In today’s litigious environment, successful clients are growing increasingly concerned about becoming the target of a costly lawsuit, yet many remain ill-prepared for such an occurrence. Typically, insurance policies (e.g. homeowners, automobile, and watercraft) include initial limits of “primary” liability that respond to legal judgments. However, these are commonly limited to $300,000 or $500,000, making them inadequate in today’s litigious society where multi-million-dollar judgments are all too common. An Excess Liability or “Umbrella” policy kicks in when a lawsuit judgment exceeds the limit on homeowners and auto policies. We recommend clients consider the maximum net worth they are willing to risk should such a lawsuit occur. We can place up to $100,000,000 in personal umbrella, and our recommendation is to maintain Excess/Umbrella Liability protection at a minimum limit of $5,000,000.
Below are just a few examples of why coverage limits matter.
Type of Loss: Liability
Description: Worker handling renovations at insured’s home fell 12 feet from a ladder, suffering serious head and brain injuries.
Verdict/Settlement: $11,000,000 *Plaintiff alleged dangerous work conditions as contributing factor to fall.
Type of Loss: Liability
Description: A neighbor was leaving a neighbor’s yard and tripped and fell over tree roots protruding through the ground. The fall caused a fractured hip, necessitating surgery and the use of a walker for the rest of his life.
Verdict/Settlement: $2,100,000
Type of Loss: Liability
Description: Child injured in swimming pool accident; resulted in permanent paraplegia.
Verdict/Settlement: $13,000,000
Type of Loss: Auto
Description: While test driving a new car, driver lost control and crashed, killing the salesman who was the passenger in the vehicle.
Verdict/Settlement: $13,700,000 *Wrongful death lawsuit by salesman’s family.
Type of Loss: Watercraft
Description: Insured’s boat collided with another boat, killing a passenger in the other boat. The passenger was a co-owner of a successful business and high-income earner.
Verdict/Settlement: $6,500,000 *Insured’s $5,500,000 limit was inadequate and held personally responsible for $1,000,000.
There are two key components that should be included in a comprehensive Excess/Umbrella policy:
- Uninsured/Underinsured Motorist – This important protection is provided under most primary Automobile policies. It ensures that a household member will be covered for injuries he/she receives from a negligent driver. In the event of a qualifying accident, the insurance company will pay the difference between what the uninsured/underinsured driver can pay and what the injured driver would be entitled to as if the uninsured motorist had proper insurance in effect (coverage also applies in “hit-and-run” accidents). We encourage every client to purchase additional limits of protection, which are available as an endorsement to the Excess/Umbrella policy. This additional protection covers the bodily injury damages they cause you or a family member.
- Ensuring a Proper Defense – Most clients are unaware of how their defense would be managed by their insurance company in the event of a lawsuit brought against them or a family member. Three specific items to request include:
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- Outside the Limits – All covered defense costs are “outside” the limit of Excess/Umbrella coverage, thus preserving the full Excess/Umbrella coverage limit for judgments against you.
- Expanded Defense – A sub-limit of coverage will apply to the reasonable expenses for your preferred law firm to review and consult on the defense offered by the policy.
- Reputational Damage – Some policies will also provide a sub-limit to cover the fees of a public relations firm to protect your reputation within your community.
Remember, coverage needs evolve over time. It is critical to inform a trusted insurance advisor of any related exposures that you or your clients may have.
Andrea Pelletier, CPRIA, CPIA is Client Advisor and Partner at Gulfshore Insurance specializing in Private Risk Services. Andrea works with successful individuals and their families on creating and customizing package insurance solutions in the areas of luxury homes, car collections, jewelry, fine arts, watercraft, and personal excess liability. Comments and questions are welcome at apelletier@gulfshoreinsurance.com
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
For most employers, the cost of an employee’s work-related injury is covered by workers’ compensation insurance, which pays for medical care and replaces some of the income that the injured employee lost while unable to work. There is no coverage, however, for the hidden costs to your organization of that injury, such as reduced efficiency, the cost of training replacements, and increased overtime expenditures.
On-the-job injuries or vehicle accidents aren’t limited to occupations that are obviously dangerous. In most years the top three causes of injuries in the workplace are overexertion (injuries caused from excessive lifting, pushing, pulling, holding, carrying, or throwing of an object), falls on level ground, and bodily reaction (injuries from bending, climbing, slipping or tripping without falling). Such injuries can affect workers in most environments. Whatever your industry, attention to such risks can pay dividends.
Employees should be trained to recognize hazards and to report them to the appropriate person so that the hazard can be corrected as soon as possible. Work requirements involving safety should take precedence over any other.
