From a risk management perspective, cell phones and vehicle usage occur in the following three scenarios.
                        1. Company owned vehicles
                        2. Employee owned vehicles used in the business
                        3. Rented vehicles used in the business

   Depending on your business, all three scenarios may apply.  Below are some ideas to consider implementing to control the risk of vehicles and cell phone usage.  In addition, insurance is an important tool we use to help our client’s manage the financial consequences when an accident happens.

1. Require Hands-Free Devices Only

This is the law, so this is a “must policy”.  You may want to go so far as to provide the hands-free equipment for the employee.  Hands-free operation does not guarantee 100% safety but will provide remote workers with less distraction if they must use their cell phone on the road.

2. Warnings in Company Vehicles

Putting notices in all company vehicles reminds employees that the main function of the vehicle operator is to arrive safely at a destination.  Options to the hands-free policy could require either passengers being responsible for handling the cell phone or the driver pulling off the road before using their cell phone.

3. Provide an Answering Service or Forwarding Option

This option gives remote workers the ability to have calls forwarded to another individual or to an answering service.

4. Shut It Off

It may be that you do not want any cell phone usage while operating a vehicle.  To some, this may not seem practical, but, from a risk management standpoint, it is the best policy.    

Whatever you decide, now is the time to do something about this exposure.  In-vehicle cell phone usage does increase the chance of an accident.  If you do not have a written company policy addressing the use of cell phones while operating a vehicle on behalf of the business, now is a good time to change your company’s handbook.  Businesses operating in more than one state, or outside the United States, should be aware of the local laws. 

Changing the way of using your cell phone will become habit over time.  Not changing opens up a host of problems.  Get on board with this early, so when July 1st rolls around, everyone in your business has new habits when using their cell phone.

Historically, the reaction from the insurance companies has been the tightening of underwriting, and the pricing process. Inevitably, some insurance companies are unwilling to write new policies, or decide not to renew existing policies. Fortunately, there have always been some other insurance companies willing to jump into the market place to offer coverage and fill this void.

From a political and regulatory perspective, all eyes will be on how the insurance industry responds to claims, renewals and future pricing of homeowners insurance in the stricken areas. Insurance Commissioner Steve Poizner has assured homeowners that rates will not increase and insurers will not leave the market. He stated that insurers in California are healthy and have the money to pay out claims. There are numerous press reports stating that Allstate Insurance Company stopped writing new homeowners insurance policies this summer, citing financial risks from natural disasters like wildfires and earthquakes. These reports raise concerns that other insurers may follow suit.

Commissioner Poizner will have his hands full with balancing the needs of homeowners, while the insurance companies push to recover from the payouts. Backing up the insurance companies are the reinsurance companies who typically are hard hit in a catastrophe. With increasing cost of reinsurance, insurance companies will be hard pressed not to pass this cost on to the homeowner.

As we move into the 2008 legislative session, legislators and Commissioner Poizner are expected to examine whether the legislation responding to the 2003 wildfires in San Diego and Southern California has worked as intended in simplifying the claims and settlement process, or whether additional measures need to be enacted to assist the response to the 2007 wildfires.

Commissioner Poizner is responding to the challenge of timely settlements for homeowner claims. To assist with the prompt processing of insurance claims, Poizner has issued a declaration to allow California Department of Insurance (CDI-licensed insurance adjusters) and insurance companies to use the services of non-CDI licensed adjusters, such as those from out-of-state, to assist with the processing of the multitude of insurance claims arising from the firestorms. However, the work performed by the non-CDI licensed adjusters must be under the active direction, control, charge, and/or management of a CDI-licensed insurance company or adjuster.  In addition, insurance companies and insurance trade associations are coordinating with the Governor’s Office of Energy Services to establish additional claims and assistance centers in order to make it convenient for homeowners to file claims.

In conclusion, the recent wildfires have placed a strain on insurance companies providing home insurance in Southern California.  Insurance Commissioner Poizner is actively working to provide prompt and fair claims services and keeping watch over how insurance companies react.

In holding true to our commitments in "Educating" the marketplace, please join us at our next and upcoming Seminar:

SUBJECT(s): Are you hiringTop Performers?  How do you know? Employment Law: 10 Costly Mistakes Employers make and how to avoid them.

