Workers Compensation Insurance- Independent Contractors Vs. Employees

January 18th, 2012

The difference between independent contractors and employees is sometimes difficult to distinguish when it comes to workers’ compensation insurance.

California courts and state agencies typically use a number of tests to determine whether an individual is an employee or an independent contractor. A crucial factor in determining employment status is the employer’s right to direct and control the work being performed. If you have the right to control the manner and means of the work performed, the courts have routinely decided that the “independent contractor” is actually your “employee”.

There are many other considerations, but the answer to any one factor does not necessarily determine status. Among them, whether the person performing the service:

  • Has the right to terminate the relationship at will.
  • Is engaged in a distinct occupation or business.
  • Has voluntarily chosen the burdens and benefits of self-employment.
  • Has the skill required in the particular occupation.
  • Supplies the instrumentalities, tools, the work location, and carries the license or certificate required to perform the work.
  • Has the right to hire and terminate others.
  • Is paid by the time worked, or by piece rate.
  • Works under the direction of the employer or by a specialist without supervision.

Other factors include:

  • Whether the services are a part of the regular business of the employer.
  • Whether the parties believe that they are creating the relationship of employer/employee or employer/independent contractor.

If there are questions, the Labor Code assumes a worker is an employee for workers’ compensation purposes. The burden of proof to support the independent contractor status of a worker falls on the employer. The Labor Code also requires that any subcontractor who does not have an active valid contractor’s license be treated as an employee, not an independent contractor. However, even though a worker may have a valid license, the worker may still be an employee depending on the factors as discussed above.

A good rule of thumb: as an employer, always protect yourself.

  • If certain jobs require a license, request a copy for your records.
  • Obtain original Certificates of Workers’ Compensation Insurance addressed to you from all contractors and subcontractors who have employees or who, in turn, subcontract any portion of their work.

If proper documentation is not maintained and presented to insurance auditors, carriers are obligated to charge premium for any liability that may exist under your workers’ compensation insurance policy.

For additional information, a great source to visit is the Workers Compensation Insurance Rating Bureau of California.

Tags: , , , , , , , ,
Posted in Workers Compensation | No Comments »

Loss Assessments: Home or Condo

July 22nd, 2011

If you live in a home in a developed area or subdivision, there’s a reasonable chance that you are a member of a homeowner’s association. The same is true if your pad is a condominium.

Association membership has its benefits. In return, members of the association are sometimes asked to contribute funds to help maintain the integrity/value of the common elements. Those common elements—a garage or clubhouse, for example—are those items of property commonly owned by all members. “Asked” may be too soft a word—such contributions usually are collected through mandatory assessments.

What are some things for which you as an association member can receive an assessment? Good question. The answer is typically found in association bylaws. In some states, laws will have something to say about the extent an assessment can be charged and for what it can be charged. However, such statutes do not exist everywhere.

Here’s another question: If you receive an assessment from your home or condo association, will your home or condo insurance policy help you pay for it?

The answer, well, depends.

Most home and condo insurance policies have very similar language in how they address coverage for loss assessment. There are a few things you will need to know before coverage can be determined.

What Caused the Assessment?
The home or condo policy only will kick in to pay an assessment that is charged to you for a reason that would be covered by your insurance. For example, if the assessment were charged to help cover the cost of damage to the clubhouse caused by a fire, your policy would pay due to the fact that fire is a covered loss under your policy. However, if earth movement damaged the same building, your policy would not pay if earth movement is not a covered loss under your policy.

If an assessment is charged to cover the cost of painting the exterior of the clubhouse simply because the association decided it was time to paint, your coverage would not kick in due to the fact that there has been no covered loss.

Assessments are not only charged to cover claims of damage to common elements. Members also may be assessed for claims of bodily injury or property damage against the association’s master policy. For example:

A guest suffers a permanent head injury after slipping on a damaged walkway. The bodily injury claim against the association is $1.5 million. The association’s policy will cover the injury up to its policy limit of $1 million. The association assesses its members to cover the remaining $500,000.

In this example, your insurance policy would kick in to help pay the assessment. Why?  Bodily injury is covered by your policy.

Which Policy Covers the Assessment?
Your home/condo policy says that it will only pay the cost of assessments that are charged during the policy period. This is important to note because it’s possible that the actual assessment may not be charged until months after the loss causing the damage occurred. For example, say the hurricane happens in August, when Company X insures you. In September, you switch your coverage to Company Y. The assessment for the portion of the hurricane damage that isn’t covered by the association’s master policy arrives in October. Company Y’s policy would kick in as it was in effect when the assessment was charged.

How Much Will My Home or Condo Policy Pay?
Most policies are issued with a limit of $1,000 to cover loss assessments. This limit is the most your policy will pay for a single loss, regardless of how many assessments are charged for it. For example, if the clubhouse is damaged by a hurricane, it’s possible that members may be assessed first to cover the cost of the association master policy’s deductible—and again to cover the cost of the repair that exceeds that policy’s limit of insurance. Since both assessments are charged due to the same hurricane, the total paid by your insurance would not exceed $1,000.

