Equipment Hazards and Ways to Reduce Exposure

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

The very nature of the construction business creates risk - from injuries in the course of employment, damage to property, third party liability, etc. One important area that can be overlooked is equipment security. While there is simply no way to eliminate 100% of risk to equipment, there are several steps a contractor can take to initiate proper controls and minimize losses in this area.

Managing Keys and Locks

Locks should be placed on all vehicles, storage sheds, portable equipment, and trailers. It is recommended that “high security” locks, which are pick-resistant or laminated in steel, be used in all cases. Chains should be case-hardened and thick enough to prevent cutting. Many contractors also use locking fuel caps on vehicles and passive alarm systems, for higher valued machinery, to disable equipment or sound an alarm when there is attempted theft.

Operating or Transporting Equipment

Drivers and/or operators of equipment must be screened prior to use. Requiring a valid driver’s license is a good start, but also consider asking for medical history, criminal background check, motor vehicle record, random drug screens, and sight and hearing checks. Employees should be trained properly in company safety procedures, rules, and emergency protocol. In loading or unloading situations, consider the angle of the ramp, how your employees are stabilizing the piece of equipment, placement of flags, and ensuring the ignition and brakes are locked.

Construction Site Security

Construction sites have always been attractive targets for thieves. The considerable value of equipment, product, tools, and machinery create strong appeal, particularly if that location is not properly secured. Stepping up the security at a jobsite can come in many forms but several best practice methods stand out. They include securing a specific area within the site for equipment storage. The more difficult it is for a thief to access equipment, the less motivated they will be to take the risk of accessing the site. Maintaining an equipment inventory control with photographs and “check-out” systems can be critical to holding employees accountable. Lastly, and perhaps the most logical task to improve security on a jobsite, are regular inspections. These can occur from superintendents, owners, managers, etc. This oversight shows all contractors performing work that your equipment is important and you are managing it regularly.

Fire Prevention

Managing the exposure to fuel is an important first step for preventing fire losses of equipment on a jobsite. Engaging an outside vendor to provide fueling services is always a possible solution, but may not be realistic. If the contractor is responsible for their own fueling, consider the flammability of different fuels, location of onsite fuel supplies, tank inspection, and methods for clean-up and disposal of the fuel. Regular intervals of visual inspections by the operator and any ensuing maintenance allow for easy fixes or repairs that minimize the development of bigger issues.

As the construction industry continues reaching strong post-recession levels, the use of equipment from trade and general contractors, across the board, is more prevalent. Developing a “safety net” around jobsites, pre-qualifying those using equipment, and prioritizing theft and fire mitigation lower your organization’s overall risk. Take some or all of the ideas above as your first step in integrating equipment security into your overall safety plan.

For additional information, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

California SB 1343 Expands Sexual Harassment and Abusive Conduct Prevention Training Requirements

Editor’s Note: This article was originally published on January 17, 2019 and has been updated for accuracy on September 12, 2019.

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

In September 2018, former California Governor Jerry Brown approved Senate Bill 1343 (SB 1343) which expands the requirements for Sexual Harassment and Abusive Conduct Prevention training within the workplace.

New Requirements

Prior to SB 1343, California Assembly Bill 1825, Assembly Bill 2053, and State Bill 396, required employers with 50 or more employees to provide supervisors with sexual harassment and abusive conduct prevention training every two years. SB 1343 drops the minimum number of employees to 5 and adds a requirement for training nonsupervisory employees.

According to Senate Bill 778, passed on August 30, 2019 which expands the training deadline, “By January 1, 2021, an employer having five or more employees shall provide at least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees and at least one hour of classroom or other effective interactive training and education regarding sexual harassment to all nonsupervisory employees in California. Thereafter, each employer covered by this section shall provide sexual harassment training and education to each employee in California once every two years.” 

The changes made by SB 778 not only extends the due date to January 1, 2021, but also addresses concerns about supervisory employees and clarifies when temporary workers must be trained. Read about the changes here.

Providing Training

The bills also requires the California Department of Fair Employment and Housing (DFEH), “develop or obtain two online training courses on the prevention of sexual harassment in the workplace. The course for nonsupervisory employees shall be one hour in length and the course for supervisory employees shall be two hours in length.” The department “expects to have such trainings available by late 2019,” according to a document provided by the DFEH. The online trainings are expected to be free for employers.

“In the interim period, DFEH is offering a sexual harassment and abusive conduct prevention toolkit, including a sample sexual harassment and abusive conduct prevention training. Employers may use the training in conjunction with an eligible trainer to provide sexual harassment and abusive conduct prevention training,” according to the DFEH.

An eligible trainer qualified to conduct this training would be:

• Attorneys who have been members of the bar of any state for at least two years and whose practice includes employment law under the Fair Employment and Housing Act or Title VII of the federal Civil Rights Act of 1964;

• Human resource professionals or harassment prevention consultants with at least two years of practical experience in:

  • Designing or conducting training on discrimination, retaliation, and sexual harassment prevention;

  • Responding to sexual harassment or other discrimination complaints;

  • Investigating sexual harassment complaints; or

  • Advising employers or employees about discrimination, retaliation, and sexual harassment prevention.

• Law school, college, or university instructors with a post-graduate degree or California teaching credential and either 20 hours of instruction about employment law under the FEHA or Title VII.

Note, DFEH does not issue licenses nor certificates validating a person’s qualifications to teach sexual harassment prevention training classes.

Other training options include the online Anti-Harassment training Rancho Mesa offers to all of its clients’ supervisors and employees throughout the country in response to California’s Senate Bill 1343 (SB 1343) and Senate Bill 1300 (SB 1300).

