Cal/OSHA Adopts New Non-Emergency COVID-19 Regulations

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

On Thursday, December 15, 2022 the California Occupational Safety & Health Standards Board (Cal/OSHA) voted on newly proposed COVID-19 regulations during a public forum meeting. With a 6 to 1 vote, the Non-Emergency COVID-19 Prevention Regulations were passed and adopted. The regulations will take effect once they are approved by the Office of Administrative Law in January 2023. They remain in effect for 2 years thereafter. However, the recordkeeping subsections will remain in effect for 3 years.

Previously, the proposed standards had the word “permanent” in the title despite it having the two and three year expiration dates. Cal/OSHA is now referring to the regulations as the “COVID-19 Prevention Non-Emergency Regulations.”

These new regulations include some of the same requirements found in the current COVID-19 Prevention Emergency Temporary Standards (ETS), but there are some new provisions.

First, let’s begin with pointing out some key requirements that are staying the same.

• With the new regulations employers will still need to make COVID-19 testing available at no cost to the employee and during paid time to employees after a close contact.

• Employers will still need to provide their employees with face coverings and respirators upon request.

• Employers must still report information about employee deaths, serious injuries, and serious occupational illnesses to Cal/OSHA.

Some key difference between the current ETS and the new regulations include:

• Employers are no longer required to maintain a standalone COVID-19 Prevention Plan, as long as COVID-19 requirements are addressed within a section of their Injury and Illness Prevention Program (IIPP).

• Employers must now report major outbreaks to Cal/OSHA.

• Exclusion pay for employees has been removed from the new regulations. This means employers will no longer be required to pay employees while they are excluded from work due to COVID-19. Instead the employer would only need to provide employees with information on the benefits they would be entitled to under state, federal, and local laws.

• There are also some definition changes to what is considered “close contact” and “exposed group.” “Close contact” is now defined by looking at the size of the workplace in which the exposure took place. For indoor airspaces of 400,000 or fewer cubic feet, “close contact” is now defined as sharing the same indoor airspace with a COVID-19 case for a cumulative total of 15 minutes or more over a 24-hour period during the COVID-19 case’s infectious period. For indoor airspaces of greater than 400,000 cubic feet, “close contact” is defined as being within six feet of a COVID-19 case for a cumulative total of 15 minutes or more over a 24-hour period during the COVID-19 case’s infectious period. The term “exposed group” was clarified to include employer-provided transportation and employees residing within employer-provided housing that are covered by the COVID-19 Prevention standards.

Information provided by Cal/OSHA. For a full and detailed list of regulations please refer to Cal/OSHA’s Title 8 Proposed State Standard.

In order to be best prepared for these changes, it is recommended employers review the California Department of Public Health (CDHP) and Cal/OSHA guidance on requirements for things such as the use of face masks. Employers must also develop, implement, and maintain effective methods to prevent COVID-19 transmission by improving ventilation. It’s important to review CDPH and Cal/OSHA Interim Guidance for Ventilation, Filtration, and Air Quality in Indoor Environments.

Cal/OSHA Proposes Permanent COVID-19 Standards

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

With the COVID-19 Emergency Temporary Standards (ETS) scheduled to expire at the end of the year, Cal/OSHA has proposed new permanent standards.

The proposed permanent COVID-19 standards will be voted on during the December 15, 2022 Occupational Safety and Health Standards Board meeting. If passed, despite the word “permanent” being in the title, the standard will be in effect for the following two years. However, the record keeping requirements of the standard will apply for the following three years. So, with an effective date of January 1, 2023, the COVID-19 requirements can be expected to lift on January 1, 2025 and the recordkeeping requirements expected to lift on January 1, 2026.

Some proposed changes within the permanent COVID-19 standards include:

• Employer Notice Requirements - The proposed permanent standards edits what information employers need to include in exposure notices to employees and the acceptable ways in which employers must distribute those notices.

• Definition Changes - There are definition changes to what is considered a “close contact,” an “exposed group,” an “infectious period,” an “outbreak,” a “returned case,” and more.

• Removal of the Exclusion Pay Policy - Under the current ETS, employers have to provide exclusion pay before requiring employees to exhaust other forms of potential paid leave. With the new proposed standards this is eliminated and employers would only need to provide their employees with information about local and federal COVID-19 benefits.

• Reporting and Recordkeeping Requirements - Employers will no longer need to keep a record of close contacts and will no longer have to report information about workplace cases and outbreaks to their local health department. However, in a major outbreak setting, employers must report the outbreak to Cal/OSHA. That being said, employers still need to be aware of their local health department’s requirements.

For a detailed look at the proposed changes please refer to Cal/OSHA’s formal proposal document.

While there appears to be few differences between the current temporary standards and the new proposed permanent standards, it is recommended for businesses to locate and review their COVID-19 Prevention Program to ensure it can be readily updated. The new proposed permanent standards removes the requirement for employers to keep a separate COVID-19 Prevention Program, as long as their Injury and Illness Prevention Program (IIPP), includes COVID-19 policies. So even if you decide to only have an IIPP, it will still need to be updated with the latest COVID-19 procedures. Rancho Mesa has a COVID-19 Prevention Program template, that can be downloaded here.

Rancho Mesa will update its clients and readers with the status of the final rule once Cal/OSHA votes on December 15, 2022.

Proposal to Include COVID-19 Claims in EMR Calculation is Denied

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

It appears the COVID-19 pandemic has finally entered an endemic stage and most companies have fully re-opened and/or are offering their employees some type of a hybrid work schedule. With this being the case, the California Workers’ Compensation Insurance Rating Bureau (WCIRB) proposed to amend the rule that excludes COVID-19 claims from the calculation of experience modifications for only claims with incident dates from December 1, 2019 through August 31, 2022. In addition, the WCIRB proposed that effective September 1, 2022, any new COVID-19 claims occurring after this date would be factored into the calculation of an employer’s experience modification rate.

The WCIRB’s rationale for this recommendation was that current circumstances have greatly changed since the rule to exclude COVID-19 claims from the experience rating were initially adopted in 2020. COVID-19 is no longer a temporary short-term phenomenon and the risk of infection will be present in the general population for the foreseeable future. 

With workplace safety standards in place, personal protective equipment and vaccinations available, employers who are diligent in protecting their employees would in turn have a lower experience modification than less safety-conscious employers in the same industry. 

