What to consider when choosing a medical provider for workers' compensation injuries

Workers’ compensation covers benefits for your employees if and when they are injured on the job. It can provide flexible compensation for things like doctors’ appointments, surgeries, physical therapy, medications and other treatment.

When it comes to treating work-related injuries, selecting the right doctor is paramount and can make all the difference when it comes to helping an employee return to work quickly. However, there are a number of considerations and specific guidance when it comes to selecting a medical provider for workers’ compensation injuries.

Selecting the Treating Doctor in a Workers’ Compensation Claim

When it comes to connecting an injured employee to the care they need following a covered injury, it’s important to remember that every state is different and has unique rules. Failing to follow these rules can lead to an insurance company’s refusal to pay for treatment.

When it comes to injuries covered by workers’ compensation, all states allow employees to receive emergency care from the nearest facilities when needed. 

Outside of that, rules related to choosing a medical provider vary by state and generally fall under one of three options:

  1. The employer chooses the treating doctor on behalf of the employee—In some cases, employees must use an employer-selected treating doctor for work-related injuries. This can help employers reduce costs and better manage workers’ compensation claims. 
  2. The employee chooses a doctor from a list or medical network provided by their employer—Some states allow employers to go through a preferred provider plan, network or managed care organization to treat an employee’s work-related injuries. Through this method, employees must select a treating doctor who is within the specified network. 
  3. The employee chooses any authorized doctor—Some states allow employees to choose their own treating doctor, particularly if an employer doesn’t have a preexisting provider plan or partnership with a managed care organization. Other states do not dictate who the employee sees for treatment at all. Also, employees typically aren’t allowed to use holistic or alternative medicine providers. Furthermore, there may be specific requirements employees must follow in order to receive care. For instance, an employee may be allowed to use their own primary care physician for a work-related injury, but only if they first give their employer written notice. 

Each of these options has its own set of unique benefits and drawbacks. Employer-selected treating doctors can save organizations money and simplify the workers’ compensation claims process. However, when an employer limits or chooses what doctor an employee is allowed to use for work-related injuries, employees may feel as if there is a conflict of interest at play. It’s not uncommon for injured employees to worry that employer-selected treating doctors—whether they are chosen directly by an employer or by the employee via an approved list—don’t have their best interests in mind. In other words—whether justified or not—an employee may be concerned that an employer-selected doctor is more focused on saving the employer money and not on treating their injury.

For employee-selected treating doctors, conflicts of interest are no longer a concern. However, the employee-selected doctor may not be familiar with the workers’ compensation process, which can complicate treatment and extend the return-to-work process.

Finding the Right Treating Doctor

Regardless of whether or not treating doctors are chosen by employers or employees, selecting the right care provider is crucial. The following are some considerations employees and employers should keep in mind:

Again, rules related to choosing a medical provider for workers’ compensation injuries are complicated and vary from state to state. To navigate these requirements effectively, be sure to work alongside qualified insurance and legal professionals.

Witkemper Insurance Group and Financial Services provides choice, flexibility, expertise, superior protection. Contact us for a quote or guidance for your business.

Get to know Witkemper

Since 1984, Witkemper Insurance Group and Financial Services has served Indiana businesses and families with the highest level of expertise. Kyle Nichols, owner and president of Witkemper, talks about the company's values and goals. View the video or read the transcript below.

Announcer: I'm here with Kyle Nichols, owner of Witkemper Insurance Group in Indiana, and Kyle, tell us about Witkemper's role as an agency here in Indiana?

Kyle: Yeah, great question. I think our number one role as an agency is really to be that trusted partner to our clients. We are here to protect all the hard work they put into their business. And our job is really to form a partnership to develop a long and short-term strategy to not only help control their costs but also to protect their most valuable asset, which is certainly their business and their employees.

Announcer: Thanks for sharing that. With so many insurance agencies in the state, what makes Witkemper different?

