OSHA Penalties Increase in 2020

Author, Lauren Stumpf, Media Communications Coordinator, Rancho Mesa Insurance Services, Inc.

On January 15, 2020 the Federal Register published the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2020. This final rule increases civil penalties the Department of Labor assesses including those issued by the Occupational Safety and Health Administration (OSHA) based on workplace inspections and potential violations of safety and health standards. The rule is effective January 15, 2020. Beginning January 16, 2020 OSHA civil penalties will increase.

The new 2020 maximum OSHA penalties are as follows:

• Serious violation: $13,494 (increased from $13,260)

• Other-than-Serious violation: $13,494 (increased from $13,260)

• Repeat violation: $134,937 (increased from $132,589)

• Willful violation: $134,937 (increased from $132,589)

• Each failure to correct the violation: $13,494 (increased from $13,260)

• Each posting requirement violation: $13,494 (increased from $13,260)

For more information about the OSHA Penalties, visit https://www.osha.gov/penalties.

Cal/OSHA Updates: AB 1804 Changes How Injuries and Illnesses Are Reported

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

As of January 1, 2020, California Assembly Bill 1804 (AB 1804) changed how an employer reports a serious employee injury or illness to Cal/OSHA. The bill removes the option to submit the report via email and replaces it with an “online mechanism,” according to Labor Code section 6409.1 (b). Reports may continue to be made via phone.

Until Cal/OSHA implements an online mechanism for collecting serious injury and illness reports like Fed/OSHA, emailed reports will be accepted. However, reports submitted by phone are always recommended over an emailed report. Reports submitted via phone or an online mechanism allows Cal/OSHA to ensure vital information is collected that is necessary to evaluate the seriousness of the injury or illness.  

Cal/OSHA has not provided an estimated implementation date for the online report submission option.

As a reminder, California employers are required to report serious injury or illness of employees immediately. Serious injuries or illnesses must be reported as soon as practically possible. Deaths must be reported within 8 hours. All other injuries or illnesses must be reported once the employer learns of or should have known of the serious injury or illness.

Work Comp Unit Stat: The Meeting That Saves You Money

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

California business owners are aware that their experience modifier (XMOD) is published annually, roughly three to four months before the expiration of their current workers compensation policy term. However, more often than not, companies are missing an incredible opportunity to make an impact on the calculation of their XMOD by strategically evaluating their work comp claims prior to the most critical month in the XMOD calendar known as Unit Stat.

The Workers’ Compensation Insurance Rating Bureau (WCIRB) defines the process of receiving loss and payroll information by classification as the Unit Statistical Report. The information is reported to the WCIRB by insurance carriers at specific intervals based on your company’s policy effective date. The information is valued for the first time 18 months after the inception of your policy and every 12 months thereafter. 

A policy that incepts in January 2020 will be valued for the first time in July of 2021 (18 month mark). This information will remain in your XMOD calculation for the valuations at 30 months and 42 months.

Once this information has been received by the WCIRB, from the respective carriers, it cannot be altered or changed until the following year’s unit stat. Thus, you may have a positive outcome on an existing open claim (reserve reduction or closure) but not see the benefit until the following year. Revisions to the XMOD once published are limited to a few circumstances; more information about revisions can be found here.

The loss information, sent to the WCIRB from the insurance carriers, will be evaluated at the paid (closed claim) or reserved (open claim) amounts. Typically, a claim that has been open for longer than 18 months signifies severity, litigation, lost time, permanent disability, or a combination of the group. For this reason it is absolutely critical that as a part of your risk management process you execute a
pre-unit stat meeting.

• When should I schedule my Unit Stat meeting?

• What should I do at this meeting?

• Who needs to be involved?

• How will this meeting save me money?

As a client of Rancho Mesa, we build this meeting into your annual service plan and take care of engaging the parties who need to be involved for the betterment of your XMOD. 

Ready to learn more about Unit Stat? Join us for a complimentary 25-minute webinar where we will discuss the process in greater detail and take time for Q&A.

Still not sure if further learning is necessary, ask yourself these questions:

• Have you ever been surprised by your XMOD being higher than you would have thought?

• Have you ever had an XMOD above 1.00?

• Has your XMOD ever caused your premium to increase?

The webinar can be viewed on-demand by clicking the link below.

It’s OSHA 300A Time

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

The holidays have come and gone and here we are at the end of another great year. Year-end means calendar updates, process changes and document reviews, as well as time to prepare for filing your OSHA 300A form. 

The OSHA 300A form is a summary of injuries and illnesses which occurred on the job during the calendar year. The form must be filed electronically on the Injury Track Application (ITA) starting January 2, 2020. Deadline for 2019 data submissions is March 2, 2020. It must be displayed from February 1, 2020 to April 30, 2020.

Don’t forget, if you are a Rancho Mesa client and utilize the Risk Management Center Incident Track feature, you have access to generate the Cal/OSHA 300A form and export it to a CSV file. From there you can upload it to the OSHA website.

Rancho Mesa has put together a 5-minute tutorial video on how to generate the electronic 300A form data file from the Risk Management Center, that can be uploaded to the Injury Tracking Application 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.