Fortunately, in late June 2022, this change was not approved by Commissioner Lara, but employers should still actively try to prevent the spread of COVID-19 within the workplace by having a written COVID-19 prevention program in place and follow the requirements set by the state and local health department. 

While employers don’t have to worry that COVID-19 cases will affect their experience modification rate, they should still be concerned about the effects on their employees and bottom line. Having employees miss work because of COVID-19 puts extra strain on other employees and can effect productivity, and thus profitability.  

Rancho Mesa has updated its COVID-19 Prevention Program Template designed for California businesses. Request your COVID-19 Prevention Plan template online or contact me at sclayton@ranchomesa.com or (619)937-0167.

Cal/OSHA Releases Final COVID-19 ETS

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

On Wednesday, April 6, 2022, Cal/OSHA released its third and final version of its COVID-19 Emergency Temporary Standard (ETS) that was approved by the Standards Board at its April 21, 2022 meeting. The revised standard is expected to remain in effect from May 6, 2022 through December 31, 2022.

The third revision removes some language and requirements. Most notably:

• Requirements of the ETS are the same for vaccinated and unvaccinated employees, and the definition for “fully vaccinated” has been removed.

• California Department of Public Health's (CDPH) guidance governs exclusion and return-to-work criteria for those with a close contact, and when face coverings are required.

• The “light test” for face coverings has been removed.

• Self-administered and self-read testing is now acceptable to return to work when it includes independent verification like time-stamped photography.

• A new definition for “returned case” has been added to identify those who have returned to work per the requirements in the ETS and did not develop COVID-19 symptoms.

• Cleaning and disinfection procedures have been removed.

• Requirements for physical distancing (except when there is a major outbreak) and barriers have been removed.

Cal/OSHA has revised several documents that may be helpful for employers:

• FAQ on COVID-19 Prevention Emergency Temporary Standards

• What Employers and Workers Need to Know About COVID-19 Isolation and Quarantine

• Revisions to the COVID-19 Prevention Emergency Temporary Standards

Rancho Mesa has revised its COVID-19 Prevention Program template based on the April 6, 2022 proposed revised ETS language. Download a copy of the template from within the Risk Management Center, or from the link below.

California Prepares to Restore COVID-19 Paid Sick Leave

Author, Kevin Howard, Account Executive, Rancho Mesa Insurance Services, Inc.

On January 25, 2022, California Governor Gavin Newsom announced he had made a deal with legislative leaders on a framework that would provide up to two weeks of supplemental paid sick leave to those who are unable to work due to COVID-19, quarantining or experiencing side effects from the vaccine. As of February 7, 2022, the California legislature passed the bill and we are waiting for the governor to sign it into law.

Previously, the federal government’s Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which expired September 30, 2021, had provided supplemental sick pay for workers.

California’s proposed employee COVID-19 paid sick leave law would retroactively apply to employers of more than 25 employees from January 1, 2022 through September 30, 2022.

The law would replace wages for:

• People who are unable to work or telecommute because they either have COVID-19 or have symptoms and are seeking a diagnosis,

• Individuals caring for a child or family member who is required to quarantine or self-isolate, and,

• People experiencing vaccine-related side effects.

With the recent wave from the Omicron variant, employees are wondering if and when they will be paid. The proposed law would allow employers to be reimbursed for wages paid to employees who need to stay home due to COVID-19 and prevent the further spread of the virus to co-workers.

The governor announced employers would likely be reimbursed for wages through business tax credits and funding through a small business COVID-19 relief grant program.

Providing a state-sponsored mechanism for employee COVID-19 supplemental sick pay should be welcomed by California employers and employees who may otherwise be tempted to file COVID-19 workers’ compensation claims as a way to replace some wages. Keeping non-work-related COVID-19 cases out of the workers’ compensation system benefits everyone involved by keeping costs, and ultimately premiums, down.

Visit Rancho Mesa’s COVID-19 page for the latest Cal/OSHA COVID-19 Prevention Program Template, articles, podcasts and other resources.

For questions about your workers’ compensation insurance, contact me at khoward@ranchomesa.com or (619) 438-6874.

Revised 2022 COVID-19 Prevention Program Template Now Available

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

Rancho Mesa has revised its written COVID-19 Prevention Program Template based on the Emergency Temporary Standards (ETS) adopted by California’s Department of Industrial Relations Occupational Safety & Health Administration (Cal/OSHA) in December 2021 and effective as of January 14, 2022.

To access the revised template, clients can access the editable version from the Risk Management Center, or request to download the PDF, below.

The template is designed to assist organizations in the development of a COVID-19 Prevention Program that is specific to their organization and locations.  Rancho Mesa highly recommends organizations using this template also consult their state’s Occupational Safety & Health Administration and local Public Health Department for specific requirements for their area as requirements can vary from state to state and municipalities. For example, California’s Department of Public Health’s recent guidelines supersede some of the requirements in the ETS.

A discussion on the differences between the previous version and the current version can be found in Ep. 162

Remember, this template alone is not enough to be in compliance. It must also be adapted to each organization and specific locations, as well as implemented. Organizations’ programs may require additional information if the company provides employee housing.

For current COVID-19 information, visit www.RanchoMesa.com/covid-19.

Download COVID-19 Prevention Program Template

Revised COVID-19 Prevention Program Template

The Field Guide to Navigating Your Insurance in 2022

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

As a business owner preparing for 2022, what areas of insurable risk should cause you the biggest concerns?

During the 2021 year, we experienced a hardening insurance market. All lines of insurance were negatively impacted as a result of the catastrophic events we experienced such as wildfires, flooding, hurricanes, and the emergence of COVID-19. Large national and worldwide crises like these caused underwriting losses in the billions of dollars to both front line insurers and reinsurers. 

COVID-19’s impacts included:

• The loss of income/revenues

• Labor shortages

• Health concerns

• Relocation of labor forces

As the year comes to a close, we now have some answers but even more questions about what challenges 2022 will bring. Below are a few remaining questions that create uncertainty.

• Will Property, Auto, General Liability, Excess, Cyber, and EPL insurance continue to see pressure? The short answer is yes.

• What can I do today as a business owner to prepare and better mitigate these increases?

  • Start your renewal process a minimum of 120 days away from your expiration date. Learn more about the pre-renewal process in our article, “3 Reasons Your Pre-Renewal Meeting is Key to your Success.”

  • Be willing to meet and discuss your particular situation, needs and goals.