Kyle: Sure, another great question. I think, without a doubt, our number one difference maker among our peers is our staff. Clients can buy the same products we sell from so many different agents across the state of Indiana. However, the longevity, our years of experience, the honesty, integrity, and overall character of our team is really the true difference-maker that blesses us with outstanding client retention. Furthermore, relationships do begin and are formed with our sales team. Putting the boots on the ground on a daily basis, forming these relationships, and turning prospects into long-term, customers with both of our sides working together and achieving the same goals, our clients truly are the ones that reap the benefits of this.

Announcer: Tell us why you think customers choose Witkemper Insurance Group.

Kyle: I think if you if you go back to the first couple of points we discussed as far as our role as an agency and what makes Witkemper different, you know, it goes back to being that trusted advisor, right? In recognizing the importance of developing trust as one of our customers' key business advisors. That's why they hire us to manage their risks, to protect their business, and certainly help control their costs. Along with those key different factors we discussed being our staff, providing the best possible service with hard work, honesty, and integrity. I think all this adds up to why our customers at the end of the day decide to choose Witkemper Insurance Group as their partnership.

Get an insurance quote or learn more about services offered by Witkemper Insurance Group.

Common Employment Practices Claims Arising Out of COVID-19

As COVID-19 continues to spread throughout the United States, there has been a massive upheaval of the American workplace. Employers have found themselves drafting and implementing policies and procedures addressing a wide array of issues including remote work, layoffs, furloughs, pay cuts, workplace conditions and many more. Not surprisingly, the uncertainty wrought by COVID-19 has left employers at an increased risk of exposure to employment-related claims alleging wrongful termination, discrimination, retaliation and many others.

This Risk Insights piece will serve as a guide to the most common potential causes of action related to COVID-19 that may lead to employment-related litigation. As is the case with all inherently legal issues, employers are strongly recommended to seek the guidance of legal counsel when faced with any of the claims discussed herein.

Workplace Health and Safety

There have already been a multitude of safety violation claims filed under the Occupational Safety and Health Act (OSHA) and state equivalents. These safety violations typically allege that an unsafe workplace has caused sickness and/or death due to COVID-19, or that an employer failed to take appropriate measures to reduce COVID-19 exposure and spread within the workplace. Such “appropriate measures” might include failure to provide hand-washing stations, sanitizers, masks or adequate protective gear on location. Other claims have alleged that employees have been unable to practice social distancing due to the nature of their jobs.

Leave Claims (FMLA and FFCRA)

In addition to traditional paid and sick leave, COVID-19 spurred the passing of the Families First Coronavirus Response Act (FFCRA), which includes the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. The FFCRA requires employers with 500 or fewer employees to give employees expanded paid family and medical leave, and emergency paid sick leave. Without analyzing the unique provisions of the FFCRA, it must be noted that the Act expressly incorporates existing Family and Medical Leave Act (FMLA) and Fair Labor Standards Act (FLSA) remedies provisions. This means that an employee who is wrongfully denied expanded leave or not paid during the leave will have a cause of action to recover damages (lost wages, salary, benefits and other compensation) or actual monetary losses resulting from the denial of leave (e.g., the costs of child care), with interest. Likewise, employers that fail to comply with the Expanded Paid Sick Leave Act will be made liable to remedy provisions under the FLSA. 

Given the extensive exposure, employers should consider speaking with legal counsel in order to update and implement leave-related policies. Employers might also consider training their managers and supervisors on updates to the policies and laws, as they will be on the front lines when dealing with leave-related issues.

Wage and Hour Claims

With employees being asked to work from home, and employers restructuring their workforce (including salaries and compensation) to fit their current needs, it’s vital to remember that this reshuffling can give rise to claims under the FLSA and applicable state laws related to salary and hours reductions. Altering work arrangements and compensation structure may be necessary to keep some organizations afloat, but such changes may inadvertently alter the classification status of their workers. Such classification issues may lead directly to an FLSA claim.

Discrimination Claims

Numerous federal and state laws protect employees from discrimination based on protected class characteristics. Laid-off or furloughed employees may bring claims under federal and state anti-discrimination laws, challenging the purported reason they were selected for an adverse employment action. Employers should be careful to use objective means when deciding which employees to lay off or furlough. They will also want to retain records of the criteria used, and, in certain instances, evaluate whether any disparate impact may result from the decision.