That $1,000 Seems Too Low. Can I Increase My Assessment Coverage?
Yes. Most home and condo insurance companies offer you the opportunity to add more coverage for loss assessments. It’s important to know that while the dollar amount may be increased, the terms of the policy still apply (i.e. you will still need the assessment to be charged due to a covered loss).

If you choose to purchase additional assessment coverage, proceed with caution. Most loss assessment endorsements will still only allow you a maximum limit of $1,000 if the purpose of the assessment is to cover the master policy’s deductible.

Final Note
Loss assessments can be expensive. Having the right home or condo insurance policy to help cover some of the cost could save you big bucks. For more information, call us today.

Source: Trusted Choice

Posted in Auto Insurance, Homeowners Insurance, Personal Insurance | No Comments »

Fireworks And Insurance – Will There Be Coverage

June 29th, 2011

Ahhh the 4th of July, one of my favorite holidays; friends, grilling, patriotic music, and fireworks.  How I remember the evenings at the block parties where the whole neighborhood would get together, play loud music, and set off hundreds of various types and sizes of fireworks.  Of course those were the days when it was legal and you could find a fireworks stand on almost every corner.  Today in many, maybe even most cites, it is illegal to possess or use fireworks.

Each year Americans spend 201 million dollars on fireworks. We cause 20 million dollars worth of property loss and 7,000 people have to go the emergency room.

Of course injuries and property damage means insurance, so how would your home insurance apply.

First be sure you are obeying local laws! Your home insurance policy will have wording excluding liability from illegal acts.  If you shoot your Piccolo Pete on your neighbors shake roof, causing a fire, it is possible that your home insurance would not provide liability coverage.

If fireworks are legal in your city then the property damage or injuries caused by your use of fireworks should be covered under your home insurance policy as long as it was not an intentional act. If you never liked your neighbor’s tree and you use the 4th of July as your excuse to bring it down with a bottle rocket, that would be an intentional act and not covered by insurance.

If you do plan on dazzling your neighbors with your fireworks, here are a few safety tips from the National Council on Fireworks Safety:

  • Obey the law. Don’t use fireworks that are illegal in your state.
  • Keep your pets away from fireworks. Pets have sensitive hearing and the noise can hurt them.
  • Keep fireworks away from children. Every year children lose fingers in fireworks accidents, and even sparklers burn at up to 2,000 degrees, making them extremely dangerous for children.
  • Safety first. Be sure other adults and children are out of range before lighting fireworks. Never throw or point fireworks at others.
  • Always read and follow the directions for fireworks carefully.
  • Use fireworks outdoors only.
  • Use a flat, hard surface like a driveway. Avoid lighting fireworks on grass or in containers.
  • Use an open area. An open area will present far fewer fire hazards. Keep children at least 30 feet away from where you are lighting the fireworks. Explain to children that fireworks are not toys and can cause the loss of fingers or hands.
  • Take it slow. Light only one at a time.
  • Wear eye protection. Don’t put any body part near a lit firework.
  • Don’t use malfunctioning items. Never attempt to relight a “dud.”
  • Have water close by. Have a fire extinguisher, hose, or bucket of water handy for emergencies. Drop used fireworks into a bucket of water.
  • Alcohol and fireworks do not mix. Have a “designated shooter.”

Tags: , , ,
Posted in Homeowners Insurance, Personal Insurance, Torrance Insurance, Uncategorized, california insurance | No Comments »

Auto and Home Insurance for Unmarried Couples

June 1st, 2011

Sixty years ago, when the 1950 census data was released, it showed that eight in 10 households were occupied by married couples. Fifty years later, the 2000 census data showed that number had declined to just over 50%, signifying a sea change in the typical American household. Almost half of households were occupied by a single individual, roommates or unmarried couples (the 2010 census data is still in the process of being made public).

If you are in the “living together but not married” category, you should pay close attention to the language in your home and auto insurance policies that specifies which individuals are covered—in insurance terms, the “insureds.”

HOME INSURANCE

Most standard home insurance policies restrict coverage to a “named insured”—the individual person(s) named on the policy and his or her resident spouse. The policy then extends coverage to “resident relatives,” a term referring to individuals related to the named insured by blood, marriage or adoption (or someone under 21 in your care, such as a foster child) who are residents of the named insured’s household.

This means that a home insurance company has no obligation to cover a non-insured’s liability or to defend that person in a lawsuit alleging liability.

Consider this scenario: A girlfriend and her teenage son move in with the woman’s boyfriend. The son seriously injures another child in a tackle football game at the park down the street. That child’s parents file a suit against the mother/girlfriend.

Unless she has her own separate insurance policy (such as a “renters” insurance policy) or has been added as a named insured on the home insurance policy (which most insurance companies won’t do if she isn’t a relative), she has no coverage.

The problem doesn’t stop with liability. Chances are the girlfriend and her son will also move some of their personal property in with them, but clothes, electronics, school supplies and whatever else belongs to them may not be covered by the homeowner’s insurance policy either. Most policies exclude coverage for personal property that is owned by roomers, boarders or tenants. This personal property exclusion is another reason why a renters insurance policy is essential for non-insured roommates.