  • Choose a broker that specializes in your industry and can negotiate with the marketplace from a position of expertise.

  • Evaluate the services that you receive from your broker’s agency to assure they align with your specific risk management needs. Are they proactive or reactive?

Where is the Workers’ Compensation Industry Going in 2022 and Beyond?

What is expected of Workers’ Compensation in 2022? The short answer is that this market will remain soft.

The Workers’ Compensation Insurance Rating Bureau (WCIRB) has asked for a modest decrease in overall rates and most carriers’ filings have reflected that recommendation. However, these are averages and many industries will find these decreases harder to come by.

What is expected of Workers’ Compensation in 2023? There are several leading indicators that present early signs of a hardening market.  Here are a few:

• Wage inflation for most businesses. This will lead to higher temporary disability payments to injured workers thus increases in overall claim amounts.

• Wage inflations within insurance carrier’s personnel. This will cause a rise in their overhead costs and then a subsequent rise in their combined ratios which will impact their bottom line.

• The likely inclusion (September 2022 and beyond) of COVID claims in the Experience Modifier Rating formula (X-Mod). While this is not yet official, approval appears likely.

Preparing for the hard workers’ compensation market starts today with our checklist.

We will explore those at length in a series of articles beginning in January 2022. Subscribe to our newsletter to receive those articles. For now, here are a few tips:

• Utilizes a Workers’ Compensation Gap Analysis and Opportunity Assessment (through the Risk Management Center).

• Benchmark your performance to industry standards to look for areas of improvement. Learn more about Rancho Mesa’s KPI.

• Choose your workers’ compensation carrier wisely. Learn more about selecting a carrier in the article, “How to Choose a Workers’ Compensation Carrier Partner.”

• Have you ever considered performance-based programs? If not, maybe it’s time to bet on yourself. Watch the “Deductible Workers’ Compensation: Understanding performance-based insurance programs” webinar.

With workers’ compensation premiums representing a significant line item on many profit and loss statements, staying up to date on the rapidly changing environment should be a priority for all businesses. And, preparing for the expected rate increases is more important than ever with inflationary costs already choking profitability for so many operations. Our series of articles starting in January will help in this education process and allow you to better understand steps you can take now to weather this building storm.

Incorporating a clear strategy as it relates to your insurance portfolio is perhaps more critical than ever leading into 2022. With pricing increases across all lines of coverage becoming more and more common, managing this line item on your financials should be a proactive process with your broker. Start that dialogue now and develop the right plan to design and coordinate the most comprehensive and competitive program possible.

Cal/OSHA Adopts Revised ETS Through April 2022

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

On Thursday, December 16, 2021, the Cal/OSHA Standards Board voted in favor, 6 to 1, of adopting the revised COVID-19 Prevention Emergency Temporary Standard (ETS). This is the third iteration of the ETS since it originally went into effect in November 2020 and it happens to be the second and final re-adoption that’s allowed. 

The newly adopted revised ETS goes into effect on January 14, 2022 when the current ETS expires, and it will be in effect until April 14, 2022, at which time the temporary standard must expire or Cal/OSHA has to adopt a permanent standard in order to keep some sort of COVID-related standard in place.

Based on the discussions at the Cal/OSHA Standards Board’s December 16th meeting, it looks like Cal/OSHA is moving forward with proposing a permanent COVID-19 standard in March or April 2022. So, we’ll keep an eye on that.

Changes to Cal/OSHA’s COVID-19 Prevention Emergency Temporary Standard:

COVID-19 TEST

Starting January 14, 2022, there is a new definition for what is considered a “COVID-19 test” to account for over-the-counter tests that are now readily available. The new definition specifically says if you’re using an over-the-counter test, it cannot be both self-administered and self-read unless observed by the employer or an authorized telehealth proctor.

So, if an employee wants to use an over-the-counter COVID-19 rapid antigen test, they’ll need to either have the employer or an authorized telehealth proctor witness the test being performed and the results generated. This is really to prevent employees from providing false results to employers.

FACE COVERINGS

The new ETS also provides more details about what types of face coverings are now allowed and what’s not. Acceptable face coverings include surgical masks, a medical procedure mask, a respirator worn voluntarily, or a tightly woven fabric or non-woven material of at least two layers that does not let light pass through when held up to a light source. There are exceptions for clear face coverings when worn strictly for accommodations purposes. Coverings must be secured to the head with ties, ear loops or elastic bands that go behind the head.

This means many of the cloth masks that are currently being used by employees will no longer be acceptable under this new standard. Scarfs, ski masks, bandanas and other make-shift face coverings will not be permitted.

FULLY VACCCINATED

The definition of “fully vaccinated” has changed a bit. The new language recognizes those who may have gotten their first dose of a two-dose vaccine series from one manufacturer and the second dose from another manufacturer.

WORKSITE

Another change is the definition of “worksite.” The new ETS clarifies that a worksite does not include locations where the employee does not have exposure to other employees. 

For example, if the employee is working from their home office, it would not be considered a worksite for ETS noticing purposes, nor would an office where the employee works by themselves and never is exposed to other employees.

TESTNG AFTER WORKSITE COVID-19 EXPOSURE

There are new requirements for testing employees after a COVID-19 exposure in the workplace. Regardless of vaccination status, employers must now offer testing to all employees who have had a close contact with a COVID-19 case in the workplace, regardless of their vaccination status. 

Prior to the revised ETS, employers did not have to offer testing to vaccinated employees who were exposed. This change is a result of break through cases in those who are fully vaccinated. The only exception for not offering close contacts testing, is for those who have recovered from COVID-19 within the past 90 days and do not have symptoms.

RETURN TO WORK

Another change for vaccinated employees includes wearing a face covering in the workplace in lieu of a quarantine. While those employees who are vaccinated do not need to quarantine if they have had a close contact with a COVID-19 case, as long as they are asymptomatic and test negative, they can return to the workplace, but must wear a face covering and social distance for 14 days following the last date of close contact. This rule also applies to those who have recovered from COVID-19 within the last 90 days and are asymptomatic.

For those who are unvaccinated and have had a close contact with a COVID-19 case, as long as they test negative and are asymptomatic, they can return to the workplace after a 10-day quarantine, however, they must social distance and wear a face covering for 14 days.

There is a 7-day quarantine option for unvaccinated employees that are asymptomatic if they test negative at least five days after the close contact. In this situation, the employee must maintain social distancing and wear a face covering.