Generating Your Employee Handbook Is Easier Than Keeping a New Years Resolution

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

When business owners are asked if their employee handbooks are up to date, they typically shrug and say “It’s something we have been meaning to tackle.” It is hard to blame them when it often feels as though a newly revised employee handbook quickly requires an update due to changes in employment laws! There is a significant need for an easy to use option where employers can have an up to date handbook throughout the year and, have it generated at no cost. Rancho Mesa provides that solution.

As the California workplace climate changes, it is imperative that business owners have solutions before problems arise. Employee lawsuits against their employers are on the rise and Rancho Mesa clients must be prepared for the possible, if not inevitable. While updating an employee handbook can be one of the easiest obligations to neglect, skipping this task can have serious repercussions.

When laws and protocols change over time, it can be difficult making sure your employee handbook is up to date. Make sure it clearly communicates:

• What is expected of your employees.

• What are your company policies.

• What rules are in place.

At Rancho Mesa, we have taken the time to understand our clients’ needs and if there is a solution available, we try to accommodate. We provide a free option for our clients, to help them compose a compliant handbook that is:

• State and federal compliant.

• Handbook is fully customizable with optional policy update alerts. If a law were to change right after completing your handbook, you would receive an email with the change and have the option to add it to your handbook.

• Live HR support to assist with company specific question.

Please reach out to Alyssa Burley at aburley@ranchomesa.com with any questions you may have about the employee handbook builder option through the RM365 HRAdvantage™ portal. If you have any questions pertaining to your insurance needs, please call (619) 934-0164.

The Flu Isn’t the Only Bug You Need to Worry About

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

Target, Capital One, and Equifax are all Fortune 500 Companies and household names we recognize. All have experienced a cyber liability breach in the last decade. When we hear of a data breach, we typically think of large corporations or more recently municipalities that collect customers’ personal identification information or are using technology to manage physical locations (i.e. buildings), transit systems, and people. However, just about any large, medium or small organization that uses technology to operate their business faces a cyber-exposure. And, as technology becomes more complex and sophisticated, so do the threats we face, which is why every business and organization needs to be prepared with both cyber liability insurance and an effective cyber security plan to manage and mitigate cyber risk. Below are two different cyber threats your company faces on a daily basis.

Ransomware is a type of malware that prevents users from accessing their system or personal files and demands a ransom payment, typically in the form of Bitcoin, in order to unlock and regain access to your data.

Social Engineering is the fraudulent attempt to obtain sensitive information such as usernames, passwords and credit card details by disguising oneself as a trustworthy entity via e-mail. This is typically accomplished by directing users to enter personal information at a fake website which matches the look and feel of the legitimate website.

A Cyber Liability Policy can help protect against data breaches and other evolving cyber exposures that are not covered by a standard property and general liability policy. These policies can respond in multiple ways such as credit card data remediation and notifications expense, network and information security liability, regulatory defense expense, crisis management expenses and computer program and electronic data restoration expenses.

In addition to the coverages above, many cyber insurers offer policyholders pre-breach services, employee training and IT forensics specialists. Some also provide data breach “coaches” who specialize in the unique legal and regulatory issues surrounding breaches, and will assist businesses with navigating the response process and ensure compliance with state and federal privacy laws.

Please contact Rancho Mesa to learn more about implementing a strong Cyber Prevention Plan.

New Law Changes Which Injuries Must Be Reported

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

A new California law, Assembly Bill 1805 (AB 1805), changes when employers are required to report serious workplace injuries to the California Division of Occupational Safety and Health (Cal/OSHA). The law now broadens the scope of what will be classified as a serious illness, injury or exposure. Many believe this change will increase the number of workplace accidents that will have to be reported in 2020.

The definition of “serious injury or illness” has, for many years, been defined as an injury or illness that requires inpatient hospitalization for more than 24 hours of treatment, or if any employee suffers a “loss of member” or serious disfigurement. The definition has excluded hospitalizations for medical observation. Regulations also excluded from reporting requirements any serious injury caused by a criminal assault and battery or a vehicle accident on a public road or highway.

AB 1805 aligns California’s rules more closely with Federal OSHA regulations for reporting. More specifically:

Rules

The following will need to be reported to Cal/OSHA:

• Any inpatient hospitalization (even less than 24 hours),

• An inpatient hospitalization is required for something “other than medical observation or diagnostic testing,”

• Employers must report any “amputation” (even if the tip of a finger is cut off) to Cal/OSHA. This replaces the terminology “loss of member;”

• The loss of an eye,

• Serious injuries or deaths caused by a criminal assault and battery,

• The exclusion for injuries from auto accidents on a public street or highway remains in effect.  However, accidents that occur in a construction zone must now be reported.

Compliance (related directly to serious injuries and illnesses or fatalities)

In order to say in compliance:

• The report must be made within 8 hours of the employer knowing, or with “diligent inquiry” should have known, about the serious injury/illness.

• The report must be made by PHONE to the nearest Cal/OSHA district office.

