Illinois On The Brink of Workers Compensation
Reform
The Illinois
House passed HB 1698, the Workers Compensation
Reform bill, on June 1st. Having already
cleared the Senate, the bill now goes to the
Governor who is expected to sign it.
The
bill is aimed to make Workers Compensation more
affordable for Illinois businesses. Illinois
is currently among the most expensive Work Comp
states in the nation, and benefits are extremely
favorable to employees.
Here
is a synopsis of some of the key provisions of the
bill. Among them:
- Employers
can utilize a preferred provider organization to
provide medical services at more favorable
rates. Employees do not have to use a
doctor within the preferred provider program,
however.
- Lifetime
wage differential payments are eliminated.
Employees will now receive wage differential
payments during their work career to the age of
67 or five years, whichever is later.
- Reduces
carpal tunnel syndrome payments from an average
40 weeks award to a maximum of 28 weeks.
- A
number of new fraud provisions are added,
including the establishment of criminal
penalties based on severity of crime starting
with misdemeanor up to a Class 1 felony.
- Changes
the rules for workers injured while under the
influence of illegal drugs or alcohol. No
compensation shall be payable if the employee's
intoxication is the proximate cause of their
accidental injury.
It
remains to be seen how this will affect the
underwriting of workers compensation
policies. Under another provision of the new
bill, the Illinois Department of Insurance is
required to submit an annual report to the
Governor and key legislators on the state of the
Work Comp market. To generate this report,
it's expected that significant additional data may
be required from workers compensation
insurers. But it's not clear what additional
information may be needed to underwrite a
policy.
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Illinois Mine Subsidence Changes
coming July 1st
Illinois has had a long
history of mining across a good portion of the
state. Occasionally, these old mines will sag or
collapse, capable of causing significant damage to structures
above.
Because
of this, Mine Subsidence coverage has been
something for you to consider carrying on your
property insurance policy. Typically, the
amount of Mine Subsidence coverage you carry would
be equal to the property limit you carry on your
residential or commercial structure.
However,
since 2008, the maximum limit available under the
Illinois Mine Subsidence Fund is capped at
$750,000 on residential property and $350,000 on
commercial structures. If your commercial
building is worth $500,000, your options to cover
that $150,000 difference between the amount of
coverage you need and the amount of coverage you
can buy were difficult to buy and fairly pricey if
you could find coverage.
Effective
7/1/2011, the maximum amount of coverage available
on commercial buildings will be raised to $750,000
under the Illinois Mine Subsidence Insurance Fund
(IMSIF). However, because the increase was
legislated into effect, policies with a gap
between the property limit and the mine subsidence
coverage limit will not increase until the next
renewal.
If you're among
those impacted by this and are wondering if your
coverage can be endorsed to reflect the higher
limit available, the answer is yes and no.
We have checked with our property insurers and
they've all told us the same thing - the IMSIF,
who handles the reinsurance of mine subsidence
coverage for all insurers in the state, won't
process mid-term endorsements. However, if
you want to, coverage can be cancelled and
rewritten after July 1st to get the higher limits
available on Mine Subsidence. This typically
won't cost you much, if any, additional money, but
you would have to come up with another
downpayment. |
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Spotlight On: Utility Services
Coverage
It's been a brutal year for
storms already with nationwide damage
estimates in the range of $13 to $15 billions,
about four times the amount in a typical
year. Storm season is always a good time to
review a key coverage for businesses called
"Utility Services - Time Element."
Business Income coverage in the property
portion of a policy is triggered by direct
physical damage to the insured premises. The
direct damage has to be severe enough to prevent
the business from normal operations. Once
triggered, Business Income will usually have a
deductible stated in hours (ranging from 12-72,
depending on the carrier). The deductible is
retroactive, so if you incur severe enough damage
and the policy had a 48 hour deductible, then
coverage will start with the 49th hour.
Business Income coverage covers the loss of net
business income plus ongoing expenses while your
business is shut down.
A problem arises though, when a business is
shut down due to an off-site power
failure, such as damage to a sub-station or downed
power lines off of your premises. In cases
like these, there is no "direct" physical damage
to your business. This is when Utility
Services coverage becomes key.
Utility Services (sometimes called Off
Premises Power Failure in some policies) is
coverage for a loss due to lack of incoming
electricity (or other utility, such as
communications, gas or water), caused by damage
from a covered cause to property away from the
insured premises such as power stations,
sub-stations, lines and transformers. It's
not provided in a standard policy form, but is
often available by endorsement. Utility
Services Interruption coverage endorsements vary
widely as to what utilities are included, whether
both direct damage and time element loss are
covered, and whether overhead transmission lines
are included.
Claim settlements are based on your sales,
less the cost of the goods you sell, ordinary
payroll and continuing expenses. You may be
able to recover .30 to .45 cents on the
dollar. While that may not sound like much,
it's better than nothing, and with this economy,
every little bit is crucial.
As usual, you should read your policy to
verify what coverage you do and don't have.
This could be a very helpful coverage for your
business that you may not have any idea if you
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Avoiding Heat Exhaustion
and Heat Stroke
Unless you're part lizard, this is a pretty
miserable time of year to be working outdoors in
many parts of the Midwest. Mid-nineties heat
and high humidity seem to choke the oxygen out of
your lungs and leave you drenched as soon as you
walk outside.