We also can recommend Equal Parts Consulting to provide in-person supervisor and/or employee training to those in San Diego and Orange Counties. To receive a discounted rate, please let them know you are a Rancho Mesa Insurance client.

Rancho Mesa Insurance will continue to monitor training options as they become available.

For questions about this training requirement or to learn how to enroll your supervisors and employees, register for the “How to Enroll Supervisors and Employees in the Online Anti-Harassment Training” webinar or contact Rancho Mesa’s Client Services Department at (619) 438-6869.

Resources

California Department of Fair Employment and Housing. "Sexual Harassment and Abusive Conduct Prevenetion Training Information for Employers.”
https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2018/12/SB_1343_FAQs.pdf

California Department of Fair Employment and Housing. “Sexual Harassment FAQs.”
https://www.dfeh.ca.gov/resources/frequently-asked-questions/employment-faqs/sexual-harassment-faqs/

Mitigating Risk at Height

Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

Industry Numbers

Falls from elevated heights are the single most hazardous injury within the construction industry; representing 38% of all construction fatalities (NSC construction & utilities). That is a scary fact if you are a painting contractor that works off the ground. In years past, it was common to see painters working on multi-story scaffolding with few controls in place, or working from ladders on top of trucks to get those extra couple feet needed to finish a project. Workers compensation underwriters have difficulty with risks that work over 30 feet. Why is this 30 foot threshold so critical to insurance companies who write workers compensation?

• Across the entire Construction industry, 16% of all fatal falls happened from above 30 feet (NSC Construction & Utilities). 

• In 2016, there were estimated to have been over 35,000 painters working in California and in total there were only 3 fatal falls (Bureau of Labor Statistics).

• That accounts for less than 5% of falls, slips, or trips leading to fatality in all of California.

Mitigating Exposures: Personal Protective Equipment (PPE) and Ladder/Scaffolding Safety

As with any business that is assessing risk, start by acknowledging the potential exposures of working outside. Besides utilizing appropriate Personal Protective Equipment (PPE) for work at height, the single largest exposure for any contractor is heat exhaustion. Making sure your employees are properly hydrated and shaded is easy to overlook and can have serious consequences. Fainting at height is a serious concern and any measures that can be taken to prevent this are essential. Requiring mandatory water breaks, encouraging employees to wear loose-fitting clothes, and offering shade and protection from the sun represents tangible measures that reduce the chances of an employee suffering from heat exhaustion.

Safety equipment has become more comfortable, lighter, and easier to store and transport. Working in the heat of summer makes it difficult for employees to wear heavy equipment. This can cause them to make numerous adjustments when they are in dangerous situations. Make sure employees have light weight harnesses and are wearing them as instructed. The best PPE in the world is useless if the employees refuse to wear them properly. Similarly, it is very important to test equipment one to two times a day to ensure it is functioning properly.

Proper ladder erection and maintenance is critical for working safely at height. The recommended angle a ladder should be erected is 75 degrees. New applications such as Niosh Ladder Safety or Angel Inclination can be utilized to ensure measurements are accurate. Regular jobsite walkthroughs and inspections are also important for scaffolding. It can be fairly common that other trade contractors move or alter existing scaffolding. From day to day, objects such as connections, planks, and railing can be moved by unknown jobsite visitors and can create new fall exposures. How your safety coordinator and/or superintendents inspect and re-inspect scaffolding can literally save lives.

Turning Safe Practices into Savings

We have shared a few key tips on managing risk at height. As you design (or re-design) your fall protection program, consider how effectively your insurance broker is translating this information to the underwriters involved with your account’s renewal.

• Are they clearly translating how your company mitigates risk at height? 

• Are they sharing key details that might separate you from another competitor?

• Are they using this information to leverage competitive pricing with multiple insurance companies?

• What does their information actually look like when it is sent out to an underwriter?

If these questions and this information are new to your organization, consider Rancho Mesa as an alternative. We can provide resources that can fully develop Fall Protection programs, training that can make your program actionable, and a partnership that ultimately builds the lowest cost of risk possible.

For additional information, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

Reporting Serious Workers’ Compensation Injuries

Author, Jim Malone, Workers’ CompensationClaims Advocate, Rancho Mesa Insurance Services, Inc.

Workers’ Compensation injuries occur every day. The majority of these injuries are minor incidents which require no medical treatment or loss of time from work. For others, the injury is reported to the insurance carrier, the injury is addressed, forms are provided, and the recovery from the injury is monitored until the employee is released back to work and a discharge from care is provided.

However, serious injuries, illnesses or even deaths occasionally occur at work because of a work related accident. These incidents usually require 911 calls, hospitalizations, emergency surgeries, family contact, and a longer road to recovery. They may also require immediate (within 8-24 hours) reporting to the California Occupational Safety and Health Administration (Cal/OSHA), if they meet the criterion that has been established.

As defined in the California Code of Regulations Title 8 §330(h), serious injury or illness means any injury or illness occurring in a place of employment, or in connection with any employment that:

1. Requires inpatient hospitalization for a period in excess of 24 hours for other than medical observation.

2. Results in a loss of any member of the body.

3. Results in a serious degree of permanent disfigurement.

4. Results in the death of the employee.

Does not include any injury, illness, or death caused by the commission of a Penal Code violation, except the violation of Section 385 of the Penal Code, or an accident on a public street or highway.

The California Code of Regulations Title 8 §342(a) states, “every employer shall report immediately by telephone or telegraph to the nearest District Office of the Division of Occupational Safety & Health any serious injury or illness, or death, of an employee occurring in a place of employment or in connection with any employment. Immediate means as soon as practically possible but not longer than 8 hours after the employer knows or with diligent inquiry would have known of the serious injury or illness. If the employer can demonstrate that exigent circumstances exist, the time frame for the report may be made no longer than 24 hours after the incident.”