Any near miss, first aid incident, accident, or other workplace injury-related event should be investigated. Where possible, the investigation should be carried out immediately by a team that includes both management and hourly employees, all of whom have been trained in incident investigation. The goal of investigations is to identify the cause of the accident or injury rather than assign blame and to correct any hazards or other problems found, such as poor communication.
Supervisors and managers should also be trained to recognize and correct unsafe behaviors that can lead to injuries, including rushing, frustration, complacency, and fatigue.
Once a year a team should review all incidents from the prior year to see whether there are any patterns in the accidents and, if so, how to address the problems identified.
Each worksite should confer with its fire and police departments and hospital about plans for all potential emergencies, including fire, explosion, accident, severe weather, loss of power, and violence. Emergency drills should be used to ensure that employees know what to do and to assess the effectiveness of emergency plans.
For additional information, visit the Federal Occupational Safety and Health Administration website.
Tim Spear, is a Client Advisor and Partner at Gulfshore Insurance specializing in the construction, oil/petroleum, and landscape industries. Through his consultative and diagnostic approach, he helps clients develop customized programs to meet their risk management needs. Comments and questions are welcome at tspear@gulfshoreinsurance.com
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
A wave of increased litigation will likely emerge as workers who have been laid off see their savings run low and start to look for alternative sources of income. The key to addressing this phase will be how organizations conduct layoffs. Companies that initiate layoffs with little forethought and guidance may see a rise in workers compensation claims and experience numerous other unintended consequences. Companies that develop thoughtful reduction-in-force strategies are likely to see fewer workers compensation claims and lower overall expenses.
To avoid this, consider making settlements on open cases despite the lack of hearings or IMEs. Parties may need cash. Negotiations may resolve informally. Some carriers have seen claims moving to settlement early, sometimes at or below reserve estimates. Therefore, the current economic climate may be creating a prime opportunity to resolve stubborn cases.
Additional Disruptions:
The rise of COVID-19 and the ensuing economic recession are crashing at once and creating profound shifts in the workers’ compensation system. Together these waves will drive changes to the workers compensation system for years to come, reshuffle the insurance industry, and could potentially alter health care in the US.
A decrease in traditional workers’ compensation claims, due to fewer workers and fewer work hours will be at least somewhat offset by an increase in new types of claims, including:
- COVID-19 claims.
- Post-termination claims. As waves of workers get furloughed, we can expect a wave of new claims, especially from deeply affected industries such as hospitality and retail. This is driven, in part, by situations where an employee has an injury and may not have filed a claim in a healthy economy but decides to do so in a downturn after seeing his or her bank account run low.
- Work-at-home claims. These may be related to mental stress, sleep deprivation and other conditions related to extended social distancing. Claims for repetitive strain injuries may also increase.
The “onslaught of pent up demand” for medical treatment among injured workers whose care has been delayed will put stress on the system. Some organizations are expanding care networks and establishing new channels of care. A rise in fraud can be expected in the next few months among attorneys and providers known to engage in workers’ compensation fraud. We should see more claims that are challenging to define as legitimate or fraudulent because they occurred in a distributed work environment where there are no witnesses to corroborate the injury.
The following strategies can help organizations prepare for short- and long-term challenges:
- Prepare teams to handle an influx of COVID-19 claims. Also, checking and adjusting reserving estimates should be done more frequently.
- Onboard new tools to increase productivity. New platforms, for example, should be evaluated to help companies prepare for a resurgence when the economy recovers.
- Augment in-house analytics with artificial intelligence. Smart carriers and TPAs are looking for partners that can augment their in-house expertise with AI-as-a-service. This new approach enables them to unlock unstructured insights buried in scans, images, handwritten notes, combine them with structured data from a cross-industry data lake, and generate predictions based on a range of AI techniques. The result is more accurate forecasts overall, and the ability to generate predictions on unique emerging cases, such as COVID-19.
- Expand provider networks. Along with preparing for recovery, incorporating new specialists is also advised; such as pulmonologists and immunologists who can treat conditions such as COVID-19.
- Optimize legal panels.
- Consider settling potentially expensive claims.
If you have any questions, please do not hesitate to reach out. We are here to help.