Employees might also bring a claim based on an employer’s failure to reasonably accommodate employees with a bona fide disability related to COVID-19. Such claims might even be based on a denial of a request to allow an employee to work from home. 

Retaliation Claims

Most state and federal laws contain provisions that make it unlawful for employers to retaliate against employees who exercise their protected legal rights or oppose unlawful employer actions. For instance, there have already been numerous claims that allege retaliation for objecting to unsafe working conditions and exposure to individuals with COVID-19 symptoms in the workplace. Other retaliation claims may arise out of an employee complaint that the employer wrongfully denied a request for leave. 

The most important practice in insulating your business from a retaliation claim is documentation. Extensively documenting the employer’s reasoning behind their employment decisions can be the difference between a successful retaliation defense and a costly judgment.

Wrongful Termination Claims

With the major increase in employee furloughs and layoffs, it is no surprise that there has been an increase in wrongful termination claims. Wrongful termination claims can arise out of a multitude of COVID-19-related issues. One example is a claim that the employee was terminated for complaining about a lack of personal protective equipment. Another example would be a claim that the employee was terminated for lodging a complaint about co-workers with COVID-19 symptoms reporting to work.

To mitigate the potential for a wrongful termination claim, employers should proceed carefully upon receiving employee complaints. Employers should also maintain meticulous records of complaints, the investigation process and the ultimate reasoning behind the termination.

Disclosure of Confidential Information Claims

Because the Centers for Disease Control and Prevention (CDC) and state/local health authorities have acknowledged community spreading of COVID-19 and issued precautions, employers have been allowed to measure employees' body temperature. However, this newly expanded testing capability exposes the employer to an array of privacy-related issues.

In order to maintain the privacy of COVID-19-related medical documents, the ADA requires that all medical information about a particular employee be stored separately from the employee's personnel file. An employer may store all medical information related to COVID-19 in existing medical files. This includes an employee's statement that they have the disease or suspect they have the disease, or the employer's notes or other documentation from questioning an employee about symptoms.

Conclusion

These are just a few examples of the most common types of claims that may arise as a result of COVID-19. It is imperative that employers are aware of these potential issues and proceed accordingly. Moving forward, employers should consider the following:

  1. Develop a return-to-work plan that contemplates federal and local safety guidance (e.g., CDC, OSHA, and state health authorities) on personal protective equipment, workspace hygiene, social distancing measures, and many others.
  2. Consult with legal counsel when implementing (or updating) policies and procedures to ensure compliance. Ensure counsel is also present when undergoing recall, rehire, and job offers, as this stage is the epicenter for multiple employment-related claims.
  3. Ensure that those policies and procedures are implemented in a fair and equal manner. 
  4. Ensure proper communication to all employees, particularly the line managers who will be responsible for implementation.
  5. Maintain the confidentiality of all medical-related information provided by employees in compliance with federal and state guidance.
  6. Train managers and supervisors on new policies and procedures drafted in the wake of COVID-19. 
  7. Regularly monitor new federal, state, and local guidance, as well as legislative enactments. 

Contact Witkemper Insurance Group today for more risk management guidance.

Communicating Terminations Effectively

Losing a job is a traumatic event for most and may trigger anger, humiliation and sadness. Some employees who are otherwise calm, rational individuals may react negatively to termination or challenge the decision. Yet, if terminations are handled appropriately and with respect for all parties involved, the process should be smooth. In addition, the employees who remain employed at the company will not feel threatened or have negative emotions towards the employer.

Communication Strategies

The following are strategies employers can use to communicate terminations effectively:

Avoiding Lawsuits

At times, employers can be faced with legal headaches as a result of statements allegedly made during terminations. To avoid these lawsuits and protect your organization, always have two staff members present when terminating an employee. That way, one of the employees will serve as a witness to what occurred during the confidential meeting. It is also wise to avoid extensive conversation with the terminated employee, as most suits arise as a result of the statements made during the actual termination and the reasons for which the person was let go. Though minimal discussion about the reason for termination is unavoidable, keep this conversation short. 