For more details on how these changes may impact your company’s IIPP, please contact me at (619) 937-0172.

Autonomous Mowing – Are you Covered?

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

Autonomous lawn mowing is becoming more common in commercial and residential landscape management. As the market begins to adapt and utilize this technology it creates a very unfamiliar and unique exposure for you and your general liability carrier.

Commercial General Liability Policies should be written specific to your type of operations, including the coverages needed to protect your landscape company in the event of claim. The insurance marketplace has a general understanding of the common exposures that face a landscape contractor; from installation, to maintenance, and chemical application. Policies are written on the basis of annual sales or field payroll. When automated mowing is offered as a service from the contractor, the insurer would need to charge a premium to pick up the exposure. If the policy is written on a payroll basis then a direct premium will not be charged for the automated mowing operations, as there is no payroll associated with the mowers performance. The policy could also be written on a sales basis with clarification of estimated sales between autonomous mowing vs. the remainder of your operations to the insurance underwriter, so the appropriate rate can be charged. In either case, it is very important that the underwriting carrier has a clear understanding of your operations in order to determine the final pricing.

Whenever you have a change in your operations, such as the use of autonomous mowing, it is critical that you notify your insurer so they can properly assess the exposure and acknowledge that coverage would extend in the event of a claim.

Here are a few questions we use to help negotiate with the insurance marketplace when autonomous mowing is a part of the operations:

• How quickly will the blades disengage if the unit was picked up while moving?

• If the mower was to bump into someone/something will it divert the other way?

• What is the set back of the blades from the perimeter of the mower?

• How does it maintain its boundaries?

• Will it be left on site?

• What time of day will it run?

• How is it powered?

• Who has control of the mower while it is on?

• How can the mower be turned off?

Do not let the carrier find out about your autonomous mowing operations at audit, or worse at the time of a claim.

Finally, consider coverage for the machine itself if it were to be stolen, damaged, or totaled. Adding the mower to your Commercial Inland Marine policy will provide coverage for the equipment. The valuation of this coverage would be detailed in the policy. Be sure to communicate where the mowers will be stored while not in use and the security functions installed on the device to protect against theft.

For more information or questions you might have about this topic or landscape insurance in general please contact the Drew Garcia at (619) 937-0200.

Ensure You’re Not Under Covered and Overpaying for Auto Insurance

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

Auto insurance prices are continuously rising. What is the reason for this and what can be done to cut back on the cost? There are many factors that lead to the carriers needing to increase their rates. We are going to discuss exactly what some of the reasons for the increases are; and more importantly, what business owners can do to offset price increase as much as possible while receiving adequate coverage.

Distracted drivers are causing more claims every year. Repairing a vehicle has become more costly as newer models have technology features such as sensors and back-up cameras. People using their cell phones while driving can cause them to have a diminished reaction time, which is leading to more severe high impact accidents. This is pushing medical costs up at a rapid rate, leading to an increase of claims dollars. Implementing a “No Phones While in a Vehicle” policy could reduce claims drastically and keep your employees safe.

There are many ways that carriers can get out of covering a loss, and employees driving their vehicles to and from job sites can really come back to haunt you if they do not have adequate coverage limits. Make sure that you have Hired and Non-Owned Coverage! Hired and Non-Owned is the coverage needed for the carrier to cover losses on vehicles that are not on the company’s policy, such as rented or employee owned vehicles. Employers need to make sure that employees have adequate personal auto insurance limits. The California minimum coverage limits of $15,000/$30,000/$5,000 can get exhausted very quickly in a serious accident, and lawyers are getting very good at finding grey areas to drag the employer in. You should consider reimbursing your employees to offset the increase in premium for them. Some carriers will apply subjective credits to your company auto premium if they know your employees need to have higher limits to drive for you.

One of the biggest gaps that brokers see when they audit policies for prospects is they are using the wrong symbols, thinking they are covered for a claim, and end up not having correct coverage. Most reputable carriers will offer Symbol 1 for your liability insurance and it is imperative that you use Symbol 1 vs. Symbol 7. Symbol 7 only covers vehicles described in the declaration and leaves limited coverage for vehicles acquired after your policy begins.

Rancho Mesa Insurance Services is a National Best Practices Agency 13 years in a row. We strive to make sure that our clients are without gaps in their coverage. Call (619) 934-0164 to ask about Rancho Mesa’s proprietary programs that help maintain clients’ safety and get them the lowest premiums possible. Register here for the free Fleet Safety webinar to learn how to increase vehicle safety, control vehicle accidents, safeguard long-term profitability, and ensure that your fleet safety & accident prevention programs are up-to-date.

California Wildfires Distress Insurance Market

2018 saw the most destructive wildfire season ever recorded in California. Over 1.8 million acres were burned; 22,751 buildings were destroyed and over 100 lives perished. As a result, insurance claims have exceeded $12 billion and are expected to rise.

Many in the industry expect we are on the verge of a crisis and from what I’ve seen so far, I’d have to agree. The marketplace is in frenzy as carriers aren’t sure what their overall financial hit will be. Furthermore, catastrophic losses like this affect the reinsurance marketplace, which causes pressure downstream to insurers.