TESTING DURING AN OUTBREAK

As for changes to how to handle testing as a result of an outbreak, vaccinated employees can no longer be excluded from being offered testing if there are three or more employee COVID-19 cases within an exposed group. So, employers just need to make sure they’re offering testing to both vaccinated and unvaccinated employees if they’ve had a close contact or were in an exposed group during an outbreak.

One last thing to consider, while Cal/OSHA’s revised ETS does not take into consideration the federal vaccination or weekly testing mandates, nor other state and local requirements, we recommend that you consult your local and state health departments for additional requirements.

Rancho Mesa will make available an updated COVID-19 Prevention Program template that incorporates the modifications, as soon as possible.

Visit www.RanchoMesa.com/covid-19 for all our COVID-related articles, podcast episodes, sample COVID-19 Prevention Program Templates, and links to insurance carriers, the CDC and other agencies.

OSHA Issues ETS Addressing Mandatory COVID-19 Vaccination or Testing

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

Update: November 16, 2021 - Since the original publication of this article, OSHA announced it “has suspended activities related to the implementation and enforcement of the ETS pending future developments in the litigation.”

Recently, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) announced a new Emergency Temporary Standard (ETS) to protect more than 84 million workers from the spread of the coronavirus on the job.

Under the ETS standard, employers must develop, implement and enforce a mandatory COVID-19 vaccination policy, unless they adopt a policy requiring employees to be either vaccinated or undergo weekly COVID-19 testing and wear a face covering at work.

The emergency temporary standard covers employers with 100 or more employees and provides options for compliance.  The standard also requires employers to provide paid time to workers to get vaccinated and to allow paid leave to recover from any side effects from the vaccination.

The ETS requires employers to:

1. Determine the vaccination status of employees, obtain acceptable proof of vaccination and maintain records and a roster of each employee’s vaccination status.

2. Require employees to provide prompt notice when they test positive for COVID-19 or receive a COVID-19 diagnosis.  Employers must then remove the employee from the workplace, regardless of vaccination status. Employers must not allow them to return to work until they meet required criteria.

3. Ensure each worker who is not fully vaccinated is tested for COVID-19 at least weekly (if the employee is in the workplace at least once a week) or within 7 days before returning to work (if the employee is away from the workplace for a week or longer).

4. Ensure that each employee who has not been fully vaccinated wears a face covering when indoors or when occupying a vehicle with another person for work purposes.

The ETS does not require employers to pay for testing.  However, employers may be required to pay for testing to comply with other laws, regulations, collective bargaining agreements.  So, check with state and local jurisdictions for requirements.

The ETS is effective immediately upon its publication in the Federal Register, which took place on Friday, November 5, 2021.  Employers must comply with most requirements within 30 days of publication and with testing requirements within 60 days of publication, or January 4th of 2022.

While more than half of the states are challenging the legality of federal OSHA’s ability to enforce the new ETS requirements, it is likely that individual states with their own OSHA State Plans (i.e., Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming) will eventually adopt the new ETS as their own with or without modifications.

California’s State Plan (Cal/OSHA) implemented the most stringent COVID-19 ETS in the country months before federal OSHA released its original COVID-19 ETS that only applied to the health care industry.

Employers of all sizes should pay close attention to not only what federal OSHA’s ETS requires, but also requirements issued by state and local municipalities.  Once your state adopts a COVID-19 ETS, be sure to also check your local ordinances, as some counties and cities are requiring additional measures.

If your state has not yet adopted the new federal OSHA ETS, which applies to our California clients, we recommend you start thinking about a game plan and maybe an alternate plan depending on whether your State Plan decides to adopt the ETS as it has been published or if they decide to adopt a more stringent ETS. You will want to consider the following:

• Will you, as the employer, require all employees to be vaccinated?

• Who will manage the vaccination records and the ongoing paperwork?

• If testing is offered as an alternative to a vaccine, who will pay for testing (the employer or employee)?

• If testing is offered as an alternative to a vaccine, will the company specify which type of test will be acceptable (PCR or Antigen)? Either is allowed, but the antigen tests must be proctored by a medical professional (virtually is allowed) or witnessed by the employer (for the over-the-counter home test). Who will administer the weekly tests?

As we learn more, Rancho Mesa will provide guidance and resources to mitigate risk in the workplace.

For questions about mitigating your risks, contact me at (619) 937-0167 or sclayton@ranchomesa.com.

How Increased Material Costs Leave Contractors Underinsured

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

Over the last 15 months, COVID-19 has brought numerous challenges to the construction industry. Second to only the labor shortage, the most pressing challenge faced by contractors is the spike in material costs which can leave them underinsured if a proper installation floater is not updated.

Lumber, steel, copper, and other building material costs rose anywhere from 100% to 500% between April 2020 and May 2021, depending on the material. Since most projects are bid 6 to 18 months prior to the start of construction, many suppliers and subcontractors were caught off guard and did not reflect these increases in their initial bids.  

Most contractors will purchase an inland marine policy that provides coverage for their miscellaneous tools, scheduled equipment, rented or leased equipment as well as an installation floater. It is important for contractors to understand the installation floater and how the increase in material costs could leave a contractor underinsured in the event of a loss.

An installation floater policy provides protection for direct physical loss or damage to materials, as well as supplies and labor costs for property being installed at jobsites. Materials are also covered while in transit and stored at temporary locations. The floater also extends coverage to the property until the installation work is accepted by the purchaser or when the insured's interest in the installed property ceases.

So, in the event of a covered loss, which includes fire, theft, explosions, transit-related damage and vandalism, a contractor’s installation floater will respond with coverage.

Proactive contractors should rely on their insurance advisor to discuss and design a program that addresses these unforeseen material and labor increases. In advance, consider the amount of product stored at any jobsite at one time, the amount of product that can be at risk in transit, the value of product stored offsite (i.e., storage units) and the protections in place that secure your product.

To discuss how an installation floater can protect your company, contact me at (619) 937-0167 or sclayton@ranchomesa.com.

Californians Wait for Revised COVID-19 Prevention Emergency Temporary Standards

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

Over the past few weeks, Californians have eagerly awaited news from the State’s Occupational Safety and Health Standards Board (Standards Board) on revisions to Cal/OSHA’s COVID-19 Prevention Emergency Temporary Standards after the Centers for Disease Control (CDC) released its latest guidance that ease mask wearing for those who are fully vaccinated.