Communicating terminations is one of the least enjoyable responsibilities that many individuals hold. Management-level employees must make protecting the organization a primary priority while also trying to respect the employee being terminated. Balancing both of these responsibilities will yield the best results, both for the organization and the employee.

Contact an insurance specialist at Witkemper Insurance Group and Financial Services today to answer any questions about employee relation or employee benefits.

The Importance of Communicating With Employees During Workers’ Compensation Claims

Employees who face work-related injuries and illnesses commonly have subsequent stress and anxiety. Oftentimes, this stress is made worse should employers stop communicating with the employee while they’re unable to work.  

It is important for employers to make their employees feel appreciated and to invest in their well-being. This rapport helps employees feel welcomed, valued and trusted. As a result, if employees are injured at work, they are much more likely to report accidents and injuries. 

Furthermore, lack of communication with employees can increase their workers’ compensation claim costs. Injured employees are more likely to hire attorneys if they have a poor understanding of the workers’ compensation claims process and a nonexistent relationship with their employer. Employers can avoid this by forming trusted relationships with their workers and creating an environment where the lines of communication are open. It is important that employees feel supported, particularly following workplace injuries. This shows employees they are valued and, at the same time, reduces their workers’ compensation costs.

When Should the Communication Begin?

As a part of the onboarding process, employees should be trained on what to do in the event they experience a work-related injury or illness, including what the organization’s workers’ compensation protocols entail. 

Employers should discuss how to report an injury and inform employees that communications will continue throughout the course of treatment of that injury. By setting expectations upfront, employers can facilitate ongoing communication, which helps foster these important relationships. 

From the moment a workplace injury occurs until the injured employee returns to work, employers and employees should be able to communicate with each other. In general, following an injury, communication begins with employers, and they should:

Follow-up Communications

At least every other week, employers should reach out to injured employees to check in on them. Key times to touch base include after surgery and scheduled treatments. It’s important to reassure injured employees that you are looking forward to their return.

Employers should also reiterate to employees that they’re there for them if they need help. By regularly following up with the employee, employers can determine how far along their employees are in their recovery process.

Employers will want to provide updates, if they receive them from the employee, to the claims adjuster. This helps keep the claims adjuster in the loop of the employee’s treatment. 

Return-to-Work Assignments

When it comes to returning to work, it’s important for employers to let their injured employees know if they’ll be able to provide light-duty work and to make the necessary accommodations so the employee can return to work as soon as medically possible. Letting injured employees know that their employers are committed to bringing them back to work can help ease any of their anxiety or uncertainty. When employees return to work, employers should check in daily to make sure the transition is going smoothly. Employers should also ensure job tasks aren’t causing the employee any pain, aggravating injuries, or creating new injuries. 

Back to Work Restriction-free

As injured employees return to work and continue to heal, employers can adjust the number of check-ins they have with the employee. Initially, employers should communicate frequently to ensure employees are comfortable and the work isn’t creating any further issues. However, as employees settle in, employers can occasionally check in, making sure injured workers are continuing to improve and able to confidently perform their jobs.

It is important to remember that employers often overlook the simplest way to mitigate claim costs—employee communication. Happy employees are ones who feel valued, and communication is essential to gaining their trust and controlling workers’ comp costs.

Contact an insurance specialist at Witkemper Insurance Group and Financial Services today to answer any questions about Workers' Compensation Insurance or for a free review and insurance quote for Workers' Compensation Insurance. 

Insurance for Business Offices

An office is the primary or only premises for numerous types of small businesses, including, for example, employment, travel, collection, insurance, advertising and other agencies. Electronic equipment and data are vital to the operations of most such businesses. They also have the risk of lawsuits from disgruntled clients or customers.