Below is a look at what we are seeing in the marketplace.

Non-Renewals

Most carriers are non-renewing their entire books of business who are at risk of wildfires. Even if the client has been with the carrier many years with no losses, they are simply non-renewing properties on accounts in certain areas prone to wildfire. This is essentially leaving the marketplace with very few players.

Significant Premium Increases

Those carriers still willing to write property accounts are hiking up premiums significantly. We’ve heard of increases 5-10 times the previous year’s premiums. We recently spoke to an insured in the Riverside area whose insurance premium went from $85,000 to $500,000 a year. 

Increased Deductibles for Wildfires

On top of the significant premium increases, most carriers are offering increased deductibles for wildfires. It’s not uncommon to now see $150,000, $250,000 and $500,000 deductibles depending on the value of the building(s).

What Can Business Owners Do?

Business owners need to act early and quickly. Speak with a broker to plan ahead because it looks like there will be a significant financial burden and risk (per increased deductible) moving forward. The marketplace is inundated with excessive submissions, so the need to submit as early as possible is imperative. There are alternative insurance programs that can act as a temporary solution while helping alleviate cost burdens. Some declinations can be avoided by proper abatement of brush and trees or installation of fire suppression systems. Regardless of when the insurance policy renews, I suggest getting started on this as soon as possible. The marketplace could take several years to stabilize. 

For help understanding how wildfires can affect your organization’s insurance premium, contact Rancho Mesa Insurance Services at (619) 937-0164.

Senate Bill 778 Extends Employee Anti-Harassment Training Deadline

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

Newly passed Senate Bill 778 (SB 778) extends the deadline set in Senate Bill 1343 for California’s mandatory Anti-Harassment Training from January 1, 2020 to January 1, 2021. The bill also addresses concerns about supervisory employees and clarifies when temporary workers must be trained. California Governor Newsom signed the bill into law on August 30, 2019, which included an urgency clause that allows the bill to go into effect immediately.

What SB 778 Means to CA Employers

The changes made by SB 778 not only extends the deadline for non-supervisory employee Anti-Harassment training, but also allows supervisory employees to stay on their existing two-year training schedule. For example, if a supervisory employee completed Anti-Harassment training in 2018, their next training, with the SB 1343 compliant content, will be due in 2020 - two years from their last training date, which is before the new deadline. Likewise, if a supervisory employee was trained in 2019, their next training due date will be in 2021.

Non-supervisory employees will need to complete their initial 1-hour Anti-Harassment training by January 1, 2021. For those who have already taken the training in 2019, we recommend they maintain their two-year schedule, and complete the training again in 2021.

Both supervisory and non-supervisory employees must be trained within six months of hire. However, temporary or seasonal workers who are hired for less than six months must be trained within 30 days of hire.

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.

3 Benefits to Working with an Insurance Specialist vs. Generalist

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

Most insurance agencies welcome any and all types of businesses, paying little attention to the type of business the prospect is running. These accommodating professionals will commit to quote virtually any person or business looking for insurance coverage. With this type of approach, inevitably the buyer will be working with a jack of all trades, but a master of none. Working at Rancho Mesa Insurance for nearly 16 years, I’ve learned the importance of focusing on a niche or vertical market, rather than attempting to write insurance for anything with a pulse. The two vertical markets I focus on are the janitorial and construction industries. Below are three reasons why I believe a business owner should consider working with a specialist rather than a generalist.

Avoid Gaps in Coverage:  

Having a trusted advisor that is a specialist in your industry can truly minimize potential gaps in coverage that otherwise might get overlooked by someone dabbling in your industry. Some examples include:

• Allowing an exclusion of coverage to a policy where the insured has exposure: Unfortunately I see this all too often when I audit a prospects policy. I once reviewed a residential general contractor’s (GC) insurance policy and found a subsidence exclusion. This posed a serious concern because the GC builds foundations. If they were ever served with a claim relating to a foundation sinking or failing, there would likely be no coverage. I’ve also seen residential GC’s who build new homes with a residential exclusion. It’s these types of errors that can put a business in tremendous jeopardy.    

• Missing key coverage’s to plug gaps in coverage: Most contractors are required to carry workers’ compensation and general liability insurances. However there are many exposures that a contractor has in their operations that would be excluded without additional coverage’s in place. One example is pollution liability. If a plumber installs a faucet that leaks over time, undetected, and causes mold or fungus to develop, you will likely run into a pollution liability claim for bodily injury and/or property damage. Most general liability policies have a pollution exclusion. Without the knowledge of placing a separate pollution liability policy in place, the plumbing contractor would be faced with a gap in coverage.

Knowledge of Specialty Coverage’s and Markets:    

Brokers who understand the operations and challenges faced by a particular vertical market have an opportunity to position themselves as risk management and coverage expert in that field. Specialization can also lead to specialty markets seeking brokers out to work with. Specialty markets seek brokers with expertise in their specific niche because they know the marketplace, and proper coverages can provide a steady flow of business. These relationships often lead to a much more comprehensive policy at an aggressive price. In addition, these programs include coverages that you would normally purchase individually that come standard to the program.

