Archive for August, 2014

Employment Practices Liability, Are You Self-Insuring?

Posted on: August 29th, 2014 by Commercial Insurance No Comments

Congratulations business owner, you’re celebrating your tenth year in business and although the home runs are hard to come by, you’re seeing lots of singles and doubles. Things are good. You now employ 25 people and through ten years in business, accidents/losses/claims, you can count on one hand. Enter Employment Practices Liability Insurance (EPLI), you either think you have it because “your policy covers everything” or you’re not sure, which likely means you do not have it.

Employment Practice lawsuits have been growing in popularity the last ten years. EPLI provides protection for the business owner against lawsuits from employees, former employees and even customers/clients. High on the list of the most popular employee lawsuits include:

  1. Wrongful Termination
  2. Discrimination
  3. Harassment

With a continued difficult job market, job insecurity and the average person having 8 to 10 different jobs in their lifetime, it’s easy to see how some people out of anger or necessity are not going to leave or lose their job quietly.

Here’s a real world example and a claim paid out of the business owner’s pocket. Current employee of ten years gets into a bad car accident on the weekend (nothing to do with work); bad enough where the employee is out of work for three months. Business owner feels for the injured employee and keeps the job available to employee and gets by paying overtime to other employees and hiring temp help when needed. Employee returns to work after the three months only to learn she cannot sit at her desk for extended periods of time due to back pain and has trouble focusing on her job. Business owner accommodates employee with reduced hours and job function but after six additional months the employee is not improved and they must let employee go in order to hire someone full time to handle the job. Business owner is sued for wrongful termination under the Americans with Disabilities Act and the employee wants to be paid. After six additional months, lots of wasted time/emotion and legal bills the business owner settles suit out of court.

Business owner pays $50,000 to former employee and $30,000 of his own legal bills.

Today a business owner is more likely to have an EPL claim than a property or general liability claim. From the “harmless” joke around the office, the person you choose not to hire, and even the “overly-helpful” delivery driver, every business has the risk. Newer companies are even more at risk with all the focus on growing the company and no time spent building procedures for hiring, firing and disciplinary action of employees.

For more information on Employment Practices Liability claims, how they can impact your business, and what you can do about it, Call us. You have questions, We have the answers.

Your Car Insurance – Full Coverage – and Ice Cream

Posted on: August 25th, 2014 by Personal Insurance No Comments

Summer is a time for ice cream! At our agency we even have the ice cream truck stop by our office a few times during the summer. These ice cream truck visits tend to be a big hit.

You would think that it would be easy to select an ice cream treat from the truck but actually it can be quite difficult when you like everything.

When I recently asked a fellow employee to grab me an ice cream from the truck they started in with several questions. Do you like chocolate or vanilla? Jimmies or no jimmies? Slush or frozen candy bars? Our ice cream truck has numerous options.

It was difficult for them to grab me an ice cream without more information! Because of the assortment and the fact that “ice cream” could mean so many things, this was a challenge.

We at Herlihy Insurance Group have a similar dilemma when our clients contact us to order “full coverage” on their car. You see there is no such thing as “full coverage”.

“Full coverage” isn’t a coverage in itself. It’s a phrase generally used to designate a number of coverages that provide a good amount of protection: specifically liability, comprehensive, and collision coverages.

In Massachusetts your car insurance has twelve basic coverage options. It takes us about 5 minutes for us to briefly what each of these coverages can do for you. If you are new to MA car or every time you get a new or new to you car we hope you have 5 minutes to hear about your options.

I probably take that long sorting out my ice cream choices! Enjoy the last few weeks of summer.

Fiduciary Liability and ERISA Bond, Mostly Misunderstood

Posted on: August 22nd, 2014 by Commercial Insurance No Comments

As an owner or officer of a business, you probably had a hand in if not all hands in on the retirement plan the business offers the employees. What’s most misunderstood or ignored because we probably don’t like the answer, is that as the retirement plan’s administrator you have assumed Fiduciary responsibilities to all plan members and you, individually can be held personally liable for failing to act in the best interest of the plan members. Let’s try that one again, because this is where many business owners say they don’t want to hear anymore, Your Personal assets are at risk as administrator of your retirement plan.

Most are familiar with the ERISA bond they have on their retirement plan. The ERISA bond is that piece of paper the accountant or third-party administrator is looking for every year to properly complete the filing of your retirement plan. The ERISA is a fidelity bond that protects the employees from dishonest acts by administrators, trustees or third-party vendors. The ERISA bond Is Not insurance to protect administrators or trustees from liability suits.

Fiduciary Liability provides protection for those individuals that have the fiduciary responsibility found in the ERISA law. The administrators and trustees that make plan decisions concerning management of assets and liabilities are liable to the plan members. AND, this is important, when you elect to use a third-party administrator to design and advise your plan, this does not remove your fiduciary responsibilities to the plan members. You cannot delegate your responsibility to someone else. If someone you hired messes up, you’re on it.

Some common claim examples we’ve seen over the last two years include;

  1. Delay by outside plan administrator to transfer fund balances from one investment to another over a series of years, Settlement of $1,000,000, Defense costs of $250,000
  2. Wrongful elimination of a popular investment option and the lack of communication about the change, Settlement of $686,000, Defense costs of $300,000
  3. Department of Labor charge of excessive management fees, Settlement $2,000,000+

Twenty years ago, when a policeman or physician told you something, the discussion was over and we took the word of the “professional” as law of the land. Employer conversations with employees had a similar relationship. Today everything is questioned and when something does go wrong someone must be to blame. If a retirement plan does not live up to plan members expectations you can almost guarantee the group will be heard. Fiduciary Liability is available to answer a suit from unhappy plan members. If your business offers a retirement plan or employee benefits, you should have Fiduciary Liability insurance.

For more on Fiduciary Liability and your responsibilities, Call us, We have the Answers.

Sharing was suppose to be a good thing!

Posted on: August 11th, 2014 by Personal Insurance No Comments

My parents always told us to share our things. I must admit we were probably not the BEST sharers growing up but this concept was not foreign to our home.

During the past two years in Massachusetts we have seen a number of new “car sharing” or “ride sharing” enterprises. Some of these are quite innovative!

My kids are very excited about their potential new “sharers”. They figured they could exchange some rides for extra cash and let some one use their car while they were out of the city.

Unfortunately I had to break it to them that this was not a good idea. In Massachusetts the majority of our personal car insurance insurers EXCLUDE coverage for your car when you “rent” your car to another driver through a car sharing service and they definitely exclude coverage when you give rides for a “fee”.

Of course they looked blankly at me and said, “Mom, you say no to every thing. We will check with Dad.”

And if all goes as usual they will check with Dad and he will say, “Ask your Mom”.

When they do come back to me again on this I am going to direct them to the Consumer Alert recently posted by the Division of Insurance. Click here if you would like to see this for yourself (PDF).

Bottom line is if that if you are considering car-sharing or ride sharing services, please check in with your agent to determine if you car insurance policy will provide you coverage for these innovative transportation options.

Sharing is still really good thing! Just be careful with your car.