On June 3, 2021, the seven-member Standards Board first voted to deny a revised set of standards that would place additional requirements on business owners and most notably prevent fully vaccinated employees from being able to take off their masks in the workplace if everyone in the room was not vaccinated. However, in the same meeting, the Standards Board voted a second time which led to the approval of the revised standards which were set to go into effect no later than June 15, 2021 when the State is scheduled to fully reopen.

With pressure from businesses, community groups and California Governor Gavin Newsom, the Standards Board held an emergency meeting on June 9, 2021, where they unanimously voted to rescind the proposed standards previously approved on June 3, 2021.

If all of this sounds confusing, you are not alone.

As of the publication of this article on June 15, 2021, business owners should be following the COVID-19 Prevention Emergency Temporary Standards that were adopted in November 2020 and May 3, 2021’s Executive Order N-84-20 which allows for fully vaccinated people who have been exposed to a COVID-19 case, but show no symptoms, to remain in the workplace. Rancho Mesa has created a COVID-19 Prevention Plan template based on those requirements. It is available for download.

The Standards Board is scheduled to meet on June 17, 2021 where it is expected they will propose new standards that are more in line with the CDC’s masking recommendations. The agenda provides information on how to attend the virtual meeting.

When changes are made to the COVID-19 Prevention Emergency Temporary Standards, Rancho Mesa will update its COVID-19 Prevention Plan template and make it available to the public.

Stay up to date on this issue and others that affect California businesses by subscribing to our weekly Risk Management Newsletter and podcast.

SB 93 Impacts Janitorial Companies’ Hiring Practices

Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

As businesses continue moving towards fully reopening, certain California employers will be faced with reemployment or recall requirements, due to Senate Bill 93 (SB 93). SB 93 was signed into law by Governor Gavin Newsom on April 16, 2021. The law requires that covered employers offer their employees who were laid-off due to the COVID-19 pandemic, available employment based on a preference system. 

While several industries are impacted by this new legislation, employers that provide “building services” such as janitorial, building maintenance, or security services to office, retail, or other commercial buildings also fall under the requirements of the new law.

As an expert insuring janitorial companies through our exclusive MaintenanceOne™ program, this impacts many of our clients. To understand some of the additional components of the new law, we have summarized some key points below:

Qualifying Employees

Employees that qualify for SB 93 protection must have:

• Been employed by a covered employer for “6 months or more in the 12 months preceding January 1, 2020.

• Been “separated from active service…due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, non-disciplinary reason related to the COVID-19 pandemic.”

• Worked two hours or more per week for the employer.

Requirements of the Employer

• Covered employers must offer laid-off employees all job positions that become available for which the employee qualifies. Laid-off employees will be deemed qualified if the employee held the same position at the time of the lay-off.

• The laid-off employee must be given five business days to respond to the offer.

• In the event that more than one employee would be eligible for a position, the employer must offer the position to the employee with the longest tenure based on the date of hire.

• An employer that declines to recall a laid-off employee on the grounds of lack of qualifications must provide the laid-off employee written notice within 30 days.

Record-Keeping

Covered employers must maintain the following records for at least three years starting from the date of layoff:

• Employee’s full legal name

• Employee’s job classification at time of layoff

• Employee’s date of hire

• Employee’s last known home address

• Employee’s last known email

• Employee’s last known telephone number

Records must also include any layoff notices and “all records of communications between the employer and the employee.”

Enforcement and Penalties

SB 93 compliance and enforcement is handled by the California Division of Labor Standards Enforcement (DLSE). The DLSE may order reinstatement, front and back pay, and benefits, as well as impose substantial penalties and liquidated damages. SB 93 takes effect immediately and expires on December 31, 2024.

The law also has a collective bargaining agreement waiver provision – any such waiver must be explicitly set forth in that agreement in clear and unambiguous terms.

No Retaliation

SB 93 prohibits employers from retaliating or taking adverse action against employees seeking to enforce their rights.

What’s Next?

Covered employers should take stock of their current situations and evaluate their options for compliance.  Employers should also take extreme caution when making their employment decisions. It is an especially difficult time for both employers and employees. Employers are expected to follow the law closely and employees are desperate to find employment. If not careful, this could lead to disagreements and potential employment related lawsuits.

If you are a janitorial business trying to navigate through these turbulent times, consider our  MaintenanceOne™ program which provides a full service Risk Management Program that can not only assist your business with its insurance needs such as Employment Practices Liability Insurance, but also assist with HR and compliance that can guide you through this process. 

Please contact me at (619) 937-0714 or jhoolihan@ranchomesa.com for more information on MaintenanceOne™.

A Hardening Employment Practices Marketplace Likely to Impact Many Businesses

Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

The Employment Practices Liability Insurance (EPLI) marketplace has faced a number of factors that are contributing to skyrocketing premiums and deductibles. Many insurance companies are facing the choice of whether to remain in the marketplace or exit altogether. Those willing to remain are then faced with having to consider the following changes:

• Increase their premiums to offset increased claim activity

• Increase their deductibles

• Consider adding exclusions of previously covered exposures

• Consider only renewing existing clients’ policies

• Pulling out of certain business segments such as retail, hospitality, leisure, and transportation which is currently being impacted the most from COVID-19.

Below are some of the main factors causing the hardening EPLI marketplace. As you will see, they vary significantly but combined they have created a perfect storm.

COVID-19

These are unprecedented times with businesses being forced to shut down for months due to COVID-19, employees having to work remotely and our economy seemingly coming to a standstill. Couple this with a significant increase in layoffs, severance packages, furloughs, and unemployment, and we have seen a significant increase in claims filed. By January 2021, the plaintiff’s bar had filed over 1,200 COVID-19 related employment lawsuits. These types of lawsuits have continued to grow each month since the pandemic began.

We have also seen the unemployment rate spike from 3.5% in March of 2020 to 14.7% in April 2020. Currently the unemployment rate has settled to about 8% but this still represents a double digit increase from2019.

EPLI claims often follow large changes in workforce, including reductions, promotions and demotions. Three areas of particular growing concern include:

• Sexual Harassment

• Privacy

• Retaliation

Sexual Harassment

The heightened awareness and increased public intolerance for harassment developed in part from the #MeToo movement has given a voice to people that are now not only speaking out but filing lawsuits against their employer for sexual harassment. This national attention has also altered the legal environment surrounding these types of claims, often leading to much higher settlements outcomes..  Industry wide, the total monetary benefits awarded to sexual harassment victims has increased 68% from 2016 to 2019 according to the U.S. Equal Employment Opportunity Commission.