In the janitorial industry, one example is 3rd party crime coverage. Many of your standard market package policies will include 1st party crime coverage for employee theft. While this coverage is very important against an employee stealing from an employer, it does not cover theft of a client’s property from an employee. In order to cover this exposure, a policy needs to have 3rd party crime coverage.

Industry Specific Resources:

Partnering with a broker and agency, like Rancho Mesa Insurance, will also provide industry specific resources that generalist agencies will not. Below are a few examples of what you should expect when working with a specialist like Rancho Mesa.

• Industry Specific Workshops – such as OSHA 10 Certification, Mobility & Stretch, Heat Illness Prevention, Fleet Safety, Fighting Fraud in CA Workers’ Compensation, etc.

• Industry Specific Training Materials – extensive training library of over 3,000 titles in both online and in-person formats, available in English and Spanish

• A dedicated Workers’ Compensation Claims Advocate to aggressively work on a client’s existing claims.

• HR Benefits – rely on a team of HR experts who can quickly answer complex human resource and compliance questions over the phone or via email. 

• Comprehensive Living Employee Handbook – create and maintain your customizable employee handbook plus receive suggested updates when laws change.

• Client Services Advocacy – In house dedicated client services coordinator to assist with implementation of risk management services.

Rancho Mesa Insurance is dedicated to becoming a trusted advisor to their clients by providing a 365 day approach to Risk Management. Our laser focus on specific industries has allowed us to build comprehensive programs that our clients are able to benefit from. If anything in this article resonates with you, please feel free to reach out to Rancho Mesa Insurance at (619) 937-0164.

Providing Anti-Harassment Training Is the Employer’s Responsibility

Editor’s Note: This article was originally published on August 22, 2019 and has been updated for accuracy on September 12, 2019.

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

Many industries like construction utilize a semi-transient workforce that can shift from company to company as labor needs change throughout the project’s life cycle. Employees may work a few months for one employer, then move on to another employer when the project is completed. This scenario poses a dilemma for California employers looking to comply with Senate Bill 1343 (SB 1343). Providing training to an ever-changing workforce can be a challenge.

“The current employer must provide the Anti-Harassment training to new employees within six months of hire, regardless if the employee was trained and has a certificate of completion provided by a previous employer or labor union.”

SB 1343 requires California employers with five or more employees to provide Anti-Harassment training to all supervisors and employees. The passing of Senate Bill 778, on August 30, 2019, extends the deadline for this training to January 1, 2021. The training must be completed every two years. For example, if an employee was trained in 2019, their next training due date will be in 2021. New employees must be trained within six months of hire. This means the current employer must provide the Anti-Harassment training to new employees within six months of hire, regardless if the employee was trained and has a certificate of completion provided by a previous employer or labor union. Every time a worker begins employment at a new company, they should expect to receive Anti-Harassment training within the first six months. However, temporary or seasonal workers who are hired for less than six months must be trained within 30 days of hire. This requirement ensures the current employer is able to maintain accurate training records.

Recordkeeping for Anti-Harassment training is important when there is an allegation of harassment or if an employee reports the employer for non-compliance. The Department of Fair Employment and Housing (DFEH) “accepts complaints from employees that their employers have not complied with the law…If DFEH finds that the law has been violated, it will work with employers to obtain compliance with the law,” according to the DFEH’s “Sexual Harassment and Abusive Conduct Prevention Training Information for Employers” document.

Rancho Mesa offers free online Anti-Harassment training for supervisors and employees to all of its clients. The training can be accessed from a computer, tablet or smartphone. The online platform provide automated recordkeeping and rescheduling to ensure as soon as an employee completes the training, they are automatically scheduled to complete it in two years. It also allows administrators to archive employee training records when an employee leaves the company and reactivate the records when/if they are rehired. To learn more about the trainings, visit our website or contact the client services department at (619) 438-6869.

SB 1343 requires employers take responsibility for providing Anti-Harassment training to all of their employees and supervisors. Take advantage of Rancho Mesa’s Anti-Harassment training and ensure your company stays compliant.

Fraudulent Claims Could Be on the Rise

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

California is in the middle of a construction boom. There is more work than qualified employees and contractors need people on their job sites. While fraudulent workers’ compensation claims are relatively low right now, California contractors are asking what will happen when there is not enough work to keep everyone busy?

Fraudulent workers’ compensation claims peak when steady work dries up and opportunities diminish. When an employee doesn’t know if they will be employed next week, they can panic and consider making a fraudulent workers’ compensation claim to ensure a compensation check. Regardless of the size of your company, consider how you may be able to create growth opportunities for your employees. Even if an employee is with your company for a short time, it is important to show them there are opportunities for promotions and pay raises. Keeping your employees happy and goal oriented is extremely effective in reducing fraudulent workers’ compensation claims.

