Additionally, you want to know something about the company’s track record when it comes to paying claims and overall customer satisfaction. Not all insurance companies are the same and you should take a hard look at your prospective insurer before handing over a big premium check.
How can you find this information? Well, it’s easier than you think because there are several major companies that rate insurance companies. Each offers a detailed rating service and most of these services are free. The rating system for each of these rating companies is based on a letter grade system such as “AAA”, through “NR.” However, you should note that there are both subtle and significant differences in the letter grade system. A “C” rating might mean an average score for one rating company but might also suggest the insurance company is experiencing significant financial challenges with a different insurance rating company. Make sure you fully understand the rating system for each of the companies before jumping to an erroneous conclusion.
Some rating companies only rate the top 200 insurers, while others offer more comprehensive data.
Here is a brief summary of the major companies which rate insurance companies.
A.M. Best – www.ambest.com
This rating agency is the only one which specializes in banking and insurance companies, reinsurers and covers the total insurance market spectrum including international markets such as the U.K and Canada. Also offers a comprehensive article base and in depth commentary.
Fitch Inc. – www.fitchratings.com
Provides a global rating service on insurance products through combining both local and international expertise on contemporary insurance issues and trends. Also offers a monthly newsletter dealing with specific insurance issues called “Insurance Insights.”
Moody’s Investor Services – www.moodys.com
You have to register to log in with this company before you can access their info. Covers title insurers, life, mortgage and property and casualty. Mainly focused on the financial health and outlook of insurance companies and overall realm of the financial market.
Standard & Poor’s – www.standardpoors.com
Must be a subscriber. Offers international rating services on property and casualty, life, annuities, health, title, mortgage, bond and reinsurance. Rating services include link market solutions and both the derivative product and financial subsidiaries.
Today, the troublesome situations created by employees suffering from addictions do not just apply to the usage of heavy machinery. Employees also have access to sensitive information about the company. This information when improperly handled leads to gaping liabilities that can exact a high toll on businesses.
The prevailing wisdom about alcoholic or drug-dependent employees is that they can be found in businesses of every size and more importantly every kind. Research actually reveals a different picture: employees with alcohol- or drug-related problems tend to seek out smaller businesses with no formal written policy prohibiting drug or alcohol consumption. This research would seem to explain a seeming disparity. The total population of illicit drug users is estimated to be just under fifteen million. Of those, 77% are employed. However, of heavy drinkers who are employed, just 17% work for companies that have employee rosters of five hundred or more.
Therefore, the best way to protect the workplace from alcoholic and drug-addicted employees is to instill a strict company policy against substance abuse combined with a drug- and alcohol-free program. Obviously each company must implement this program and policy in their own way due to their idiosyncratic circumstances, but there are five components that any program must have in order to succeed: drug and alcohol testing, employee education, employee assistance, the policy itself, and supervisor and manager training.
As each company takes the first steps towards setting up this program, the key element needs to be the formal written policy. In addition, the written policy should be displayed in as many areas as possible to remind employees of their responsibilities. Businesses must make it clear to their employees that the reasoning behind their adoption of this policy and program is for their employees’ benefit, in addition to preventing profit loss or liability resulting from employee injury. The written policy must include a description of prohibited behaviors and the consequences for engaging in those behaviors, set down in clear, understandable English.
Supervisor and manager training is necessary due to the influence and direct interaction supervisors have with their workforce. It is important to make a distinction between roles: supervisors are not meant to diagnose substance abuse problems, but their training should emphasize how to recognize poor employee performance and the possible symptoms of substance abuse, as well as where to refer employees for help. As for employee education, employees must be made aware of the personal and professional consequences of addiction as well as the specifics of the company’s policy and program efforts.
When starting a drug testing program, due to the multiple legalities involved, the Department of Labor recommends getting legal counseling before implementing a drug testing program. Finally, through the Working Partners for an Alcohol- and Drug-Free Workforce, the DOL has set up many resources in order to help American businesses achieve the goals of helping employees end their substance abuse. These resources may be found at www.dol.gov/workingpartners.
Why did the employer’s insurance not pay for a discrimination claim? Because the employer took too long to submit it.
A typical policy requires the insured to give the insurer notice of any claims made against it “as soon as practicable.” In the Texas case, the policy went further -- it required written notice to the insurer “as soon as practicable and in no event later than sixty (60) days after such Claim was first made.” The insurer maintained that Butler made her claim in July 2001, when she filed complaints with authorities. As evidence, it cited the policy’s definition of a “claim” as “any judicial, administrative or other proceeding against any Insured for any Employment Practices Wrongful Act.” Since the complaints filed with the authorities initiated administrative proceedings, the insurer held that they also constituted a claim. In the insurer’s opinion, the policy did not provide coverage if the employer did not give notice within 60 days of when Butler filed the complaints.
The employer argued that, since it notified the insurer within 60 days of receiving notice of the lawsuit, it had complied with the policy’s conditions. However, the court agreed with the insurer.
Insurance companies do not include this language in their policies simply to get out of having to pay claims. The sooner they know about events that might involve coverage, the better they can investigate and prepare legal defense. As time elapses, witnesses’ memories become less reliable, or witnesses might move away, and memos, e-mails, and other types of evidence might become hard to find. Also, a claimant who has been kept waiting for a length of time might become angry and unwilling to negotiate a settlement. Therefore, even without a firm 60-day deadline, an insurance company might deny coverage when the insured fails to give prompt notice of a claim.
Courts have not developed a standard for what is “prompt” notice, but they normally consider three questions: How long was the delay? What are the reasons for the delay? How does the delay affect the insurer’s ability to handle the claim? Sometimes, a court will excuse a late notice if it decides the insured had a reasonable basis for believing it was not liable for any harm. However, in a situation where an employee has filed complaints with authorities, the court might not agree that such a belief was reasonable.
The safest course for employers is to notify their insurance companies or agents as soon as they become aware of any type of employee complaints to outside authorities. Even if the employer believes the charges to be groundless, it should put the company on notice. Our professional insurance agents can advise you on what the policy requires it to do when a charge is made. The best time to have that discussion is before something happens.
The stagnant economy is pressuring them to take on more and more work while cutting costs - a recipe for mistakes that's leading more and more dissatisfied customers to demand restitution, often through the courts. Such a mishap can cost a contractor thousands of dollars in materials, labor, and lost time (not to mention the loss of potential future income from the customer, damage to the professional reputation of the business, etc.).
Chances are that the artisan's General Liability policy, which pays for damage to property, won't pick up the tab: Coverage usually doesn't apply for "wrongful acts" by the policyholder.
General contractors and other major players in the construction industry can protect themselves against this exposure by buying Contractors Errors & Omissions (E&O) insurance. However, this coverage is costly and has been unavailable to most types of artisans.
Not to worry: More and more insurance companies are providing E&O policies tailored to the specific needs of artisanal contractors (ranging from carpenters to septic tank cleaners).
This type of risk protection in today's "litigation culture" can make life easier for artisans as a resurgent economy and population growth triggers a growing demand for their services.
If you'd like more information on Contractors E&O, please feel free to get in touch with our insurance professionals.