property insurance is designed to protect your physical dwellings in event of damage or natural disaster. But what it doesn’t protect is the business itself; and the income it produces. Unless you have business interruption
or business income insurance, your business could suffer while the physical damage to your building is being repaired.

Business income insurance insures the profits which would have been earned during the repair time of the physical damage. Typically, business income insurance is not sold as a stand-alone product, but can be added to a property insurance policy.  This extra policy provision applies to all types of businesses. It is designed to replace your revenue as if no loss had occurred.

What is typically covered with business income insurance?

  • Profits – Which would have been earned, based on prior months financial statements
  • Fixed Costs – Operating expenses and other costs still being incurred by the property, based on historical costs
  • Temporary Location – Expense of moving to, and operation from, a temporary location
  • Extra Expenses – Reimbursement for reasonable expenses, beyond fixed costs, that allow your business to maintain operation
  • Civil Authority/Ingress/Egress – Government mandated closure of a business premises which directly relates to lost revenue. Examples include: government issued curfews or street closures related to covered events.

Business income insurance coverage will cover the business interruption for the time determined by the insurance policy. Most policies define this as from the day the interruption occurred until the day you can resume business as usual.

In addition to this, businesses can also purchase contingent business interruption coverage which pays out when a vendor or supplier of the business experiences damages that prevent it from regular trade.

If you are a business operating in the state of Missouri, you understand the vulnerability you have due to natural disasters. We operate in an area that experiences floods, tornadoes, ice storms, and excessive heat. Any one of these can render your physical property uninhabitable. While rebuilding can takes months, can your business survive without incoming revenue?

For more information about our business income insurance programs, contact Joe Bosse at jbosse@necins.com or call 636.271.2481 and visit www.necins.com for a complete listing of our business and personal service offerings.

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NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

How To Decrease Risks By Hiring Safely

ASafetys insurance claims for accidents and injuries increase your financial risk, it’s important that you pay attention to any warning signs that can arise during the hiring process of a new employee. Hiring someone that is safety conscious is one way of decreasing your risk without adding expense. Incorporate these five things into your hiring process to help avoid workers’ compensations problems.

Incorporate Safety-related Questions into the Interview

While federal and state laws restrict certain questions during the interview process, here are the top three questions you can ask to measure an applicant’s attention to safety:

  • What types of injuries do you feel are the most common in the ___________ industry?
  • What recommendations can you make to prevent these industries?
  • Do you feel all workplace injuries are preventable?

Conduct a Thorough Background Check

You’ll need written consent from your applicant before you do this, but learning as much as you can about your applicant is essential to understanding their habits and patterns. In addition to calling past employers, etc. check out their Facebook pages and other social media sites to see if they participate in high-risk behavior.

Conduct Criminal Conviction Checks

Safety doesn’t always pertain to on-the-job injuries. It also includes violence in the workplace. Checking to see if your applicant has had any criminal convictions will tell you whether or not they are pose a risk to you and/or your employees.

Compare Official Motor Vehicle Reports to Answers on the Application

If you are hiring a driver, trust but verify the information they provided on their application. Depending on the situation, you may find information they previously withheld from you.

Make a Conditional Job Offer

Once you make a conditional job offer, you can ask applicants disability-related questions, conduct a fitness-for-duty medical examination, and require a drug test as long as everyone is subject to the same treatment. You can withdraw your job offer if the results show a risk that didn’t appear during the interview process.

Understanding employee law will allow you to work to the best of your ability to ensure that new employees understand your commitment to safety and decrease some of the risk associated with a new hire. For more information about employee law, join the NEC BizAssure program by contacting Joe Bosse at 636.271.2481 or jbosse@necins.com.