The 8-24 hour time frame begins when the employer knows, or “with diligent inquiry” would have known of the serious injury, illness, or death. The “employer” means someone in a management or supervisory capacity.

As with any injury or accident, it can be a difficult and confusing time for all those involved and affected. It may seem like many things need to be done all at once. That is, of course, impossible. So, prepare yourself now. Make a list of your responsibilities and important contact numbers before a serious injury or accident occurs.

The order in which you perform each of these responsibilities may differ, according to the type of injury or accident that occurs. However, you will still have your checklist and contact numbers ready to use to ensure you do not forget any particular step or obligation. This emergency list of telephone numbers may be your broker, safety/loss control specialist, claims administrator, or workers’ compensation claims advocate. We are all available to provide you with any assistance you may need.

For those in California, the Cal/OSHA District Office contact list is below. Ask for the officer of the day.

Concord (925) 602-6517
Oakland (510) 622-2916
San Francisco (415) 972-8670

Cal/OSHA Link: www.dir.ca.gov/title8/342.html

For additional information, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

How Credit-Based Bond Programs Benefit New Contractors

Author, Andy Roberts, Account Executive, Surety Division, Rancho Mesa Insurance Services, Inc.

For small or new contractors that are looking to break into the world of government contract work, the process of getting a surety bond program in place can seem like an onerous one. It requires the contractor to compile a lot of paperwork and detailed financial reports, which can be a daunting task for any contractor, regardless of size or experience. However, there are now several “A” rated sureties that provide credit-based programs for writing smaller bonds.

The owner or owners will provide their financial information via a one or two page application, often referred to as a “fast track application.” These let you and your company apply for smaller bonds, usually $500,000 or less, depending on the surety, without requiring all the typical underwriting information that is needed to put together a formal surety program. And, so long as the owner(s) credit is good, the surety will approve the bond(s) to be issued.

These programs are great for contractors that don’t bond very often or contractors that are just starting to bid on bonded jobs. In addition, these programs also provide the contractor an opportunity to begin a relationship with a surety company, which will be very beneficial as the contractor grows and begins to bid larger bonded jobs that fall outside of the credit program, and will require a formal program with the surety.

If you have additional questions or would like to explore all the different options that each surety offers, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0166.

3 Key Differences Between Self-Insured Retention and Deductibles

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

Every business or non-profit that purchases a form of liability insurance has seen the term deductible or self-insured retention (SIR). While many know the difference between the two, many do not. Deductibles and SIRs, while quite different, are both designed to keep your premiums down. Insurers are willing to reduce the premium on policies, which have a deductible or SIR, because the insured assumes some of the risk. This however, is where the similarities end.

Below are the three key differences between self-insured retention and deductibles:

1. With a deductible, the insured notifies the insurer when there is a claim. The insurer provides immediate defense, pays for any losses incurred and then collects reimbursement from the policyholder after the claims is closed, up to the deductible amount. Under an SIR, the insured is still required to notify the insurer of any claim. The insured will immediately begin to make payments on that claim until the SIR is satisfied. At that point, the insurer will take over.

2. Deductibles erode the limit of your insurance policy, while SIR(s) do not. Let’s assume you have a standard $1 million policy limit with a $50,000 deductible. In the event of a loss, the insurer will be responsible for $950,000, since the insured is required to reimburse the insurer for the full deductible amount. Under the SIR, the insured is immediately responsible for the first $50,000 of any one claim, and the insurance company is responsible for the full $1 million limit.

3. Large deductibles often require that the insured provide a letter of credit or some other acceptable form of collateral to cover expected losses that occur within the deductible. With SIR(s), the insurer has no responsibility for paying losses until the SIR is exhausted; therefore, no collateral is required.

When reviewing your coverages and limits, if you see the terms ‘self-insured retention’ and/or ‘deductible’ please understand the terms may seem interchangeable, but there are major differences. Please contact Rancho Mesa at (619) 937-0164 with any further questions.

Developing an Effective Injury and Illness Prevention Program (IIPP)

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

If you have operated a business in the state of California for any period of time, you have very likely heard about or run across the acronym IIPP. Wherever you stand with your knowledge within the world of safety, injury, and illness, it is important for every organization to understand the mandatory parts of an IIPP. What is often overlooked is how developing an effective safety program can create positive change and truly impact your bottom line.

What is an IIPP?

An Injury and Illness Prevention Program (IIPP) is a required written workplace safety document that must be maintained by California employers (Title 8 of the CA code of regulations, section 3203). These regulations require eight (8) specific elements that are summarized below. In many cases, this process requires direct questions about how the company currently views and manages safety. Answering these questions will begin to highlight the positive aspects of what already is currently in place and shed light on areas that need improvement.

Responsibility

Clarifying the name, title and contact information for the person(s) with overall responsibility for the IIPP is a critical first step to this process. Making the IIPP available and accessible at all business locations becomes the first task of the “responsible person.”

Compliance

What is the content of the company’s safety meetings? Who runs those meetings? How do you discipline employees if they do not follow safety guidelines? How might the company recognize or reward their employees for safe practices or behavior?

Communication

Safety meetings are held on what type of schedule within your organization? How can employees anonymously notify management of safety and health concerns without fear of reprisal? Is there a safety committee in place that provides communication to all employees? If not, who would be considered as important members of that committee?

Hazard Assessment

Who within the company is responsible for periodic inspections to identify and evaluate workplace hazards? Provide detail on this schedule along with accompanying documentation that these visits occurred. Continuously communicating with employees for feedback and constantly reviewing hazards on a jobsite or within the workplace are crucial. Lastly, does the company use a standard or tailored JHA (Job Hazard Analysis) checklist to accomplish this? Re-visiting these checklists regularly as exposures change is critical to reducing claim frequency.