For many office-based businesses, the most cost effective and efficient way to obtain property and liability coverage is with a Businessowners Policy (BOP) especially tailored to business offices and, in many cases, offices for a specific industry. Though marketed under a variety of names, these policies typically have provisions similar to the property insurance and liability insurance sections of the BOP, with the option to add various other coverages that you may need.

PROPERTY INSURANCE

The BOP covers real estate and other property your business owns. If your business rents or leases its premises, the BOP provides coverage for tenants' improvements and betterments. These are fixtures, alterations, installations or additions that you have put into the space that cannot legally be removed from the landlord's premises.

The BOP includes as part of the basic policy two types of coverage related to electronic data. Computer Operations Interruption Coverage pays for business income lost and extra expenses incurred as a result of many computer problems. Electronic Data Loss Coverage pays the cost to replace or restore electronic data destroyed or damaged as the result of causes of loss named in the policy. These include a computer virus or harmful code. For more coverage there are several endorsements you can choose to add to your BOP. You should discuss what electronic data your business uses with your insurance agent to assure you have the right coverages.

Coverage can easily be added to a BOP for such items as special equipment, fine arts, valuable papers and records or accounts receivable.

One coverage that can be vital to your company's survival in case of disaster is Business Income and Extra Expense Insurance (also known as Business Interruption Insurance). Business Interruption Insurance helps pay ongoing expenses while your business is unable to function after a loss and also helps make up for lost profits. Extra Expense Coverage helps you recover as quickly as possible by paying extras expenses caused by the loss-such as rent for temporary quarters. This coverage may be included in your package policy or it may be an optional addition.

A business office typically receives and processes payments from clients or customers, which can lead to a risk of theft by an employee. You may wish to consider adding Employee Dishonesty Insurance to your coverage.

LIABILITY INSURANCE

Liability risks are part of any business endeavor. A BOP provides a broad range of liability coverages-everything from slip and fall accidents to claims of libel or slander. At the same time, there are liability risks not covered by a BOP.

Should a client or customer sue claiming to have been harmed by something you did or failed to do, Errors and Omissions Insurance is critical for defense and payment of any damages.

BUSINESS VEHICLE INSURANCE

Your personal auto policy probably provides coverage for some business use of your vehicle. A personal auto policy is unlikely to provide coverage, however, if the vehicle in question is used primarily in business. It will not provide coverage for any vehicle owned by a business. For those vehicles you must have a business auto policy.

Should you be driving your personal auto for a business purpose and get into an accident for which you are liable, an injured person could sue you personally. Will your personal auto policy have enough coverage to pay all the damages? If not, a lawsuit may be filed against your business. If you use personal vehicles for business, you want to be sure you have high enough limits to protect your business. You should discuss this with your insurance agent.

WORKERS COMPENSATION INSURANCE

States have varying rules about when an employer must provide workers compensation insurance. If you have three or more employees, you should check with your state department of workers compensation to see if you are required to provide workers comp insurance.

Does Your Business Need Business Interruption Insurance?

Business Interruption Insurance (BII) is an often overlooked insurance coverage that protects against exposures to loss every bit is vital as fire or litigation.  If your business is forced to close your risk is not limited to temporary loss of income, which can be devastating in and of itself.  You also run the risk of losing customers who turn elsewhere for their product or service needs.  You may have difficulty paying key suppliers during an income interruption causing further long term loss as those suppliers sever their business relationship with your company.

Business Interruption Insurance is designed to protect businesses from these types of risk.  BII is often part of packaged commercial insurance policies or is purchased in conjunction with business property insurance.  One reason for this is that the perils, or causes of loss, are usually the same for property insurance as for Business Interruption Insurance.  A variation in BII designed for those enterprises that depend heavily on outside suppliers is called Contingent Business Interruption Insurance.  Loss in business income due to the inability of a supplier to provide goods or services can be insured against in many circumstances.

How much BII your business needs will depend on several factors such as how easily you could continue operations at temporary location and how long your business might be sidelined. You will also need to consider what income is being insured.  It could be average daily, weekly or monthly; income, income for the most recent accounting period, peak income or some hybrid.