According to Chris Dill, Special Investigations Unit Manager for ICW Group Insurance Companies, millennial’s are two to three times more likely to commit workers’ compensation fraud compared to older employees. That is not to say you shouldn’t hire a millennial, just make sure they know there is a path to move up in the company, have job descriptions, and promotions available with new titles. This is essential to keeping their interest and dedication to your company. Make sure to have meetings where every employee can speak freely in an open forum, so their voices are heard. If an employee feels valued and a member of a cohesive team, they are less likely to create false claims, which can lead to a more profitable company.

When bidding for a job, it is next to impossible to account for injuries that may happen and how those injuries will cut into your net profit. If your only goal is revenue, profit is hard to attain and growth is only sustainable if your profit remains consistent. Keeping workers’ compensation claims to a minimum is a contributing factor to achieve consistent profit.

There are many ways to decrease the likelihood of fraudulent workers’ compensation claims. Rancho Mesa Insurance Services offers strategies to help clients stay ahead of this problem, including our upcoming workshop “Fighting Fraud in CA Workers’ Compensation System” on September 19, 2019. Please contact us at (619) 438-6889 or ccraig@ranchomesa.com for more information on how to prevent fraudulent claims, or with any questions you have regarding your policy.

Top 5 Free Safety Apps for Landscape Contractors

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

Mobile devices have become an invaluable tool for many people, on the job. They provide access to contacts, email and applications (i.e., apps) that can make work a lot simpler and safer for landscapers. We researched the top apps that boost worker safety. In no particular order, here are the top 5 free safety applications for the landscape industry.

OSHA-NIOSH Heat Safety Tool
This app allows workers and supervisors to monitor the heat index for any jobsite.  By utilizing the apps features any user can get a reminder about the proper safety precautions and proactive measures that should be taken under the given conditions. It is available in both English and Spanish (to access Spanish, set phone language to Spanish).

Red Cross First Aid
This app provides access to information on how to properly handle first aid emergencies. It is available in both English and Spanish.

Chemical Safety Data Sheets - ICSC
This concise app offers searchable information on substances, delivered in a simple manner. It is only available in English.

NIOSH Sound Level Meter
This app quickly monitors the level of noise exposure in order to judge and evaluate if further testing is needed. It is available in both English and Spanish.

NIOSH Ladder Safety
This interactive ladder safety application is used to assist the worker in positioning a ladder at an optimal angle. It is available in both English and Spanish.

There are many applications employers can use on devices to help improve their safety program, formalize trainings, and consolidate information. 

If you use an application (with or without a fee), we would like to hear about it, so we can share with all of our safety-minded clients. Please send your feedback to Alyssa Burley, aburley@ranchomesa.com.

Employers Prepare As Reports of Sexual Harassment Spike

Editor’s Note: This article was originally published on June 27, 2019 and has been updated for accuracy on September 12, 2019.

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

Americans are all too familiar with the #MeToo movement that has shed light on sexual harassment in the workplace. Outspoken celebrities and prominent public figures have brought this topic to the forefront in the media. With all the publicity surrounding sexual harassment allegations, people are empowered to speak out and report unwanted behaviors in the workplace. This leaves many employers asking what they can do to prevent harassment and prepare for possible harassment allegations.

Charges Alleging Sexual Harassment FY 2010 - FY 2018

EEOC. Charges Alleging Sexual Harassment FY 2010 - FY 2018.

The United States Equal Employment Opportunity Commission (EEOC) released its “Charges Alleging Sexual Harassment FY 2010 - FY 2018” report. The data shows from 2010 to 2017 reports of alleged sexual harassment incidents actually declined 15.7%, over the seven-year span. However, based on the data, it is difficult to know if incidents of sexual harassment declined or just the reporting of incidents declined.

However, during 2018 there was an increase of 13.6% in alleged sexual harassment incidents, which accounted for over 7,600 claims at a cost of $56.6 million dollars in damages.

Year	2010	2011	2012	2013	2014	2015	2016	2017	2018
Percentage Change Over Previous Year Number of Charges	NA 7,944	-1.4% 7,809	-3% 7,571	-4.2% 7,256	-5.7% 6,862	-0.6% 6,822	-0.9% 6,758	-0.9% 6,696	13.6% 7,609
Percentage Change Over Previous Year Damages (In Millions)	NA $41.2	9.5% $45.1	-4.7% $43	3.7% $44.6	-21.5% $35	31.4% $46	-11.5% $40.7	13.8% $46.3	22.2% $56.6

^{EEOC. Charges Alleging Sexual Harassment FY 2010 - FY 2018. https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment_new.cfm.}

California’s Senate Bill 1343 (SB 1343) now requires employers with 5 or more employees to provide 2-hour Anti-Harassment training to supervisors and 1-hour training to employees, every two years. As part of this new requirement, the initial training must be completed for all employees and supervisors by January 1, 2021, according to Senate Bill 778, approved on August 30, 2019, which extends the training due date. 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.

It’s our belief that as more people are trained to recognize harassment in its many forms, we expect to see the number of reported alleged harassment incidents increase in the coming years. So, what should California employers do to mitigate this increased risk?