Accident/Exposure Investigation

Post-accident, who is the name of the person within the organization responsible for conducting those investigations? What type of form or checklist are you using to establish “root causes” of the accident or injury? And, back to the compliance section, what type of discipline could be handed down in the event of employee error that causes an accident or injury?

Hazard Correction

After the company has identified the hazard and determined exactly how and why an incident occurred, the IIPP must provide detail on how the company will correct the problem from happening again. One solid first step can include a review of Personal Protective Equipment (PPE) use. That is, did the equipment being used cause the accident or injury and, if yes, why? Answering the\is question may show that the piece of equipment was not appropriate for the task, or the item was defective or too old, which caused failure.

Training and Instruction

Ongoing and job specific training and instruction are really the lifeblood of any truly effective IIPP. Presenting the information in a clear, concise format that is easily understood is often the most difficult task in this process. Yet, it remains perhaps the most important as it is vital that employees are continually educated and RETAIN their instruction. Peeling back this process with managers, foreman, superintendents, etc. and learning specifically how the training is being disseminated, allows for a true baseline to be established.

Recordkeeping

Document, document, document! While establishing a written version of the IIPP might be the first step, and revising/editing on an annual basis is recommended, having the proper documentation that accompanies each section is just as important. This provides the responsible person(s) an important tool to continually compare the company’s actions, trainings, assessments and prevention techniques with the available documentation.

Can An Effective IIPP Impact my Bottom Line?

Building an effective IIPP means that the document represents a part of the company’s culture. For it to be meaningful and have a real impact on reducing workplace injuries and illnesses, it must reflect what your company is actually doing on a day to day basis. As the company’s ownership ties this into the overall business, building the IIPP from the ground up into a living, breathing document has measurable impact on controllable costs like workers’ compensation. Reducing frequency of injury can help lower the experience modification, improve the loss ratio, and establish a solid risk profile in the insurance marketplace. Having the supporting documentation along with specific examples of forms, checklists and assessments can arm an insurance broker with the tools they need in the marketplace. More specifically, this information provides a broker important leverage points when negotiating the most competitive terms possible for the employer with the insurance carrier’s underwriter. Those points can lead directly to premium savings, which leads to healthier margins and stronger profitability. Build the IIPP because it is a CA state requirement and it is the right thing to do. But, believe that building a first class safety program will absolutely lower your long-term insurance costs.

For a sample IIPP, visit the Risk Management Center or contact Alyssa Burley at (619) 438-6869.

Six Reasons for Promptly Reporting a Workers’ Compensation Claim

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

Reporting workers’ compensation claims in a timely manner can have a huge impact on the severity of the claim. Some policyholders believe the practice of not reporting employee injuries early is a good business practice. This could not be further from the truth. Below are six reasons why reporting claims early can reduce the overall impact of a claim on an employer’s insurance premiums:

1. Lowers the cost of a claim – The cost of a claim gets higher and higher for each day it is not reported. Claims reported after 30 days of the injury on average cost 30% more than those reported right away.

2. Ensures that key evidence is secured – The prompt reporting of a claim allows the claims adjuster to ensure key evidence is preserved. It also ensures that the supervisor’s accident report and witness statements are taken while things are still fresh in their minds.

3. Potential hazards are identified as early as possible – When an injury or near miss occurs, there should be an accident investigation completed to find out the root cause of the injury. Identifying the cause or potential hazard will reduce the likelihood of a similar claim from occurring in the future. It can also be useful as a training topic during safety-related meetings.

4. Could identify “red flags” for fraud – It is very important to understand that an insurance company only has 90 days from the employer’s (or their management or supervisors) date of knowledge to accept or deny a claim. If the claim is reported late, it leaves the adjuster little time to investigate the validity of a claim, which might force them to accept it. If the claim is reported 90 or more days after the date of knowledge, the adjuster has no choice but to accept the claim. The impact of a fraudulent claim can have a significant effect on future workers’ compensation pricing.

5. Reduces litigation – When an injury claim is not reported in a timely manner by the employer, it can make the injured employee feel neglected or disgruntled. Reporting the claim early, showing compassion towards the employee, and keeping the lines of communication open will significantly reduce the likelihood of a litigated claim. Employees need to feel they are going to be taken care of medically and still have a job at the company. Employees are more likely to hire an attorney when they feel uneasy about their job security or they are not receiving proper treatment. When a claim becomes litigated, it typically prolongs the time it takes to close the claim and increases the cost by an average of 30%.

6. Untreated medical only injuries could develop into indemnity claims – A small percentage of medical only claims can turn into indemnity claims as a result of unforeseen complications. For example, if an employee has a small metal shard stuck in their finger and chooses not to receive treatment, the finger could become infected, require surgery, and ultimately cause nerve damage. Had this injury been properly treated from the beginning, it likely would have simply been a first aid claim. Early treatment is key to minimizing indemnity claims.

Quickly reporting claims is simply one risk management strategy to controlling a business’s insurance costs. To discuss this strategy and others please feel free to contact Rancho Mesa Insurance at 619-937-0174.

15 Tips for Reducing Exposures When Performing Median Work

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Many city contracts and some residential communities will call for landscape contractors to install, maintain, or remodel road dividing medians. The potential risk for injury that can occur due to this exposure is highly severe. If your operations include any percentage of median work, then be sure to understand this increases your overall risk profile and slides the operations needle towards “heavy” in class.