Privacy

In addition to discrimination and sexual harassment claims, insurance carriers also anticipate privacy-related claims. As businesses begin to reopen, there are new policies and procedures in place that require a Human Resources department to question employees about their personal health, their health history, and their family’s health history. The nationwide Health Insurance Portability and Accountability Act (HIPAA) and other state-specific laws like the Illinois Biometric Information Privacy Act (BIPA) regulates how companies collect, store, use, and share biometric information. With temperature-taking requirements and a certification form filled out, there is a concern that some employees may feel their privacy has been invaded. 

Retaliation

There is also a growing concern that there will be more retaliation type claims relating to an employee’s use of social media. With COVID-19 in mind, employees are already expressing their concerns via social media about their employers’ lack of safety measures or personal protective equipment (PPE). It’s reasonable to consider that if these employees are terminated that they may feel they were retaliated against because of their posts.

Retaliation could also be a result of employees exercising their rights under Family Medical Leave Act (FMLA) or other benefits such as workers compensation or paid sick leave.

US Supreme Court LGBTQ Decision

The Supreme Court ruled in June 2020 that Title VII of the 1964 Civil Rights Act protects employees from discrimination based on sexual orientation and gender identification. 

Previously only 28 States awarded such protections. Now that these protections are law in all 50 states, we will likely see additional claims alleging employment discrimination based on gender identity and sexual orientation.

In conclusion, running a business remains a challenge under normal circumstances. Add in the many side effects of the pandemic and it can feel overwhelming. EPLI-related claims can result in catastrophic financial impacts to a company’s balance sheet. The cost of defending your business alone can potentially put a company out of business. While EPLI premiums continue to rise, so does your exposure to a myriad of claims that fall under this coverage umbrella. Having EPLI in place can mean the difference between absorbing fair and reasonable claim costs or forcing an uninsured business to close their doors. To learn more about EPLI coverage and ways to construct a policy that meets your needs, please reach out to me at 619-937-0174 or jhoolihan@ranchomesa.com.   

Can Employers Mandate a COVID-19 Vaccination Policy?

Author, Sam Brown, Vice President of the Human Services Group, Rancho Mesa Insurance Services, Inc.

As COVID-19 vaccinations become more available and the positive results of our efforts are realized, employers may ask how this impacts the workforce and a full-scale return to the workplace. More specifically, they may ask if an employer can mandate a COVID-19 vaccination policy.

The laws are complex, so please do not rely on this article as legal advice. Please consult your labor law attorney before deciding how to proceed.

The short answer is yes, employers can mandate a COVID-19 vaccination for employees, when it makes sense. 

The 1905 court case Jacobson v. Massachusetts forms the U.S. Equal Employment Opportunity Commission’s (EEOC) basis for guidance. Following a deadly smallpox outbreak in New England in 1901, the Supreme Court ruled that the government may impose “reasonable regulations” to protect the “safety of the general public.” The EEOC makes clear that employers may implement similar demands.

According to the EEOC, an employer can implement a mandatory vaccination policy if there is a job-related need for it or if non-vaccination threatens the health of other employees, customers or themselves. The EEOC’s guidelines date back to the 2009 outbreak of H1N1, and was updated in March 2020.

A mandatory COVID-19 vaccination policy would commonly be used in a health care environment or in emergency services where the likelihood of exposure may be higher based on the nature of the work, opposed to the average office environment that is following the Centers for Disease Control COVID-19 guidelines along with implementing a COVID-19 Prevention Plan.

Employers should take caution when deciding whether or not to implement such a policy and whether it makes sense for their industry and organization. According to OSHA’s January 2021 Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace, employers should not distinguish between workers who are vaccinated and those who are not. All employee should follow the same safety precautions regardless of vaccination status. 

Essential workers in sectors like construction and landscaping, community-based organizations and financial services to name few, can operate under the provided guidance without requiring their employees to get the COVID-19 vaccine in order to resume normal business operations.

Some employers are waiting to impose a mandatory vaccination policy, choosing instead to offer employees incentives for getting vaccinated. These incentives may include a vacation day, a few hours of regular pay, or a cash bonus. To avoid discrimination, an employer may offer the incentive to all employees if the company’s work force meets a vaccination goal. Whatever path you decide, make sure to include the policy in your employee handbook or COVID-19 Prevention Plan.

Considering a recent Kaiser Family Foundation survey, 27% of Americans are “vaccine hesitant.” So, the employer will need to decide if a COVID-19 vaccination policy is right for their organization.  Questions regarding mandatory vaccinations will continue to present a challenge to employers.

For specific questions about your company’s vaccine policy, consult our RM365 HRAdvantage™ portal’s live HR experts.

Construction Industry Faces Challenges Heading into 2021

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

As a result of COVID-19’s impact on the overall economy, the construction industry will likely see some strong head winds not only operationally, but also from a risk management and insurance standpoint in 2021.

Construction contractors are likely to feel the effects of economic uncertainty, insurance premium increases and labor storages moving forward. Specifically, when planning for 2021, contactors should consider:

• Economic Uncertainty

  • Funds may not be available as city, state and federal budgets are reduced.

  • Projects may be delayed or canceled.

  • Your back log of projects may be reduced.

  • Surety companies may implement tighter requirements.

• Insurance Impacts

  • The commercial insurance market may harden causing increased premiums.

  • Insurance carriers may have a limited capacity as they have been affected by the pandemic and natural disasters.

  • New exclusions may be added as policies are renewed.

• Labor Force Decreases

  • Employment Practices Liability (EPL) Exposure may increase as new and/or inexperienced employees are hired.

As we move into 2021 and begin to face these challenges, we’ve developed the following steps and actions you can take to help minimize these concerns:

• Economic Uncertainty

  • Audit your existing backlog and determine which projects may experience delays or cancellations.

  • Review and audit your existing surety program to make sure you have adequate capacity to meet your present and future surety needs.  Rancho Mesa’s Surety department has a best practices audit program to assess your needs.  Complete an interest form and our team will be able to assist you.

• Insurance Impacts

  • Meet with your insurance advisor and start the renewal process 90-120 days prior to your renewal.

  • With your insurance advisor, review all new coverage changes, conditions, and exclusions that will impact your risk management program.

  • Accurately project your rating basis (field payroll/sales) that will affect your workers’ compensation, general liability and excess insurance premiums.