Date: November 6, 2007
Time: 8:30AM check-in. 9AM-11AM seminar - Continental Breakfast will be provided.
Place: La Cumbre Country Club. Santa Barbara CA
Fee: Complimentary

Speakers: Gary Morais, CEO ThinkCAPiQ, Jeffrey A. Dinkin, Partner, Sheppard, Mullin, Richter and Hampton, LLP

What you will lean:

• What tools to use in order to make the "right" hire.
• How to determine an employees strengths and weaknesses.
• How to manage performance and communication gaps.
• How to make a good employee into a Top Performer.
• How to evaluate of you  have the right person for the job.
• How to avoid wage and hour claims.
• What are the 10 legal mistakes you need to look out for?
• Simple things to remember when getting entangled with Employee issues.

RSVP:
Marianne Engelkes - mengelkes@rivierains.com or 805-880-4261

We keep our seminar attendance small, so please register ASAP.

It’s October!

Now that our first eighteen months of Riviera Insurance Services are behind us, we can reflect upon where we came from and look forward to where we want to go. Riviera has been very focused with the tasks at hand and we have succeeded in coming a long way in a short period of time. I am very proud of our progress.

Riviera’s core group consists of Steve, Sandy, Jackie and me. We have worked together in various capacities for up to twenty-five years. We all share the same dedication to providing personalized services for our clients. Our team is confident that we can assist our clients with their ever-changing and always growing needs. We are focused on creating relationships that encourage our customers to continue working with Riviera year after year. Additionally, we are always looking at how we can improve and grow ourselves. To assist us in our strategic planning, I like to look to outside sources for inspiration and new ideas.

One such source is a book that I highly recommend: Sticking to It: The Art of Adherence is written by Lee J. Colan. Mr. Colan emphasizes the adherence to goals. Colan states, “The challenges for today’s businesses are always changing, but the formula for winning remains the same.  The key to winning the game is focusing on ‘how’ more than ‘what’. In other words, strategy gets you in the game, but execution gets you in the winners circle.”

 He provides a formula that assists in the setting of goals and strategic planning.

Adherence= Focus x Competence x Passion

Colan explains the three components of Adherence. He breaks down each area as follows:

Keep in mind that this is a multiplication formula, so if even one of the components is zero, the adherence (product) will be zero! Thus, each component plays an essential role in the overall results of adhering to the strategic plan. I could elaborate on this book, but to be brief I will just state that I found this book to be a great read. Success is not an accident. Instead, it comes from much planning and focused, competent, and passionate effort.

I always appreciate finding a tool, such as ‘Sticking to it,’ that can assist me with planning for the future. Please let me know if you have a book or two to recommend that has been helpful in the pursuit of your successful business.

Best wishes to everyone. Thank you for helping us have a successful 2007.

Sincerely,

Chris

This month’s article concerns the nonprofit community, an area of business that we know many of you are already involved with or actively considering. Nationally, nonprofits contribute in excess of $2 trillion to the U.S. Economy and, in Southern California; the Santa Barbara and Ventura communities have among the highest number of nonprofits per capita.

One of the main difficulties in running a successful nonprofit is attracting board members. There are a number of risks involved in running a nonprofit and it is of vital importance to protect those involved.

Director and Officer Insurance is a key ingredient in protecting nonprofit organizations. Below is some useful information to consider.

Protecting Nonprofits, Directors and Officers (D&O) Liability Insurance:

D&O coverage protects against a breach of duty by the directors or officers of an organization. Policy guidelines can differ between insurance companies, but the general idea is to protect the individuals and organization from suits resulting from "any actual or alleged act or omission, error, misstatement, misleading statement, neglect or breach of duty by an Insured Person in the discharge of his/her duties”.

Covering where others fall short:

Indemnity provisions and state “safe harbor” laws for nonprofits do not provide proper coverage for D&O exposure. While indemnity provisions can protect an individual in certain situations it is possible and quite common for lawsuits to be filed outside of the narrow limitations that most indemnity provisions fall into. In addition, most indemnity provisions compensate the individual for their loss, covering the cost only after the individual has paid it. Properly written D&O insurance covers the costs up front. “Safe harbor” statutes tend to differ from state to state and typically have limitations so narrow that most suits fall outside of their coverage.

Nonprofit exposure and current concerns:

With the exception of nonprofits in the medical field, there is a low level of exposure for most nonprofits for liability suits. It should be noted though that in recent years there has been an increase in the frequency of employment related suits brought against nonprofits. An estimate 90% of suits brought against nonprofits are employment related. While actions are being taken to reduce such suits, the liability is still there and it is important to be aware of the risks.