Are you going above and beyond to prevent injuries from occurring as a result of your median work? Here are some quick safety tips you can implement today to better protect your employees from median work related injuries:

1. Eliminate median work when possible. This is the quickest way to completely separate employees from the exposure.

2. Consider the time of day as it relates to visibility and traffic for both vehicles and pedestrians.

3. Employee familiarity

4. Proper signage and cones

5. Is someone on staff trained as a competent traffic control person?

6. Has a Job Hazard Analysis been completed before work begins?

7. High visibility clothing (vests or shirts)

8. Employees should face oncoming traffic as much as possible when working in / near a street.

9. Ensure work zone buffer space is great enough to provide adequate recovery area for errant vehicles.

10. What is escape route in case a vehicle crosses into the work zone?

11. Communicate the importance of maintaining an escape route with project managers and landscaper crews.

12. Make modifications to temporary traffic control, if necessary.

13. Do not park vehicles in the buffer space.

14. Be aware of pedestrian traffic near work site. Is there a clear path for pedestrians to travel safely, including those with mobility issues such as the elderly or disabled?

15. Ensure a Heat Illness Prevention plan is in place during hot months.

Note, these are only suggestions and all may not apply to your particular exposure. Consult with a safety specialist for proper training and work site safety procedures.

For questions about how median work can affect a company’s risk profile, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

California SB 1343 Expands Sexual Harassment Training Requirements

Editor’s Note: This article was originally published on November 15, 2018 and has been updated for accuracy on September 12, 2019.

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc,

On September 30, 2018, California Governor Jerry Brown, approved Senate Bill 1343 (SB 1343), which expands rules for required sexual harassment prevention training for businesses.

According to the passing of Senate Bill 778, approved on August 30, 2019, by January 1, 2021, employers with 5 more employees must provide at least 2 hours of sexual harassment prevention training and at least 1 hour of training to non-supervisory employees every 2 years.

The bill requires “the Department of Fair Employment and Housing (DFEH) to develop or obtain 1-hour and 2-hour online training courses on the prevention of sexual harassment in the workplace, as specified, and to post the courses on the department’s Internet Web site. The bill also requires the department to make existing informational posters and fact sheets, as well as the online training courses regarding sexual harassment prevention, available to employers and to members of the public in specified alternate languages on the department’s Internet Web site.” However, the DFEH currently does not have the required training materials available, as of yet.

Rancho Mesa offers free Anti-Harassment training to all of its clients’ supervisors and employees throughout the country in response to California’s Senate Bill 1343 (SB 1343) and Senate Bill 1300 (SB 1300). The deadline for this training is January 1, 2021, according to Senate Bill 778.

Until the DFEH releases its supervisor and employee sexual harassment prevention trainings, Rancho Mesa recommends devising a training schedule/plan for your supervisors and employees in order to meet the January 1, 2021 deadline.

Resources:
legislature.ca.gov: SB-1343 Employers: sexual harassment training: requirements
legislature.ca.gov: SB-778 Employers: sexual harassment training: requirements

For questions about this training requirement or to learn how to enroll your supervisors and employees, register for the “How to Enroll Supervisors and Employees in the Online Anti-Harassment Training” webinar or contact Rancho Mesa’s Client Services Department at (619) 438-6869.

California Insurance Commissioner Announces Rate Cuts for 2019

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

California employers received some great news regarding their Workers Compensation premiums for 2019. On November 6, 2018, Insurance Commissioner Dave Jones recently announced his decision to cut California Workers’ Compensation advisory pure premium rates by 8.4% significantly higher than the initial recommended 4.5%. This change will affect policies that renew or incept on or after January 1, 2019.

To learn more about how this decrease will affect your company’s workers’ compensation premium in 2019, contact Rancho Mesa Insurance Services at (619) 937-0164.

What is a Surety Bondability Letter?

Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.

When an owner or general contractor is looking to pre-qualify a contractor for a specific project, they will often request the contractor to submit a bondability letter from their bond agent. The bondability letter provides the owner with an assurance that the contractor has been underwritten and approved by a surety company for support of a specific project. The bondability letter is issued for no cost (it is regarded as a standard service provided by the bond agent).

The typical bondability letter contains the following information:

a.) How long the bond company has been providing bonding for the contractor,

b.) The A.M. Best rating of the bond company (typically required to be “A” or above),

c.) Confirms that the bond company is on the U.S. Treasury approved list, and that the bond company is licensed in the state where the work is to be performed,

d.) Provides the single and aggregate bond limits that the bond company will support the contractor,

e.) Includes contact information of the bond agent for follow-up if the owner or general contractor has additional questions.

Although the bondability letter is non-binding and does not provide the same assurance that a bid, performance, or payment bond would provide, it is still a useful pre-qualification tool that does not require the contractor to spend any money.

If you are looking for an inexpensive way to pre-qualify your company with an owner, work with a Rancho Mesa Insurance for assistance with a bond program.

Cal/OSHA Issues Electronic Filing Requirement For 2017 OSHA 300A Form

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

In April 2018, federal OSHA announced all affected employers are required to submit injury and illness data (i.e., Form 300A data) via the Injury Tracking Application (ITA) online portal by July 1, 2018, even if the employer is covered by a state plan like those in California, Maryland, Minnesota, South Carolina, Utah, Washington or Wyoming.

Cal/OSHA then issued a statement in May 2018, advising affected employers “to comply with federal OSHA’s directive to provide Form 300A data covering calendar year 2017," even though it was not a Cal/OSHA requirement.

“On November 1, 2018,” according to the Cal/OSHA website, “the Office of Administrative Law approved the emergency action. This means that the employers in California described below are now required to submit Form 300A data covering calendar year 2017 by December 31, 2018. These employers should follow the instructions posted at federal OSHA's ITA website:

Check Appendix H for your industry. It includes industries like: Construction; Community/Nursing/Residential Care facilities; Community Food/Housing Relief Services; and many more.

• All employers with 250 or more employees, unless specifically exempted by section 14300.2 of title 8 of the California Code of Regulations

• Employers with 20 to 249 employees in the specific industries listed in Appendix H of the emergency regulations.”