Course of Action

For employers, the best course of action is two-fold. Make sure you are compliant by training your employees and supervisors; second, make sure you have Employment Practices Liability Insurance (EPLI) as part of your risk management portfolio.

Training Supervisors and Employees

Understanding the confusion, time and financial burden SB 1343 puts on all California employers, Rancho Mesa offers its clients SB 1343-compliant free online supervisor and employee Anti-Harassment training. Supervisor and employee trainings can be completed 100% online via a computer, tablet or mobile device.

California employers who are not clients of Rancho Mesa can find this training through 3rd party vendors that work in the Human Resource arena and will need to contract with them directly to meet this requirement.

Employment Practices Liability Insurance (EPLI)

EPLI is “a type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation,” according to the International Risk Management Institute, Inc.

If your organization currently does not have EPLI, or you are unsure about what is covered in your policy, we recommend you contact your insurance broker or call us to get clarification. With the projected increase in these types of claims, not having this vital coverage in place could expose your company to severe negative financial impacts.

Whether the increase in reported alleged sexual harassment incidents is a result of more incidents or simply more people feeling comfortable reporting the harassment, every employer should be prepared to properly train their employees and supervisors, while actively working to prevent and stop all forms of harassment in the workplace.

Contact the Rancho Mesa Insurance Services Client Services Department at (619) 438-6869 or aburley@ranchomesa.com for more information about free anti-harassment training for supervisors and employees, or learn more through our other articles on the topic.

Alyssa Burley is NOT a licensed insurance professional. Informational statements regarding insurance coverage are for general description purposes only. Contact a licensed insurance professional for specific questions.

Fleet Management: Driver Behavior Counts

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

When you give the car keys to your teenager for the first time, you wish you were sitting in the back seat controlling how they drive. Unfortunately, you have very limited control and the consequences of poor driving can be disastrous. It’s time to think of your employee drivers in a similar manner; these principles apply to your company’s fleet management program.

To gain some sense of control, you regularly perform fleet inspections and driver trainings. You also hire and manage according to driving records, which provides a picture of the employee’s past driving history. Though, if you are honest with yourself, you too have driven over the speed limit many, many times before you received your speeding ticket. So, a driving record is not the only way to gauge a driver’s behavior.

If you had an effective and efficient way to impact your driver’s behavior before a ticket or accident occurs, you would feel more confident about managing your fleet.

There are Global Positioning Systems (GPS) that can monitor some of the problem behaviors like speeding; however, the onus is on you (the employer) to analyze the information then act on it. Another problem with this type of system is willful negligence. What happens if you have the data, know of a problem, but don’t act? This could cause a major problem when an accident occurs because you knew of a driver’s poor behavior but did nothing specifically to correct it.

The insurance industry is in a commercial auto claims crisis. The cost of vehicle repairs have increased and whether you employ safe drivers or not the price to insure a vehicle is skyrocketing. Simply, the claims have exceeded the premiums collected and the carriers are trying to recover the loss. So, steering driver behavior is more important than ever for your bottom line.

To the degree you can control auto claims created by your employee drivers, the better your premiums will be. Fewer claims equal lower premiums — simple as that. Claims are caused from poor driving behavior. Improve drivers’ behavior on any given day, and you’ll reduce the number of accidents.

But, how do you do that?  Logistically, you can’t physically ride along with every employee to ensure they are driving safely, and offer real-time corrective guidance when they make mistakes.

As mentioned, there are GPS devises that measure driver behavior and performance. The devices will consolidate the information; but, it is up to the employer to analyze and act on the information.

Ask yourself, do I have enough time to consistently review this information and implement the correct plan of action? Do I have the resources available to manage this process?

If you are unsure and would like to learn about automated ways to track, manage and correct behaviors likes seatbelt usage, speeding, harsh braking, acceleration and corning, join us at our upcoming Fall workshop, “Driver Behavior is What Counts” and learn how to effectively and efficiently improve your fleet management practices and reduce premiums using smart technology.

In the meantime, if you have any questions, please contact Sam Clayton at (619)937-0167.

Time To Renew Your Bond Line of Credit

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

The majority of Rancho Mesa’s contractor clients have a fiscal year, end of December 31, for their company financial statements. During March, April, and May we collect a variety of financial information from our contractors to update the bonding company. The underwriting items we request include the 12/31 CPA financial statement, along with the work in progress and closed contract schedules. We also request an updated bank letter, account receivable/account payable schedules, and a personal financial statement from the owner.

Once this information is collected, submitted to, and reviewed by the bond company, they may follow up with questions or require additional information to explain what has been submitted. They will also ask the bonding agent to request single bond and aggregate bond program “parameters” based on the contractor’s estimate of work over the next 12 months. This information forms the basis for the bond agent’s line of authority that the bond company will provide to the bond agent.

The line of authority provides the agent with approval to execute the bid, payment, and performance bonds for their contractor client within the negotiated single and aggregate limits. The bond agent line of authority also includes certain conditions that would fall outside the agent’s authority to approve the bond request; therefore, the agent would need to submit the request to the bond company for approval. Some of the conditions that fall outside automatic approval include:

a.) a bid spread in excess of 10% between the first and second bidder.

b.) a project located outside the contractors’ normal geographic area for work.

c.) the contractor taking over work of a defaulted contractor, etc.

