How to Reduce the Risk of Employee Lawsuits

Employee-related litigation is a growing concern among many small-business owners. Lawsuits can result in increased insurance premiums, higher workers’ compensation costs, lost productivity and even ancillary damages from other parties. Fortunately, there are several proactive steps small-business owners can take to help reduce risk:

•    Screen new applicants to ensure compliance with sensitive needs. It’s not always possible to find perfect employees, but that doesn’t mean small-business owners can’t be selective when evaluating applicants for specific areas of concern. Create a clear job description that outlines essential skills and pre-requisite hiring criteria, then stick with it.

•    Implement redundant safety and security measures. Safety and security should always be a priority. Make sure everyone has a copy of the corporate response to safety and security concerns, provide training to all new hires, and refresh learning at least annually. Most of all, ensure that redundant security measures are in place to prevent a lapse of safety or security. For example, require that two people be in attendance when employees are working in high-risk areas or dangerous situations.

•    Encourage health and wellness. Alcohol and substance abuse, obesity, tobacco use, and other common health concerns not only drive up the cost of employee health care, but research has shown that healthy employees tend to have higher levels of productivity, have fewer accidents and miss work less. Invest in your employees or encourage other health and wellness activities by sponsoring prevention-related messages and healthy conduct.

•    Establish a protocol and procedure. Make it simple for employees to report unsafe or unsound practices they encounter in the workplace. Not only does it empower workers to contribute to the overall function of the business, but it reduces the fear and anxiety associated with pointing out areas in need of change. Remember, employees are often the first to spot a problem. By encouraging them to report a problem early, it is often possible to avoid a much more serious issue later.

•    Immediately investigate all accidents, injuries and other claims. This is one area where time is of the essence. Not only does it demonstrate a good-faith effort to immediately rectify a problem situation, but a timely investigation is also important to protect your business. For example, rather than waiting to send an injured employee to the hospital, which could result in complications or additional injury, make sure proper care is received immediately and verify that the employee was not under the influence of alcohol, prescription drugs or other substances. Take photographs and interview others as soon as possible while gathering information. Always include a written statement and follow the same process for every employee, even for seemingly minor situations, since many claims later turn out to be more serious than originally anticipated.

Tips for Choosing a Franchise Policy

Thinking about purchasing a franchise? Or do you already own a franchise but would like more options when it comes to insurance? Not only is insuring a franchise different from insuring other types of business entities, but there are special considerations when evaluating your options. Following are some things to think about when purchasing a franchise policy or renewing your existing coverage:

•    Obtain a copy of the franchise insurance requirements from the Uniform Franchise Offering Circular and fax it to your insurance agent for a quote prior to purchase. Compare it to the insurance provided by the franchise, to determine which provides the best coverage and price. One of the benefits of working directly with an agent is the ability to purchase the exact type of coverage suited to your specific needs.

•    Find out in advance if you are able to purchase insurance independently or if it must be included in the franchise package. Obtain proof in writing, and always have the new policy in place prior to dropping existing coverage. If you obtain insurance elsewhere, be sure to send proof of coverage to the franchise in a timely manner.

•    Consider additional policies. Even if the franchise is fully insured, many business owners find additional liability protection to be an excellent investment. It provides an added layer of protection against lawsuits and liability, and it is an important part of your financial planning portfolio to ensure that personal assets are safe and secure. Other important forms of insurance include flood, loss of business use and key man coverage.

Prescription Drug Plans: What You Should Know

For Americans who rely on prescription drugs, there may be a way to help lower the cost of these medications through the use of a prescription drug plan.

These plans can help provide consumers a solution to purchasing expensive prescriptions.

Prescription drug plans can be purchased by individuals or as part of group benefit plans via a health maintenance organization, preferred provider organization, point of service, or other group insurance system.

Normally, an employer offering the group benefits plan will contract with a vendor of prescription drugs.

This prescription drug vendor has the ability to work with numerous pharmacies across the United States.

Because the group of pharmacies generates a high volume of prescription drug sales, they have the ability to discount the drug purchases made by consumers in the plan.

Most prescription drug plans provide consumers with a discount card that can be used when purchasing prescriptions.

These cards can be obtained from drug companies, large drugstores, various insurance companies and some nonprofit organizations.

In many cases an annual fee is charged for being a part of the prescription drug plan.

And there is usually a different fee, depending on whether the consumer plans to purchase generic or brand-name drugs.

This fee normally pays for itself in a very short period of time.

For example, the prescription drug plan may allow consumers to purchase a drug for $15 that otherwise would cost them $35 if they were not part of the plan. Some plans may also charge a small co-payment for prescriptions. In addition, some insurance companies may have limitations on some drugs that they do not cover in their plans.

Prescription drug plans can vary widely, so it is important to research what is available and to compare different plans.

The right plan, however, can help to keep the cost of prescription drugs much lower and more affordable

What Are Dividend-Paying Life Insurance Policies?

Dividend-paying life insurance policies may just be one of the least understood but most valuable financial planning tools in existence today. However, unlike other recent creations, dividend-paying life insurance policies are not new or exotic. In fact, they have been in existence for nearly 200 years.