• Labor Force Decreases

  • Use best practices during any labor reductions to limit EPL exposures like wrongful termination, discrimination, etc.

Through Rancho Mesa’s RM365 HRAdvantage™ Portal, clients have access to a library of resources and 50 human resources consultants to answer your questions and provide you information in making those decisions.

To discuss your 2021 risk management plans, contact me at (619) 937-0167 or sclayton@ranchomesa.com.

2021 Insurance Game Plan

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

As we come to the end of 2020, the most challenging year most of us have ever experienced, where COVID-19, wild fires and other natural disasters took their toll emotionally, physically, mentally and financially on all of us, we can only hope for a brighter 2021.

The insurance industry did not escape the impact of COVID-19 and the natural disasters, either. Insurance companies, along with their reinsurance companies, suffered catastrophic losses as a result. As with many industries, there will be lagging actions that will take place in 2021 to help these companies in their efforts to recover.

While there really isn’t a line of insurance that wasn’t impacted, the lines of insurance that suffered the greatest losses and impacts include:

• Property

• General Liability

• Excess/Umbrella

• Workers’ Compensation

• EPLI

• Cyber Liability

• Surety

• Employee Benefits

For this article, I will limit my discussion to the property and casualty lines and leave surety and employee benefits to another day.

To offset these losses, I anticipate any number of steps insurance companies will take as we move into 2021. But, let me just touch on those that I think will have the greatest impact and need for attention to business owners in 2021. 

Let’s review these and I will try and give you a small sampling of the implications for each action.

• Non-renewing policies

  • Carriers in many cases will not offer renewal terms.

• Reducing coverage limits and terms

  • Increasing deductibles, lowering aggregate limits particularly in the excess/umbrella marketplace.

• Add new exclusions

  • Businesses will start to see “communicable disease” exclusions added to various lines of insurance.

• Increase underwriting information needed

  • A higher emphasis on information particularly as it relates to a business’s policies and procedures to mitigate COVID-19.

• Raise premiums

  • This is the ultimate consequence and one we are all anticipating to see beginning in early 2021.

To many businesses, this will seem daunting and hopeless - one more hurdle to overcome to keep their businesses going. However, there are proactive steps you can take to mitigate these circumstances and have a strong year despite the adversity.

I’m a firm believer in being pro-active and not re-active. Following are steps you can take to meet this challenge head on:

• Meet with your insurance advisor 90-120 days from your renewal date.

• Understand the specific challenges you will be facing.

• Create a strategy on how to approach the insurance marketplace to ensure the most cost effective and comprehensive risk management program.

• Review and enhance your existing safety program. Rancho Mesa offers our RM365 Advantage Safety Star™ certification program. This is a comprehensive web-enabled training course designed to enable your employees from supervisory to front-line workers to be trained and certified in safety best practices. The insurance marketplace already places a high value on these types of safety trainings and certifications, so this will help your company’s productivity through fewer claims but also position you in a more favorable position in the marketplace.

• Benchmark your company’s safety performance to your industry and see which areas you are outperforming your peers and areas that need your attention. Rancho Mesa offers a benchmarking report we call StatTrac™ to our clients or to other companies who want to see where they stack up.

To close, let me reassure you there is light at the end of the tunnel for 2021. Be proactive; start 90-120 day out from your renewal; don’t let insurance issues sneak up on you; attack them head on and I believe you can make 2021 a great year for you and your company.

If you have any questions or want any help in devising a plan and you are a construction company, please reach out to Sam Clayton, our Construction Group Leader at sclayton@ranchomesa.com. If you are in the human services industry, schools, non-profit, healthcare, assisted living, etc., please reach out to Sam Brown, our Human Services Group Leader. And finally, we can be reached at (619) 937-0164 or at our website, www.ranchomesa.com.

I really believe there is no limit to what you can do – best of luck in 2021.

Preparing the Home Care Industry for 2021

This past year has brought significant changes to many industries as they navigated the effects of COVID-19. Below is an overview of the effects to the home care industry and what employers can do to be better positioned in the marketplace.

Impact to the insurance industry as a whole

Even prior to COVID-19, several key events occurred which began impacting pricing:

• 2018 California Wildfires – over $12 billion in losses severely impacted the reinsurance marketplace causing a ripple effect to insurers, many of which weren’t even in the property insurance marketplace.

• AB 218 – This law was signed last year which eliminated many of the statutes of limitation for people to file child abuse claims. Though this related to those who work with children, the same carriers who insure  the home care industry also work with industries serving children. Claims have risen 500% since January 2020.

• Social Inflation – Recent trends have shown an increase in litigation, claims costs and plaintiff friendly legal decisions.

What impacts will COVID bring?

• SB 1159 – The presumption that COVID claims will be compensable under workers’ compensation is severely impacting the costs towards California insurers. Recent estimates suggest over $2 billion has been paid to date.

• Healthcare companies hit hardest – The vast majority of the claims are coming from the healthcare industry. With the heighten risk, we’ve seen carriers exit the marketplace and a hardening of the market for those remaining.  

What can Employers do?

• Make sure all your documentation is in order. This includes:

  • Written COVID-19 Prevention Plan Template

  • If you have had any incidents – proper documentation regarding what was done in response to the incident and if any changes were made moving forward to keep incidents from happening again.

  • Post all CDC, state and local health department required information and postings.

• Make sure you are being properly represented to the marketplace. Most insurance carriers are improperly categorizing home care companies as healthcare risks. The exposures to a home care companies are far less risky than that of a hospital or health center. However, without proper discussion between your broker and underwriter, you will be categorized as a health risk. Make sure your broker is communicating the true exposure of where your employees work and what they do and the exposures they are truly facing to help you get the best pricing.

To discuss your situation and prepare for 2021, contact Rancho Mesa Insurance Services at (619) 937-0164.

6 Steps for California SB1159 COVID-19 Reporting

Rancho Mesa Insurance Services, Inc. has developed a six step guide to help employers navigate through the reporting of COVID-19 cases to their insurance carriers per California Senate Bill 1159 (SB 1159). The document will lead you through specific employee scenarios that will determine if you should report the claim.

California Governor Newsom signed SB 1159 into law September 17, 2020 and it is having several impacts on workers’ compensation and the presumption of the claim. These rules will continue, unless modified, until January 2023.