 


 

NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

15 Facts About Occupational Fraud and How it Impacts Your Business

Occupational and/or employee fraud happens to companies when and where they least expect it. Small companies tend to suffer more due to the fact that they have fewer controls in place, a perceived tighter knit employee group, occupational-fraudand less experience in dealing with it. Often employers wait until after employee fraud has been exposed to put some safeguards in place.
Education is the first step in prevention. Here are some at a glance facts about occupational fraud:
*all figures are reported as the medium unless otherwise stated

  • On an average, companies lose 5% of their annual revenue to fraud. Based on 2012 Gross World Product figures for the U.S., this translates to over 812 trillion dollars annually.
  • The typical financial loss to fraud is $140,000 with more than 20% being over $1 million.
  • A fraudulent event extents over 18 months
  • Asset misappropriation is the most common form of fraud, (87%), however is the least costly ($120,000)
  • Financial statement fraud is the least common form of fraud (8%), however is the most costly ($1 million)
  • Corruption schemes fell in the middle, comprising just over 33% of reported cases and causing a median loss of $250.000.
  • Occupational frauds are detected by tips (43%), followed by management review (15%), and internal audit (14%)
  • Small organizations are disproportionately victimized by occupational fraud
  • Nearly 50% of victim organizations do no recover their losses
  • Industries most commonly victimized include banking/financial services, manufacturing, and government/public administration
  • High-level perpetrators cause the greatest damage
  • 80% of frauds are committed by individuals working in these departments:
    • Accounting
    • Operations
    • Sales
    • Executive/Upper Management
    • Customer Service
    • Purchasing
  • More than 85% of perpetrators have never been previously charged or convicted of fraud related offense
  • There are typical behavioral warning signs to look for; living beyond their means (36%), and experiencing financial hardship (27%)
  • Anti-fraud controls appear to help reduce the costs and duration of occupational fraud schemes.

To learn what resources are available to help you manage this and other small business risks, learn about NEC Insurance’s BizAssure Program or contact Joe Bosse today at jbosse@necins.com, 636.271.2484. NEC understands protecting your business is more than just purchasing insurance.


 

NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

Can Your Company Survive a Sexual Harassment Lawsuit?

Sexual-Harassment-Orange-County

That would never happen in your organization, right? Tell that to the companies that paid out $52.3 million in 2011 according to the EEOC.

As an employer, your risk is magnified due to the fact that you are financially responsible for the behavior of all of your employees, plus the individuals employees interact with such as clients or vendors. Depending on the size of your company, this could be a heavy burden.

Though simple teasing, and off handed comments are not grounds for a lawsuit, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision such as termination, resignation, or demotion.

To ensure you understand what sexual harassment includes here are some simple facts:

  • Sexual harassment claims are not only filed by women, over 15% of claims filed are by men.
  • Lawsuits do not have to include opposite sexes, same sex suits can and are filed regularly.
  • Harassment doesn’t have to be sexual in nature; it is illegal to harass a person woman by making offensive comments about their gender in general.

Regardless of the size of your company, prevention is still the best risk management tool. A zero tolerance policy and effective grievance process communicated from top management down can make a strong impact on the bottom line.

To learn what resources are available to help you manage this and other small business risks, learn about NEC’s BizAssure program or contact Joe Bosse today at jbosse@necins.com, 636.271.2484. NEC understands protecting your business is more than just purchasing insurance.


 

NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.

What Question Should You Ask Before Renewing Your Business Insurance Policy?

question_handBefore You Renew Your Business Insurance, What Question Should You Ask?

“What are you going to do for me?”

As you begin the process of receiving business insurance quotes, you may notice that they pretty much fall within the same price range. There isn’t really much difference between different agencies, and by default – you may just stay with your current insurance broker.

Why is there so little to choose from? Because the brokers competing for your business are typically going to the same few insurance carriers that service companies in your industry. They don’t understand that your protecting your business is more than just purchasing insurance.

At NEC, we do. That’s why, in addition to a competitive price quote, you can have access to unique risk prevention business services from top-rated experts in their field. Services such as:

  • Free Unlimited Employment and Labor Law Consultations
  • Free Unlimited Construction and product Liability Law Consultations
  • Free Unlimited Workers Compensation Cost Reduction Consultations
  • Free Unlimited Billing and Collection Consultations

We take the holistic approach to protecting your business. That’s why we provide these, along with many other value-added services along with our very competitive insurance price quotes and great client service.


NEC Insurance is one of the largest independent insurance brokers in Missouri offering business and personal insurance, financial services, and risk prevention. For more information visit www.necins.com or call 636.271.2481.