BII usually requires a 48 hour waiting period before kicking in and indemnity will be based on the financial records of your business.  So it goes without saying that you will need to keep your records up to date and in a safe place.

Insurance for Small Manufacturers

Although the range of different products manufacturers produce is huge, with only a few exceptions the risk exposures differ more in degree than in kind.

Generally, the most cost effective and efficient way to provide property and liability insurance for your small manufacturing operation is with a Business Owners Policy (BOP). This type of policy offers a package of different coverages for a single premium. Insurers have put together packages tailored to many specific types of small manufacturers. Though marketed under a variety of names, these policies will typically have provisions similar to the property insurance and liability insurance sections of the BOP, with the option to add various other coverages that you may need.

PROPERTY COVERAGE

The package policy covers real estate your business owns. If your plant rents or leases its premises, the policy provides coverage, in the event of a covered cause of loss, for tenants' improvements and betterments. These are fixtures, alterations, installations or additions that you have put into the space that cannot legally be removed from the landlord’s premises.

The policy also covers your other business property—equipment, machinery, raw materials, inventory, etc. The insurer will require you to report periodically on values in raw materials, goods at various stages of production and finished inventory so that if there is a loss, the claim can be settled with correct values.

The basic policy usually includes two types of coverage related to electronic data. Computer Operations Interruption Coverage pays for business income lost and extra expenses incurred as a result of many computer problems. Electronic Data Loss Coverage pays the cost to replace or restore electronic data destroyed or damaged as the result of causes of loss named in the policy. These include a computer virus or harmful code. For more coverage, there are several endorsements you can choose to add to your BOP. You should discuss what electronic data your business uses with your insurance agent to assure you have the right coverages.

The basic policy usually includes two coverages that can be vital to your business survival if there is a disaster: Business Income and Extra Expense Insurance (also known as Business Interruption Insurance). Business Interruption Insurance helps pay ongoing expenses while your business is unable to function after a loss and also helps make up for lost profits. Extra Expense Coverage helps you recover as quickly as possible by paying extras expenses caused by the loss—such as rent for temporary quarters. If these aren’t part of your basic policy you can probably add them for an additional premium.

There are numerous types of property coverage some businesses need that are not included in the basic policy. Among others, these include coverage for theft and burglary, employee dishonesty, mechanical breakdown or property of others in your care, custody or control. Be sure to discuss with your agent what additional property coverages you may want to add.

LIABILITY INSURANCE

Liability risks are part of any business endeavor. A package policy provides a broad range of liability coverages–everything from slip and fall accidents to claims of libel or slander. Probably the most important for the manufacturer is Products-Completed Operations Coverage. This provides for legal defense and payment of damages in the event there is a lawsuit charging that a product you manufactured injured the claimant.

Most package policies exclude any coverage for pollution or environmental damage. Coverage can be added through endorsements.

BUSINESS VEHICLE INSURANCE

Your personal auto policy probably provides coverage for some business use of your vehicle. A personal auto policy is unlikely to provide coverage, however, if the vehicle in question is used primarily in business. It will not provide coverage for any vehicle owned by a business. For those vehicles you must have a business auto policy.

Should you be driving your personal truck or van for a business purpose and get into an accident for which you are liable, an injured person could sue you personally. Will your personal auto policy have enough coverage to pay all the damages? If not, a lawsuit may be filed against your business. If you use personal vehicles for business, you want to be sure you have high enough limits to protect your business. You should discuss this with your insurance agent.

WORKERS COMPENSATION INSURANCE

States have varying rules about when an employer must provide workers compensation insurance. If you have three or more employees, you should check with your state department of workers compensation to see if you are required to provide workers comp insurance.

Source: Insurance Information Institute, www.iii.org

Employment Practices, Risk and Management

A survey of 422 businesses in May and June of 2006* indicated that, for 89% of the participants, at least one new law suit was filed in the prior year. Lawsuits brought by employees, both current and former, has been a litigation growth area in the recent past. And prospective employees who feel they were wrongfully passed over for an employment opportunity are also more likely than ever to bring suit.