The agent line of authority is an efficient way for the bond agent to service their contractor client accounts without requiring approval from the bond company for every project. Upon receipt of a new bond request, the agent will review the project information to ensure it falls within their authority, and then they will execute the bid or performance bond and deliver the bond to their client. The line will usually expire on April 30th of the following year – which restarts the process to collect the financial information for the bond company to renew the agent’s line for another year.    

If you would like a better understanding of how the bond line of authority affects your bond program, please contact Matt Gaynor, at (619) 937-0165.

Pollution Liability for Landscape Contractors

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

Most landscape contractors believe their exposure to pollution is limited to the herbicides, pesticides, and fertilizers they apply. In order to provide some limited coverage for this it is common to see the Herbicide/Pesticide Endorsement added to the Commercial General Liability Policy. Although the endorsement extends some coverage, Contractor’s Pollution Liability would help fill the gaps created by the General Liability Policy for all of the landscape contractor’s pollution exposures. 

Remember, General Liability Policies do not provide coverage for pollution. Contractors Pollution is protecting your environmental liability, and in today’s world the awareness to preserve the environment has never been stronger. A landscape contractor’s exposure to environmental liability is considered “high” and classed as “high” along with drilling, subsurface, site/dirt work, paving, mechanical and electrical contractors to name a few. 

Landscape contractor operations are almost exclusively performed outdoors in the environment which is the result of the high exposure. Beyond herbicide, pesticide, chemical applications and the property damage or bodily injury that may arise from such operations, other material exposures would include but are not limited to; fuel, oil, fumes, hydraulic fluids, silica, foundry sand, manure, dust, waste, water, natural gas, propane and mold. 

The Herbicide Pesticide Endorsement is an essential piece to any landscape contractor’s insurance program; however, a Contractors Pollution Liability policy is the best way to transfer your environmental exposure. Not all pollution policies are the same: capacity, coverage, exclusions and deductibles need to be examined. Making sure you have a policy that fits your operations and your exposure is critical.

For questions about which policies may match your company’s risk, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

What Do You Mean My Deductible Is Infinity?

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

Employment Practices Liability Insurance (EPLI)

Employment Practices Liability Insurance (EPLI) can protect companies from claims related to wrongful termination, discrimination, defamation, unfair hiring/firing practices, and wage and hour lawsuits. EPLI policies may also provide defense costs associated with responding to employment related lawsuits.

HIGHER THAN AVERAGE DEDUCTIBLES

With the increasing frequency of EPLI claims and 40% of California claims occurring within companies with less than 100 employees, deductibles have risen to previously unseen levels. It is now common to see per claim deductibles at a $10,000 starting point and jumping as high as $50,000. These higher retentions can, at times, deter many employers from securing coverage when they might need it most.

YOUR DEDUCTIBLE IS INFINITY

For those employers who elect to self-insure this exposure and go bare without a policy, there is a question that needs to be asked. What is your deductible without EPLI coverage? The simple, very possible answer is that it can be infinity. That is, an employer is responsible for the first dollar to defend along with any future negotiated settlement. That unknown is why many of our clients ultimately purchase EPLI as their balance sheet cannot absorb an infinite loss.

ATTENTION BUSINESS OWNERS!!!

In this unsettling time, across various workforces, it makes good business sense to consider EPLI options with varied deductible ranges. Having that clarity brings comfort to many clients who have worked years to build their business, acquire assets, and improve their net worth. Exposing their business to what could very well be unlimited costs creates considerable risk moving forward.

COMMON MISCONCEPTIONS

Misconception: “If I file an EPLI claim, I will owe the entire deductible upfront.”

Truth: When a claim is filed, policy holders will team up with an attorney who will bill hours until your self-insured retention is met. This could run the course of years with small bills being paid out over time.

Misconception: “I can’t afford to pay an entire annual premium at once, on top of my other insurance renewal premiums.”

Truth: Rancho Mesa can generate a finance plan that will allow you to pay your premiums over a 12 month period.

Misconception: “If I ever have a claim occur, I will just purchase a policy at that time to protect my business.”

Truth: EPLI carriers include prior acts exclusion for this very reason. Any claim that has been made, even in its infant stages, will be declined. You must have a policy in place in advance in order to protect yourself.

Misconception: “I have never had an EPLI claim. Why would I have one now?”

Truth: The California mandate AB 1825 and SB 1343 have increased awareness and visibility of employment related lawsuits. In light of workplace discrimination concerns and the #MeToo movement, the State of California requires all employers with more than 5 employees to conduct Sexual Harassment Prevention Training.

Misconception: “My general liability policy covers EPLI.”

Truth: General liability carriers exclude employment practices liability. If you were to file a claim they would deny coverage.

Business owners deserve a clear explanation of ways to protect themselves from insurable risk. If you would like to discuss how your business is protected, please contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.