This emergency action by the Office of Administrative Law brings Cal/OSHA’s requirements up to the federal OSHA’s minimum standards, with one difference. Federal OSHA required affected employers covered by state plans to submit the 2017 Form 300A data electronically by July 1, 2018, while this new action requires affected California employers to submit the data by December 31, 2018.

Since the Federal OSHA deadline has already passed, it is recommended that all affected employers in California who have not already submitted the 2017 Form 300A data via the ITA, submit it as soon as possible, but no later than December 31, 2018.

Next year, the deadline for electronically submitting 2018 Form 300A data will be March 2, 2019.

Rancho Mesa has put together a 9-minute tutorial video on how to generate the electronic Form 300A data file from the Risk Management Center, that can be uploaded to the ITA website for reporting the data.

For questions about how to track the injury and illness data in the Risk Management Center, contact Alyssa Burley at (619) 438-6869.

Benefits of using GPS Tracking Devices for Automobile Fleets

Global Positioning System (GPS) tracking devices have become a popular topic with employers who maintain vehicle fleets. The companies want to know what the advantages are of having these devices installed on their fleet vehicles and will it reduce their insurance costs.

The short answer is yes. Some insurance carriers provide a credit for having GPS systems installed on vehicles. Others may include a discount in their overall assessment of the company’s risk profile. Taking a proactive stance will be noticed by a carrier and taken into account.

The most important element of having GPS tracking is what the company does with the information received. It’s not enough to just install the device. The information generated should be used to promote corrective and preventative action within the organization. Rancho Mesa suggests organizations provide trainings, periodic ride-a-longs by a supervisor, and implement some kind of corrective behavior should the GPS show unfavorable driving behavior such as speeding or taking a less favorable route.

Other Benefits

Rancho Mesa clients have experienced indirect, sometimes unexpected, benefits from implementing a GPS System. These benefits include decreased fuel and labor costs, and ultimately more efficiency. Knowing the routes are being tracked can lead to a greater sense of accountability from employees as to what routes they are taking and how long they are spending on each trip. It can also allow decision makers to properly direct service calls to the right technician knowing who is in the vicinity.

For more information about the benefits of using a GPS system to lower insurance costs, contact Rancho Mesa Insurance Services at (619) 937-0164.

Important Reminder for Janitorial Business Owners: Property Service Worker Protection Act

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

A few of my janitorial clients have recently asked for information on the Property Service Worker Protection Act (AB 1978) and its requirements. Below is a description of the law and instructions on registering. As a reminder, the deadline for all janitorial service providers to register for the Property Service Worker Protection Act was October 1, 2018. If you have not yet registered, I would recommend doing so, as soon as possible.

 AB 1978 is a law to protect janitors against wage theft and sexual harassment. The law is designed to move the janitorial industry into a modern and transparent industry. There are three main legal mechanisms: record keeping, registration with the Labor Commissioner’s Office, and sexual harassment prevention training.

Recordkeeping

Every employer must keep the following accurate records for three years, showing all of the following:

• The names and addresses of all employees who perform janitorial or cleaning services.

• The hours worked daily by each employee, including the start and stop times of each work period.

• The wage and hourly rate paid each payroll period.

• The age of all minor employees.

• Any other conditions of employment.

Registration

Every employer who provides janitorial services with a least one employee and one janitor must register with the Labor Commission. An “employer” is broadly defined as any person or entity that employs at least one employee and one or more covered workers and that enters into contracts, subcontracts, or franchise arrangements to provide janitorial services must register yearly with the Labor Commissioner’s office.

To register, an employer must pay a $500 nonrefundable application fee. The registration is valid for one year and must be renewed annually by the month and day of the original registration’s issuance. The renewal fee is also $500. A janitorial employer who fails to register is subject to a civil fine of $100 for each calendar day that the employer is unregistered, not to exceed $10,000.

The documents required to register include:

• Fictitious Business Name Statement(s) (doing business as (DBA) for all business name(s) you use or intend to use.

• State Employer Identification Number (SEIN) or application for it.

• Federal Employer Identification Number (FEIN) or application for it.

• Articles of Incorporation, if you are a corporation.

• Articles of Organization, if you are a limited liability company (LLC).

• Certificate of Limited Partnership, if you are a limited partnership.

• Secretary of State Statement of Information, if you are a corporation or LLC.

• Proof of workers’ compensation coverage via one of the following:

  • A valid workers’ compensation insurance certificate which must include the complete and correct name of the legal entity that is the insured employer, including fictitious business names and the complete and correct address for each location.

  • Certificate of authority to self-insure.

  • If contracting with an employee leasing company, a current workers’ compensation insurance certificate that is provided to you by the employee leasing company.

Sexual Harassment Prevention Training

The Property Service Workers Protection Act requires janitorial services employers to provide training in the prevention of sexual violence and harassment at least once every two years.

 Until the training requirements are established pursuant to Labor Code section 1429.5, employers may meet this obligation by giving employees the Department of Fair Employment and Housing pamphlet DFEH–185, “Sexual Harassment,” in English or Spanish, as appropriate.

 Rancho Mesa clients have access to discounted Sexual Harassment Prevention training online in both English and Spanish through the Risk Management Center. Contact Alyssa Burley at (619) 438-6869 for more information.

 For more information about the Property Service Workers Protection Act, visit the Department of Industrial Relations website.

How Warranty Periods Can Impact Bonding

Author, Andy Roberts, Account Executive, Surety, Rancho Mesa Insurance Services, Inc.