Dave Wissel is a Client Advisor and Partner at Gulfshore Insurance who specializes in construction, landscaping, and the oil and petroleum industries. Comments and questions are welcome at dwissel@gulfshoreinsurance.com
Please note: The content of this article was taken from workerscompensation.com
Although the health and safety of our community is our number one priority during the COVID-19 outbreak, there are many concerns surrounding the degree and duration of disruptions to business activity and daily life. Mandatory and voluntary quarantines, social distancing to groups of 10 or less, restricted travel, and business closures are increasing measures being taken around the United States. These disruptions primarily affect businesses as they begin to lose inventory, revenue, and profit. From mom and pop shops, to tourism hot spots, concert venues, and restaurants the impact will be felt by all. Not to mention that this rippling affect will then be felt by suppliers, contractors, vendors, and service providers.
For insureds and insurers, once-hypothetical questions surrounding COVID-19 are quickly turning to familiar and regular insurance coverage questions such as the availability, scope and limitations of coverage, number of occurrences, exclusions, along with limits, sub-limits, deductibles and retentions. The claims that come out of COVID-19 will also provoke unique question and present their own set of challenges.
First-Party Business Interruption Coverage
First-party policies covering commercial property insurance provide coverage for business income loss by adding an endorsement to the insured’s property policy. This endorsement is designed to protect the insured for losses of business income it sustains as a result of direct loss, damage, or destruction to insured property by a covered peril. Although many such clauses are in use today, a typical business income insurance clause reads as follows:
“We will pay for the actual loss of business income you sustain due to the necessary suspension of your ‘operations’ during the period of ‘restoration.’ The suspension must be caused by the direct physical loss, damage, or destruction to property. The loss or damage must be caused by or result from a covered cause of loss.”
Physical Loss or Damage Requirement
BI coverage is often part of the commercial property policy a business holds. This form adds coverage, in certain instances, for lost business income, contingent business interruption losses, and losses due to certain action taken by civil authorities.
To obtain coverage resulting from the current COVID-19 crisis, the existence of the virus would need to constitute a Covered Cause of Loss, which results in physical loss of or damage to the covered property. This is unlike a fire, hurricane, or flood, which are common causes of losses that cause visible damage to property. As mentioned earlier, businesses are closing, even though there may be no apparent damage at all. But, if the coronavirus is found within the confines of a workplace or business, this arguably constitutes damage to the property, albeit at a microscopic level that cannot be seen.
Duration of Lost Income Claim
Each policy is unique with different definitions and measurements relevant to the period of restoration. Complications can also arise where an insured opts not to resume business operations. However, business interruption typically includes coverage for repair or replacement of property impacted, in addition to loss of business income through the date the damaged property is repaired or replaced.
Calculation and Adjustment of Accepted Claims
Unfortunately, insureds bear the burden of substantiating claimed BI losses. When a claim is being reported, it’s important for the insured to detail and retain documentation for all business activity, direct or indirect cause of any disruptions, and mitigation efforts. It’s also important to note that insureds should be able to value and substantiate losses by referencing business history, benchmarks, and forecasts.
If you have BI coverage on your policy and find yourself needing to temporarily close your doors, we recommend you file the claim with your insurance company. If you are usure if you have this coverage, I am more than happy to review your policy. At Gulfshore Insurance, we specialize in insurance and risk management for the restaurant industry and can answer any questions you may have.
Hundreds of construction workers are killed every year from ladders and scaffolds, and many thousands more suffer serious injuries that are permanently disabling. It is estimated that more than 30% of workers’ compensation claims costs stemming from construction sites are the result of falls from elevated surfaces.
A recent study indicated that injuries related to falls from elevated surfaces are more severe than other injury claims because these accidents result in more time away from work, damage to multiple body parts, and more short- and long-term disability leave.
Do Not Let These Accidents Happen to You
- A worker, who was standing on the top of a stepladder, fell when the ladder shifted. He suffered a spinal injury and was out of work for four months.
- Another worker failed to secure an extension ladder at the top and fell 20 feet when the ladder slipped away from the wall.
- Two men were working high up in a building atrium when their scaffold collapsed. They plunged four stories to a concrete deck. One man was dead on arrival at the hospital; the other was in critical condition.
- When a three-story wooden scaffold collapsed, two workers fell to the ground, suffering serious neck and back injuries. A third man working under the scaffolding was also injured.
It’s crucial for construction companies and their workers to implement regular safety training — and put that training to practice. Linked below are several helpful OSHA resources and fact sheets to improve worker safety at your organization:
LADDER SAFETY
SCAFFOLDING SAFETY
FALL PROTECTION
Tim Spear, is a Client Advisor and Partner at Gulfshore Insurance specializing in the construction, oil/petroleum, and landscape industries. Through his consultative and diagnostic approach, he helps clients develop customized programs to meet their risk management needs. Comments and questions are welcome at tspear@gulfshoreinsurance.com
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