Claims-made coverage and the Extended Reporting Period (ERP)

D&O policies differ from most liability coverage in that they will pay for any claim made during the policy period, even if the event occurred prior to the policy period, this is called “claims-made coverage”. The downside to this is that D&O policies do not cover once the policy is canceled, even if the incident occurred during the coverage period. For example, Coverage is bought in 2002 and canceled in 2006. Then in 2007 a claim is made concerning events from 2005. Under the claims-made coverage, there is no coverage from the canceled D&O policy. Still, companies understand that it is desirable to have coverage for claims occurring after a policy period, so it is possible to purchase an ERP to deal with “Tail Issues”. When purchasing a policy there are a number of variables to consider:

• Can ERP be bought at your option?
• How long is the ERP? 6 months? One year? Two years?
• Cost of ERP and the window in time which it is possible to purchase ERP
• Is the cost of defense within limit of insurance?

While there is some standardization in policy language, there are also critical differences among D&O insurance policies. When deciding on the best coverage you must take into consideration the organizations operating characteristics. We recommend a thorough review of coverage. With proper D&O coverage, individuals serving on the board can act with the full knowledge that they are protected. In the long run this will help you organization attract and retain a stronger board.

Be safe and stay healthy.

“Oh, and remember: next Friday… is Hawaiian shirt day. So, you know, if you want to, go ahead and wear a Hawaiian shirt.”
-Bill Lumbergh, Office Space

Are traditional ideas of work “benefits” not cutting it in your company?  You are not alone.  Across the country, businesses big and small are doing their part to give their employees more active and healthy lives.  In return, employers are seeing a more efficient and loyal work force, reduced health care costs, less down time due to sick days, and a more positive and competitive work environment. 

Most working Americans are now putting in well over 40 hours a week at their job.  Until recently, the reduced time at home and the reduced health that comes with such hours have received little concern from businesses, resulting in poor health and diet and amazing levels of stress among American workers.  

All this has had a disturbing affect on our population, becoming a major contributor to the epidemic of obesity and increased danger of heart disease among working adults.  For employers, this manifests itself through increased health insurance costs and a greater number of sick days and worker compensation claims.

Times, however, are changing and many businesses are discovering the benefits of internally promoting healthier lifestyles for employees. 

While daycare, workout facilities, and health seminars are becoming commonplace in the corporate world, there are other companies going so far as to offer in-house chefs and adoption assistance. 
And while more complex programs may be outside the reach of your own business there are always examples of how even a small amount of change can greatly benefit both the employer and the employee:

Beyond the Water Cooler:  Employee Benefits for the Modern Business:

Education
Education is key to making a change in any situation.  Providing popular health magazines and pamphlets on preventative care and services in a common area is a simple way to keep employees up to date on common health concerns. 

Healthy eats
When catering a company event, having a business lunch, or even brown-bagging it lean towards well balanced meals and healthier foods.  Encourage others to look for healthy food options.

Activity 
More and more companies are sponsoring corporate challenges and sporting league teams in an effort to have an active workforce.  Competition can work to strengthen the bonds of team members as well as provide valuable exercise.

Wellness leave
While sick leave has been an aspect of business for years it is only recently that more progressive companies have begun integrating a wellness leave for their employees.  These programs give employees a chance to look after their own health and often includes time to care for a sick child.  Time for preventative care reduces the cases of longer term illness.

Discounts
Contact local health food stores, gyms, or fitness centers and talk to them about providing discounts to your employees in exchange for increased business.  Any attempt to make a healthier lifestyle more available to your employees is beneficial.

Team building
Team building events, whether they take the form of weekly meetings or help from an outside company, have the valuable effect of reducing stress by creating a more united and respectful work force. 

Stress management and awareness
Become an expert in noticing unrelieved stress.  While pressure from work helps to increase productivity, unrelieved stress can show itself through irritability and short temper, increased errors, and prolonged fatigue.  Even a few words of encouragement can make a huge difference in an employee’s day.  Reduced stress from work is shown to improve overall health and plays a huge factor in employee retention.

In-house Clinics
Talk with your health care provider about having an annual or bi-annual health fair.  In addition to education opportunities this is a great opportunity for employees to have blood pressure and cholesterol tests.  From high cholesterol to substance abuse issues these clinics can provide valuable help to your work force.

Lead by example       
Providing an example of healthy living to your employees is the key to an effective program.  Making choices for yourself will give a company health program the strength it needs to be effective in creating workplace change.

As a leader in your business, what can you do to increase awareness of living a healthy lifestyle? 

Quality of work correlates to the quality of life that an employee is leading.  Quite simply, healthier employees work harder and take fewer sick days.  By taking small steps, or even large steps, to improve overall employee health you can increase productivity and strengthen your retention rate by decreasing employee burnout. 