If the employer has fewer than 100 employees at a specific location and 4 employees test positive at that location, or if the employer has more than 100 employees and 4% of their total employees test positive, during a 14-day period at an employer’s specific location, the COVID-19 case is presumed to be work-related. Thus, the 4/4/14 rule. When in doubt, call your workers’ compensation carrier and discuss the specific situation. They will help you determine whether or not it is a workers’ compensation claim. 

To learn more about the elements of SB 1159, please listen to a recent StudioOne™ Safety and Risk Management Network podcast episode, in which President of Rancho Mesa, Dave Garcia, and President of Berkshire Hathaway Homestate Companies, discuss the bill’s impact on the workers’ compensation market.

Download “6 Steps for California SB1159 COVID Reporting” Form

Download “6 Steps for California SB1159 COVID Reporting” Form

CAL/OSHA Adopts Written COVID-19 Prevention Plan

Author, Emily Marasso, Media Communications Assistant, Rancho Mesa Insurances Services, Inc.

On November 19, 2020, California’s Occupational Safety and Health Administration (Cal/OSHA) Standards Board adopted temporary emergency standards to protect workers from COVID-19. These standards are expected to go into effect November 30, 2020, upon approval from the Office of Administrative Law.

Now, what does this mean for California employers? It means employers must have a written COVID-19 Prevention Plan. This written plan must include and address specific key points outlined by Cal/OSHA. These standards require employers to establish a system for communicating information about prevention, positive cases to employees, how cases will be identified and evaluated, a process for investigation and responding to cases, correction of hazards, training, physical distancing requirements, face covering, site-specific controls, reporting/recordkeeping and access, preventing the spread of the virus to other employees and a defined return-to-work criteria after a COVID-19 recovery.

Rancho Mesa Insurance has developed a COVID-19 Prevention Plan template for its clients to assist in the implementation and compliance of the new standards. Updated versions may become available as the standards are approved by the end of the month.

In addition, Rancho Mesa’s Risk Management Center offers additional tools employers can utilize to make sure they are in compliance with the new standards. Track daily COVID-19 symptoms in the Audit Track screen and deploy free online COVID-19 training for all employees from any mobile device. Our library of COVID-19 resources continues to grow and is available for our clients to access from the Risk Management Center and the RM365 HRAdvantage Portal™.   

For information on how to access these resources, please reach out to your Client Services contact.

Download COVID-19 Prevention Plan Template

Download COVID-19 Prevention Plan Template

Safety Programs Can Reduce Workers’ Compensation Premiums

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

As California business owners continue incurring costs as they work their way through the maze of ever-changing COVID-19 regulations and protocols, prioritizing critical elements of your internal safety program can directly lower your insurance costs. Refocusing on key areas below will help present an effective, detailed submission to the marketplace that will lead to talking points with an underwriter for schedule credits and ultimately, lower rates and premiums.

Employee Benefits

Workers’ compensation underwriters pay close attention to employee benefit plans from a submission they are reviewing to quote. A deeper dive will create inquiries on overall employee participation, employer’s contribution to the plan, and whether established “wellness” plans are made available. High participation and contribution can show underwriters that employees value the benefits being offered and that the employer is investing in their most important asset, the employees. Lastly, industry professionals commonly link reduced fraudulent workers’ compensation claims to more robust, supported employee benefit programs.

Formal Safety Program

Developing a formal, documented Injury and Illness Prevention Program (IIPP) is truly just a baseline for managing risk for any business. The IIPP must be a living, changing document that contemplates random/periodic inspections, regular meeting intervals, safety orientation for new employees, and detailed investigative reports performed by field and management. Your program can be compared to a book that sits on the shelf and develops dust. Or, if you are focused on best practice techniques, it can be used as a tool for education, training, and risk mitigation. It should change as your company changes and incorporate the safety priorities instilled from the top down. Additionally, incorporating safety programs like Rancho Mesa’s RM365 Advantage Safety Star™ training program for foreman and supervisors help make your safety program go to the next level and really stand out in the insurance marketplace. Dynamic IIPPs stand out in a workers’ compensation submission process. They provide much needed detail to simple Yes/No questions on a supplemental application and show just how important safety is to the organization that is being underwritten.

Return to Work Program

Companies of all types will share that they support a return to work program when their injured employee is cleared for modified duty. That support needs to be taken a few steps further to improve your program. Create job descriptions for potential modified positions. Identify and engage with specific doctors within your network and ensure that these job descriptions are on file. This process can often help expedite employees back to the field, warehouse, office, etc. and ultimately lower temporary disability payments which can lower claim reserves. Use Rancho Mesa’s RM365 HRAdvantage™ portal to generate job descriptions and manage employee’s modified duty in the Risk Management Center.

Hiring Practices

Developing “gates” in the hiring process are often overlooked as too expensive or time consuming.  But, the costs of bad hiring decisions can linger for years, impacting your bottom line and employee morale. Employers must strongly consider pre-employment physicals and drug testing, typically performed post interview and before an offer is made. As the Compliance Director for Current Consulting Group LLC, Andrew Current said, “The average cost of a pre-employment drug test is $45. The average turnover cost for an entry level employee is $6,600.”  There is added benefit with workers’ compensation underwriters who view pre-employment checks as key controls to minimizing claim frequency and severity. Take advantage of the New Employee Onboarding Checklist and other resources in the RM365 HRAdvantage Portal.

Website Development

Most, if not all, workers’ compensation underwriters begin their review process by accessing the company in question’s website to learn more about their operation, exposures, risks, etc. Therefore, seeing your website through this same filter and utilizing your broker as an additional soundboard of information, consider these possible edits and/or redesign of your website:

• Add a “Safety” link or tab, allowing space for sharing your company’s philosophy on managing risk.

• Include a section on any safety awards or recognition that you may have received.

• Remove any pictures on your website that might create confusion or concern about your operation as it relates to safety and risk.

• Include examples of safety protocol that are unique to your operation (e.g. proper use of machinery, ladder usage, cleanliness of operating areas, etc).

Like any potential internal investment, companies must always balance whether the time and resource commitment will ultimately benefit their company. Many of the above recommendations require minimal resources and can pay huge dividends in consistently securing the most competitive workers’ compensation pricing, often a significant line item on a profit and loss statement. You may find cost savings in areas you did not know were possible that can help your business survive and remain profitable in these difficult times.

To discuss how your company’s safety program can affect your workers’ compensation premium, contact me at (619) 937-0172 or dfrazee@ranchomesa.com.