Once considered the domain of the powerful and wealthy, the benefits of dividend-paying life insurance policies are now available to everyone. The trick is to understand where they fit into your personal financial portfolio and figure out how to select the right product for your individual insurance needs.

Dividend-paying life insurance policies are available in whole life, universal and variable forms, with funding periods ranging from less than 10 years to death. In addition to the face value or death benefit of the policy, dividend-paying life insurance builds cash value over time. There are also dividends paid on the policy that can be used in the following ways:

•    Increasing the cash value of the policy by reinvesting the dividends

•    Purchasing additional paid-in-full riders that actually increase the face value of the policy

•    Paying the insurance premiums on the policy itself once dividends reach a specified level

•    Providing an additional source of income

How dividends are used is decided by the policyholder and the type of policy purchased.

However, the benefits don’t stop there.

Dividend-paying life insurance policies are typically exempt from lawsuits and even bankruptcy proceedings, although it’s a good idea to check with your state agency first.

They may also provide an excellent alternative to high-cost bank loans. Depending upon the available cash balance, it is often possible to secure a low-interest loan against the insurance policy, then pay back the loan with interest in a method convenient to your specific financial situation.

Will Your Health Insurance Cover Cosmetic Surgery?

Elective surgery is considered to be a choice by either the patient or his or her doctor. Although the procedure may be beneficial to the patient, it may not need to be done at any particular time.

There is a fine line in determining whether a particular surgery will be covered by a health insurance plan.

However, in most cases, unless a procedure is considered reconstructive, such as following an accident or injury, or when the patient’s life is at risk without the cosmetic operation, few health insurance plans will cover these expenses.

Many health insurance policies will even exclude the cost of treatment for medical complications that arise as a result of an elective surgery procedure. Examples of reconstructive surgery include eyelid surgery performed to correct drooping eyelids that cause vision problems or facial surgery performed to balance appearance if caused by paralysis or to treat deformities.

Some health insurance companies may cover cosmetic surgeries if it can be proven the procedures will improve the insureds’ health. For example, if a doctor can prove that a breast reduction will help a patient to eliminate back pain, the procedure may be covered.

For operations that are purely cosmetic, there are alternative insurance options that can help to pay costs. Some procedures covered by such plans include liposuction and face-lifts. These plans may be costly, but they can help reduce the out-of-pocket cost of various procedures.

How to Reduce the Risk of Household Claims

Prevention really is the best policy when it comes to reducing the risk and cost of household-related insurance claims. Fortunately, thanks to new technology and the help of a few tried-and-true old-timer tricks, it’s easier than ever to prevent a small problem from growing into a major catastrophe. Following is a checklist to get you started:

1. Security and Surveillance: Security comes in all shapes and sizes, including dead bolts, entry alarms, complete electronic household security systems, and even motion-activated lighting and recording devices that can be remotely controlled. Perform a quick review of the house and surrounding yard to ensure secure access at every entry point.

2. Alarms and Alerts: Fire alarms are fairly standard in most homes, but far fewer people have taken the time to install other valuable alarms or alert systems that can save property and even lives. Carbon dioxide and natural gas detectors, radon detectors, water/moisture leak detectors, and even thermal leak detectors provide early notification of common household problems.

3. Prepare and Practice: Flashlights, battery backups, automatic shutoff valves and other basic emergency equipment contribute little if members of the household don’t know how to use them. Have a process in place and practice age-appropriate responses for commonly encountered situations. Not only does having a procedure in place help ensure an orderly response during times of trouble, but it reduces the possibility of accidental injury and further property damage.

4. Quick Fixes: The final step in reducing the risk of household claims is to ensure the safety and security of visitors and household members by doing a quarterly evaluation of property maintenance and quick fixes. Remove clutter and provide nonslip surfaces for steps and walkways, evaluate plumbing and electrical systems to ensure proper performance, and take care of any areas of the home that show signs of excessive wear or deterioration. Not only will proper maintenance reduce the risk of many common claims, but it keeps your home looking its best throughout the year.

Why Good Photos Can Help With Your Insurance

A photographic inventory is helpful in the event of an insurance claim, but it’s important to get it right.

A photographic inventory does more than simply jog the memory and prove you actually owned the product. It also provides important information about condition and value and even helps in establishing replacement value in the event an updated appraisal is required.

Learn how to show it rather than blow it, with the following quick tips:

1. Plan Ahead: Keeping good records is critical to a good inventory, and the more the merrier. If possible, obtain a copy of the blueprints to your home along with receipts for major appliances, improvements and other additions. Permits, bid sheets and photographs all assist in documenting the condition of the home or belongings at the time of the claim. Be sure to include general photographs of the home as well as close-up pictures of personal belongings, including jewelry, electronics and other valuables.

2. Light Up Your Life: Photographs are a great idea, but only if the quality of the pictures is adequate. Take photographs during daylight or invest in a good flash to ensure that enough detail is visible. It’s also a good idea to take several photos from various angles.

3. Share and Save: Make copies of the photographs and store them in a safe location. Safe-deposit boxes and online storage are popular options. Send a copy to your insurance agent for safekeeping, but be sure to revise and update annually in order to ensure the latest acquisitions are included.