When we review contracts that require bonding, one area that we need to understand is the warranty obligation. I would expect that over 90% of the contracts that we review for our contractor clients contain a standard one-year warranty term. Since Performance & Payment Bonds respond to the contract, the surety company is also on the hook for this one-year obligation. Premium rates for bonding already include the cost for this one-year warranty in the cost of the performance & payment bond.

What if the warranty period exceeds 12 months?

Depending on the warranty wording of the contract, both the contractor and the surety company can be liable for multiple years of warranty obligation. Anytime that the warranty is going to exceed one year, the surety will charge additional rate for each extra year, which increases the cost of the bond, thereby increasing costs for the principle and ultimately the obligee or owner. Second, and most importantly, increased warranty periods could make it more difficult for a contractor to qualify for a bond for that specific job. The longer the warranty period that the bond will be covering, the longer the surety has to try and project how a contractor or company will be doing at that time. Since they have no real way of doing this, it increases their liability for that particular job and could ultimately lead to a declination for the bond.

One option to consider - for a warranty period of longer than one year (but not specifically stated if the bond will respond to the longer warranty period), the contractor should ask for clarification from the obligee for a couple of different reasons. The owner may confirm that the bond does not have to cover the warranty after the initial one-year period. This will make it easier for the contractor to obtain the bond, because the surety will not be required to respond to a warranty claim several years after a job has been completed. It should be noted that this does not mean the contractor is not bound by the full warranty length stated in the contract.

If your company is interested in working on jobs that require bonding, or you are a contractor with an established surety program but have questions about warranty periods, please contact me at Rancho Mesa Insurance Services 619-937-0164 as I can assist with any questions you may have.

Distracted Driving, Not Just an Automobile Insurance Issue, Bad News for Workers Compensation Too

Author, David J Garcia, A.A.I, CRIS, President, Rancho Mesa Insurance Services, Inc.

I’ve written at length on the negative effects distracted driving is having on the automobile insurance industry and its impact on the rise in accidents, claim costs, and increases to your automobile premiums. But, have you considered its effects on your Experience Modification Rate (EMR) and ultimately workers’ compensation cost?

When one of your employees is injured in an automobile accident while working on your behalf, Arising out of Employment (AOE) / Course of Employment(COE) their sustained injury will be covered by your workers’ compensation policy, regardless of fault.

“Regardless of fault?!”

When a third party is deemed at fault and the injuries to your employee(s) have been settled, your workers’ compensation insurance carrier may “subrogate” their costs to the carrier representing the at fault driver. Now, here is the realty – studies have shown that 14.7% (4.1 million) of all California drivers are uninsured, while another large percentage of drivers hold the California minimum limits of $15,000/$30,000. What this means is that even if subrogation is a possibility, the likelihood of a “full” recovery is not probable. Thus, all the costs of the injury to your employee(s) will likely be the sole responsibility of your workers’ compensation carrier and this claim cost negatively affects your EMR and loss ratios for years to come.

What can you do?

You can implement a strong fleet safety program that includes a policy pertaining to distracted driving. When your employee is involved in a motor vehicle accident, adherence to your company’s accident investigation protocol is crucial. Documentation will prove pivotal for your carrier if subrogation becomes a possibility.

For our clients, through RM365 Advantage, we have a number of resources: fleet safety programs that can be customized, fleet safety training topics, fillable and printable accident investigation forms, archived fleet safety workshop videos, and more, in both English and Spanish. You can access this through our RM365 Advantage Risk Management Center or contact our Client Services Coordinator Alyssa Burley at aburley@ranchomesa.com.

If you are not a current client of Rancho Mesa, we encourage you to reach out to your broker for assistance or email Alyssa Burley to get additional information or to ask any questions.

Fleet Safety: Four Steps to Effective-Driver Selection

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

Driver selection guidelines are one of the most important things a company can implement to prevent vehicle accidents. A company should manage a written Motor Vehicle Records (MVR’s) program to assure that they are selecting the right employees to drive for the company and annually qualify each driver for desirable driving records. The following are some “best practices” guidelines that will help businesses implement and improve the driver selection process.

Step 1: Determine who drives for the company.

The first thing a business must do to control driver selections is knowing who is driving on behalf of the company. Most companies have drivers that fall into several categories:

1. Non-employees operating company vehicles

2. Drivers of vehicles owned or leased by the company

3. Drivers with a Commercial Drivers License (CDL)

4. Employees driving their own vehicle for company business

Step 2: Establish specific requirements depending on whose is driving.

For all employees, regardless if they are operating a company owned or leased vehicle, the company must:

1. Verify the person has a valid Driver License.

2. Determine that the license is appropriate for the type of vehicle they will be operating.

3. Request a copy of their Motor Vehicle Record (MVR) and compare it to the acceptable criteria before they drive for the company, and again on an annual basis.

For drivers of vehicles owned or leased by the company, it is wise to ask for a:

1. Completed written application that includes a section that lists all driving violations and/or accidents within the last 3 years.

2. Substance abuse test (optional).

For drivers with a Commercial Driver License:

1. Conduct a Department of Transportation (DOT) physical examination.

2. Create a driver qualification file for each driver that complies with DOT.

3. Conduct a drug test for each driver, following DOT regulations (pre-hire, random, post-accident and suspension).

For employees using their own vehicles for company business:

1. Require proof of insurance.

2. Establish minimum personal limits of insurance. Rancho Mesa recommends a minimum of $100,000/$300,000/$100,000.

Step 3: Establish MVR Qualification Process

Managing the driver selection and ongoing qualification process is the employer’s responsibility. There is a broad range of driving violations that can be classified into two major categories “A” and “B.”

Category “A” would include driving under the influence of drugs, refusing to take a substance test, reckless/careless driving, speeding in excess of 14mph over the posted speed limit, texting, hit and run, speeding in a school zone, racing, driving with a suspended or revoked license, vehicular assault etc.