There are basically three tiers to protecting your business from financial damage as a result of employment practice claims: Identification of risk areas, Developing and Managing your company’s employment policies and procedures and Insuring against financial loss. It is a good idea to develop a program that incorporates all three.Identification of Risk

Here is a list of exposures to employment practice lawsuits common to most businesses:

This is not by any means an all-inclusive list but it is a good place to start. Inconsistency in handling decisions in these areas and a lack of a documented policy regarding these practices creates a vulnerability to financial loss. Many smaller businesses, who do not have a dedicated human resource or loss control function or in house counsel, are often more at risk because of this lack of dedicated focus.Developing and Managing Employment Practices

Having a written policy in place for hiring, reviews and office conduct is vital. That can seem daunting for a small business but there are resources available for help. Checklists for interviewing, job descriptions and qualifications; performance expectations and measurements; job salary grades, pay for performance plans and performance evaluation procedures are basic documents that, when properly used, can minimize risk of lawsuits in many risk areas. Once completed, these policies, procedures and documents should be reviewed periodically to make sure they stay up to date.

A training program will be needed for managers so they know how to implement the overall program, conduct reviews, provide feedback and document issues. Employee training should cover workplace conduct as well as any changes in job evaluation. Finally, no policy or procedure is very valuable unless it can be demonstrated that it is followed consistently and with uniformity across the company. Development of procedures and policies is only the first step. Training and documentation are also necessary.Insuring Against Financial Loss

Even the most well managed business, with sound, well executed employment practices and excellent overall employee morale can still wind up in court. As a final layer of risk management Employment Practice Liability Insurance (EPLI) is becoming a standard part of many business insurance programs. Broadly speaking, this type of insurance covers claims by employees and job applicants who believe their legal rights have been violated. There are many different kinds of policies that provide differing levels of protection.

One thing all EPLI policies have in common is that they are more affordable when it looks as if your business is less likely to encounter a claim. Thorough identification of risk areas, training and management to address those risks will, as with other kinds of insurance, reduce your overall program costs.

*Litigation Trends Survey conducted by Business Development Directives

Environmental Liability and Your Business

What do real estate firms, golf courses, law offices, banks, farm owners, contractors, dry cleaners and gas stations have in common? Exposure to environmental or pollution lawsuits. Companies that deal with the transfer and storage of hazardous materials, like waste haulers, or fuel oil distributors all have an obvious need for insurance against environmental hazards. But businesses involved in property sales transactions (banks, realtors, lawyers) can pick up the pollution liability that comes along with the subject property. Many businesses use chemicals and substances that are benign, when confined to intended purposes (golf courses, farms, dry cleaners). But improper storage of these materials, inappropriate use, or run-off (pesticides and herbicides) can lead to environmental damage, personal injury and a lawsuit.

Business Owners Policies (BOP) and General Liability policies (GL) broadly define and then exclude pollution damages from coverage. These policies can be endorsed to include some pollution coverage. This approach is inexpensive, but may also be inadequate. Endorsements to GL insurance policies typically define pollution narrowly (sudden and accidental discharge vs. gradual and prolonged seepage, for instance). GL insurance policy endorsements will also usually include constraints for permissible reporting period required for the grant of pollution insurance coverage.

A comprehensive assessment of environmental hazards will take into account more than just substances with the potential to pollute or damage the environment. For instance, mold caused by the improper installation of insulation or application of exterior building materials could result in an environmental claim.

In the fluid and changing landscape that is environmental, or pollution insurance, a number of companies have introduced insurance policies specifically designed to protect a wide range of pollution losses. In many cases, an umbrella policy with high liability insurance limits can be written over the top of these policies.

Does your business have an environmental exposure, and if so, what is the best way to handle it? The place to start is with a professional assessment of your businesses' pollution liability exposures. The assessment will identify the largest, or most likely environmental hazards, and some of these can be reduced or eliminated through risk management - changes in or cessation of certain business practices, training and education, etc. The assessment exercise will also help identify and quantify the elements that should be present in an environmental insurance solution.