The benefits of work have grown beyond the promise of a casual Friday.  The time is now to show employees how valuable they are to our success.

Over the past three years, the majority of California employers have seen their Workers’ Compensation rates drop over forty percent. In addition to this, there will be a continued drop in rates this summer.

To add to this good news, Insurance Commissioner Steven Poizner is proposing a reform package to help further lower rates. Poizner’s reform package includes an improved method of forecasting loss costs, speedier delivery of benefits to injured workers, and improved methods of combating fraud.

While we can all be happy with this news, business owners should remember that since 1995 California has been witness to a rollercoaster ride of Workers‘ Comp rates. I know that for many of our customers there are questions about when the dropping rates will reverse their momentum.

There are more important matters to attend to, than looking at our crystal ball and predicting the next rate increase.  I suggest that all employers take advantage of the current low rates and, more importantly, that they implement long-term methods of lowering rates.  Taking advantage of everything available to achieve the lowest possible rates all the time will help business owners stay competitive and continue to save money, no matter how rates fluctuate.

Internal adjustments are the simplest way to lower rates. Below are some ideas to incorporate into your long-term strategy to get the lowest rates.

1. Being aware of workplace safety standards and ensuring that all standards and codes are met will have a huge factor on your claim experience.  Ensuring that all employees are aware of safety and emergency procedures will provide the safest of environments.  In addition, timely inspections and proper certification will benefit you immensely when it comes time to reducing frequency and severity of claims.

2. Over recent years, fraud has become a large reason for rising rates.  Properly reporting incidents, along with good investigation practices will help to minimize the cost of claims and give the insurance companies ammunition to help fight fraudulent claims.

3. Claims monitoring helps to ensure a claim is handled economically. This starts when the claim is first submitted to the insurance company.

4. Establishing a relationship with an occupational medical facility helps to keep claims cost down. This facility should know your business, bill you for first-aid claims, and understand how you can accommodate returning employees to the work place either at full or modified duty.

5. Auditing how the premium is calculated will ensure paying the lowest amount possible. This requires annual audits of the Experience Modification, proper classification of employees, and calculating payroll to take advantage of the rules related to calculating premiums.

Implementing these processes can seem daunting for many businesses. Riviera Insurance Services can help you and provide the resources to help you. Let us help you keep the prices down and the good times rolling!

With spring in full bloom on the Central Coast and the first year of Riviera Insurance completed, I am happy to say that things are moving into place quite nicely.  With everything new coming about I thought it might be time to review a few things, specifically, your company’s benefits package and how efficiently it is working for you.  As the cost of plans is consistently on the rise, it is critical review policies annually.

Recently, Steve Woodward and I were working with a tech start up. This company came to us and asked us to cover every aspect of their insurance program.  Their biggest concern was creating a competitive and efficient benefits package, something we felt confident in developing. 

This particular entrepreneur had successfully built his last company up to several hundred employees and he wanted a program for his new company that would be open to similar growth.  We were hired to develop an employee benefit plan that provides flexible options for the employees and is sustainable as the business expands.

Contrastingly, I remember the first time Steve and I sat in a room together with the CFO and HR Director of a different company.  Almost instantly, the CFO focused on the expected rate increase and wanted to cut benefits. Meanwhile, the HR Director told the CFO that their current benefit package was not a competitive recruitment tool, and that it affected the talent they could attract and retain.  Debate ensued.

In the end, we compromised.  The employer saw their cost rise and employees saw their co-payments increase.

Today Steve and I try to approach things a little differently.  Over time, we have refined our approach and designed a viable solution for both sides of the issue.

Our first point of business is to find a price range that the company is comfortable budgeting.  From here, we establish a fixed dollar amount that the employer will pay for each employee.  In some cases, there may be different dollar levels, dependent on job title.

We then work with the HR Director to establish a menu of plans.  Key components include doctor network and the spectrum of plan design features; HMO, PPO, and HSA are common acronyms on this menu.  With new options available every year it is critical to educate both employer and employees to help them choose individual plans.

When current or perspective employees are looking at the benefits package, they should see a spreadsheet detailing each plan and cost. This simple method of education allows the employees to take more control over their health insurance; benefiting them, and their employer.

Changing benefits, to combat increased costs, is never easy.  However, employers who embrace the change will find solutions that work for them and their employees.  At Riviera Insurance, we are dedicated to making the most of your insurance investment in the face of rising costs.

We are here to help you design and implement an effective employee benefits plan.  Please let us be of service.