Category “B” would include, speeding 1-14 mph over posted speed limit, improper lane change, failure to yield, failure to obey traffic signal or sign, accidents, having a license suspended in the past for moving violations, etc.

Best practices for MVR qualifications include:

• Anyone with a type “A” driving violation in the last five years is undesirable for a driving position.

• Anyone with three or more type “B” violations, or two or more at fault accidents in a three-year period, is undesirable for a driving position.

• Anyone with two type “B” moving violations, or one driving accident in the last three-year period, should be put on warning and MVR’s reviewed semi-annually.

In addition to the initial MVR check upon hire, all employees who routinely drive their personal vehicle on company business should have their MVR screened at least once every 12 months to ensure their driving record remains acceptable.

Step 4. Enroll all employees in the DMV Pull Notice Program.

For a nominal annual fee, employers can enroll in the Department of Motor Vehicles' Pull Notice Program. This service provides employers with a notice of any moving violations within 24 hours. So, an employer will know right away if one of their drivers' records has changed. Not participating in the program makes the company vulnerable to going months with an unqualified driver before an annual MVR review is completed.

Following these best practices for effective driver selection takes the guest-work out of determining who should drive for a company. Following these four steps can help ensure the company has qualified drivers at all times.

For questions about driver selection, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

Focus on preventing Back Injuries: Introducing Rancho Mesa’s A.B.L.E Lift Protocol and the “Field” Mobility & Stretch Program

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services.

Mobility & Stretch Program and ABLE Lift Protocol flyers.

Physical work is demanding on our bodies. As the employer, what are you doing to help your employees prepare for the day’s work? Collectively, the most severe injuries come from the lower back by way of strain or sprain as a result of lifting. It’s not always the heavier objects causing the injuries. In many cases, early morning “light” lifts or movements can quickly cause a strain or sprain. Eliminating lifting exposures is the ultimate solution to limiting back strains; however, it is not always possible. Interactively training your employees to accurately lift material with proper technique is a preventive approach you can implement today to limit your businesses lifting exposure.

Following the success of our “Truck” Mobility and Stretch Program, Rancho Mesa is excited to announce, in conjunction with Collin Dawson CPT., A.B.L.E. “Lift” Protocol to help physically train your employees to execute proper lift decision making and establish the correct physical eliminates it takes to perform a lift. Not all lifts are the same, each one contains different variables, but the same simple body positioning and lift techniques are relevant no matter the exposure.

Our “Truck” Mobility and Stretch Program was highly received and ultimately implemented by many of our clients. Over the past nine months we have worked to address the need for a Mobility and Stretch Program to be lower back specific, but with the ability to perform the exercises without the support of a truck or wall.

We knew the Mobility and Stretch Program would be beneficial. We were surprised to see the amount of clients willing to incorporate this program and ultimately are very pleased with the results, almost one year in. We challenged Collin to create another program that could be performed in a group setting without sacrificing the main purpose of the routine, which is to flex and strengthen the core muscles surrounding the back while providing total body activation. Our “Field” Mobility and Stretch Program does just that, but also provides some opportunity for participants to slowly begin to establish a better center of balance and body awareness, which can be practically applied to the work day and life. We hope this program will be just as well received.

Register for October 25, 2018 webinar where we will detail A.B.L.E. Lift and the recently developed “Field” Mobility and Stretch Program. Only those who attend the webinar will receive the following:

• A PDF Mobility and Stretch Program branded to your company (upon request, 10-15 business days to process) “Truck” and “Field” Series

• PDF version of A.B.L.E. Lift (8.5x11 and Poster Size)

• Recognition on Rancho Mesa website for your participation in the workshop

• 30-minute complimentary phone assessment with Collin Dawson about these programs and further implementation strategies.

And remember, “Only lift if you are A.B.L.E.”!

Changes in the 2019 Experience Modification Formula – Are You Ready? (Part 2)

Author, David J. Garcia, A.A.I, CRIS, President, Rancho Mesa Insurance Services, Inc.

As we approach 2019, there will be several changes in the experience modification formula that directly affects the calculation of an employer's 2019 Experience Modification Rate (EMR).

Part 1 of this article describes the Primary Threshold and Expected Loss Rate. Read Part 1 of this article. Part 2 provides an overview of the changes to the EMR calculation. 

The Simplified Formula

Individual claim cost (i.e., both paid and reserved) will go into the calculation up to the primary threshold limit are considered the actual primary losses. Any claim cost that exceeds your primary threshold is considered the actual excess loss. In past experience mod formulas, the actual excess loss was used in the factoring of your EMR; in 2019, it will have no effect. However, under the new calculation, the industry expected excess losses will be considered in the 2019 simplified formula.

Actual Primary Losses + Expected Excess Losses / Expected Losses  

The expected excess losses are calculated by multiplying your class code’s payroll per $100 by the expected loss rate for that same class code. This number is then discounted by the “D Ratio” to determine expected primary losses and expected excess losses. There are 90 different D-Ratios for each classification based on the primary threshold. The D-Ratio is different for each classification and is determined by the severity of injuries that occur within that particular class code.

The first $250 of all claims will no longer be used in the calculation of your EMR.  

This is a major change and one that was initiated in part to encourage all employers to report all claims, including those deemed first aid, without having a negative impact on the companys’ EMR. This change will affect all claims within the 2019 calculation; so yes, it will include years previously completed and reported. This will have a positive impact on EMRs in that claim dollars will be removed from the EMR calculation. 

Confused – Want more details?

Help is on the way. We are going to hold a statewide webinar on Thursday, October 4th at 9:00am in order to dig deeper into this subject and answer specific questions. You may register for the webinar by contacting Alyssa Burley at (619) 438-6869 or aburley@ranchomesa.com.