When working outdoors in hot weather, workers
who do not take precautions can suffer from heat
exhaustion or heat stroke. Heat exhaustion
is caused by prolonged exposure to high
temperatures and inadequate fluid
replacement. Heat stroke is the most severe
of heat-related problems. It is potentially
life threatening because the body's normal
mechanisms for dealing with heat stress, such as
sweating and temperature control, are lost.
The following are the symptoms of these ailments
and the steps needed to help the victim.
Heat Exhaustion
Symptoms:
The first signs of heat exhaustion are
dizziness, weakness, headache, blurred vision,
nausea and staggering. The face becomes
pale, there is profuse sweating, weak pulse and
respiration is low. The victim can fall
unconscious.
Treatment:
When someone shows symptoms of heat
exhaustion, immediately transfer that person out
of the sun and into a shady or air-conditioned
location. Have the person lie down and keep
calm. If the victim is conscious, have him
or her drink cool water or a sports drink (which
will replace lost salts) and have the victim drink
frequent, small sips. Do not give any
beverages containing alcohol or caffeine.
Monitor the victim closely. Heat exhaustion
can quickly become heat stroke. If symptoms
persist, call a doctor.
How to Avoid:
Keep fit and take frequent breaks. Stop
to rest when you start feeling weak.
Increase dietary salt and fluids when working in
extremely hot weather. Avoid beverages
containing alcohol or caffeine, as these can
dehydrate you further. Use hats and wear
light-colored clothing.
Heat Stroke
Symptoms:
The victim develops a severe headache, the
face is red, the skin is hot and dry, there
is no sweating, and the pulse is strong
and very rapid. The person has a
high fever (105-106 degrees Fahrenheit) and
may become unconscious. Following the fever,
there may be confusion, convulsions, coma or even
death.
Treatment:
Call 911 immediately, getting the victim
professional medical treatment as soon as
possible. Place the individual in a room
with air conditioning or move him or her to
shade. Loosen the clothing and cool the
victim with the best means available.
Follow emergency services directions.
More Information:
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If Home Prices are Down, Why Isn't
Your Insurance?
We get this question quite a bit - the
housing market is in the toilet and your home
value is probably less than it was a few years
ago. In some instances, it may even be a
fraction of what it was. But why is your
homeowners premium still the same, or even up
slightly?
The biggest reason lies in the difference
between Market Value and Replacement Cost.
Market Value is what you could sell your home
for. Replacement Cost is the dollar figure
it would take to rebuild your home, just as it is,
brand-new from the ground up. These two
numbers are often far, far apart. The reason
your homeowners premiums aren't down
like home values, is because the
supplies and labor to reconstruct them aren't
going down. If anything, they continue to
inch upward in price.
The price of homeowners insurance is
based on the cost to repair or rebuild your
home. Even though the recession has been
hard on the housing market and construction
industry, the cost of the materials hasn't seen a
decrease.
We use a company called Marshall &
Swift/Boeckh to compute replacement cost
valuations for residential and
commercial buildings. They are recognized as
leaders in the real estate market for providing
building cost data. Their raters are updated
quarterly with new information about the cost of
building materials and labor in different sectors
of the United States ( view a sample). We enter
the characteristics about a particular structure -
location, size, construction type and quality,
number of floors, basement information, roof type,
number of kitchens, bathrooms and other interior
characteristics ( sample form) and it spits
out a Replacement Cost estimate. This
estimated figure is what your home should be
insured
for. | |
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Wedding Insurance: Is It Worth
It?
One
of our companies, Travelers Insurance, offers a
nice little insurance package for
weddings. With many smaller ceremonies,
you may not have much invested. But, having
been to a few weddings that cost more than a small
house, some folks go all out for their big
day. Wedding insurance might not be such a
bad consideration.
On
the page that's linked to above, Travelers has a
quick, 10-question summary to help you determine
if you may want to take a closer look at insuring
your wedding. Some of the mishaps you can
protect yourself from include:
- Postponement
due to family illness, untimely deaths, and
travel delays
- flowers
and wedding photography that failed to arrive
when promised
- bakers,
caterers, bridal boutiques and wedding venues
that went out of business
- no-show
photographers and DJs
- Lost
or damaged wedding rings, dresses and attire
- damaged
wedding cake, spoiled food, and other glitches
in catering and entertainment
If
this is something you'd like to look into further,
you can start quoting your wedding insurance
package on our website, right here.
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Be sure to add our email address to your
contact book to ensure that you continue receiving
industry updates, informative articles and tasty
tidbits.
Sincerely,
Bret Dixon Insurance
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| Auto Rate
Decrease |
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We offer a
full-line of
personal lines coverages for your home, auto, boats,
motorcycles, RVs, and more. Give us a shot
at your next renewal to see how we compete.
Click here for more
information.
One of our
companies, Travelers, announced over the weekend
that a large group of territories were getting a
10% rate decrease on their Auto rates. Check
with us to see how we stack up to your current
coverage.
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| Carrier
Corner |
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We
represent over 15 insurance carriers and have
access to many more via brokers, but you may only
know one or two that we deal with. Each
issue, we'll highlight one of our valued
partners in
this space.
Conifer
Insurance
Conifer is a B++ ("Good")
rated company based in Michigan, and the newest
addition to our stable of insurance
companies. Among states we do business in,
they are currently available in Illinois and
Indiana. They have a fairly narrow appetite
for commercial risks, focusing on the hospitality
industry, which is why we viewed them as a good
partner for our Agency. As we further
acclimate ourselves to their coverage packages and
exact appetite, some of you in the hopitaliy
industry may start seeing their name a bit
more. | | |