AUTO INSURANCE

The auto policy also has a “named insured” which includes the individual listed on the policy and his or her spouse. The insured on an auto policy varies depending on the coverage. For example, liability, medical payments, and uninsured motorist coverage each have their own definitions of “insured.”

Say an adult boyfriend and girlfriend each have a car and their own personal auto insurance policies. One has high limits of liability on their policy, maybe $100,000, and the other has lower limits, like $25,000.

Let’s look at liability coverage in this scenario. This section of the policy covers the “named insured” and “family members” for liability arising out of the use of any auto. It also considers any other person an “insured” while that person is occupying a car (with permission) that is insured under your policy.

Dig deeper, however, and you’ll see that the policy excludes coverage while the “named insured” or “family member” is operating a vehicle that is furnished or available for regular use.

If the girlfriend is driving the boyfriend’s car and gets into an accident causing injuries, his auto insurer would pay up to the policy limits—in this case, $25,000. Unfortunately this may not be enough money to cover the full liability if the injuries are severe, and the liability policy with $100,000 limit might not be available as a fallback, even though it covers the driver for the use of any auto. That’s because the driver’s insurer can argue that this car is available for the driver’s regular use since the car owner and driver live together and that, under that circumstance, coverage is excluded by the policy language.

The good news is that these scenarios have solutions that we are ready to discuss with you. Call us today with any questions!

Source: Trusted Choice

Posted in Auto Insurance, Homeowners Insurance, Personal Insurance | No Comments »

Scheduling items on your Los Angeles home insurance

March 28th, 2011

Whether you own a home, condo or rent there will be some limitations in your Los Angeles home insurance that need to be reviewed and understood.

A typical homeowners policy includes coverage for personal property such as furniture, appliances, clothing, etc. but it has limitations for unique or valuable items such as Jewelry, furs, silver, fine art and more.  To provide better coverage and remove the limitations found in an insurance policy you need to consider endorsing your policy to schedule these items.  By scheduling valuable items you will benefit by:

1)      Having broader coverage.

  • A standard home insurance policy includes personal property on a named peril bases.   This means if the cause of loss is listed under the covered perils, such as fire, theft, vandalism, there would be coverage.  But what happens if the diamond in your wedding band falls out and is lost, or your grand children decide to play ball inside and the homerun flies into you china cabinet breaking your antique china? You won’t find these listed as covered perils on a standard policy but they would be covered if scheduled.
  • Also you will find that some items have limitations in the amount that would be paid out for the item.  An example would be Jewelry that is normally capped at $1,000 to $1,500 per item if stolen.  Scheduling would remove the limitation.

2)      Establish value before the loss.

  • Personal property on a home insurance policy should be written on a replacement cost bases, this means new for old.  So if you have a rocking chair that is 5 years old and it is lost in a fire you would get enough to replace that rocking chair with one that is similar in kind and quality, no matter how much it cost today compared to 5 years ago.  But what happens if the rocking chair is a one of a kind antique rocker that has a value of $4,000 to $5,000?  It can be replaced as to function, sitting and rocking, but not in value.  Items like this need to be schedule and pre-valued so at the time of loss you can at least recover the monetary value of the item.

Scheduling items does cost more, but scheduling offers broader protection, removes limitations and makes claims settlements less stressful by establishing the value prior to the loss.  Scheduling will require appraisals, or some form of documentation, but the extra effort will pay off.

Call your agent or review your Los Angeles home insurance policy for a complete list of personal property that may have limitations.

Tags: , , ,
Posted in David Wellfare, Homeowners Insurance, Personal Insurance, Torrance Insurance, Uncategorized | 1 Comment »

CA Earthquake Insurance: Is the big one coming?

March 25th, 2011

Dr. Pat Abbott, leading expert on earthquakes and other natural disasters thinks everyone should be ready for a major earthquake. With the recent earthquake in Japan and around the southern part of the San Andres Fault Line, the increased activity makes a good reminder to prepare.   Ask yourself:

Do I have earthquake coverage?

Earthquake insurance offers protection for your home, contents and the loss of use of your home due to an earthquake.  Coverage can be provided through The California Earthquake Authority or companies that specialize in earthquake insurance.  Earthquake policies can be purchased as a “mini policy” that basically just protects your home or expanded to include coverage for your personal contents and loss of use of the home.  Call us and we can walk you through what would work best for you.

Have I taken the steps to prepare?

Equally important is to take the time to prepare for an earthquake emergency.  As we have seen from Japan, the resulting damage can leave you days, maybe weeks, without water, food or power.  Preparation before an earthquake, during an earthquake and after an earthquake is critical.  Check this site for guidance.

http://www.fema.gov/hazard/earthquake/eq_before.shtm

It won’t be easy but without proper preparation it will be a lot worse.

What’s shakin in California?

Three-Quarters of our nation’s earthquake losses will be in California.

http://www.seismic.ca.gov/pub/shaking_18×23.jpg

We here at ISU- The Olson Duncan Agency are available to review earthquake insurance coverage options with you.  Please contact us today.

Tags: , , , ,
Posted in Homeowners Insurance, Torrance Insurance, california insurance | No Comments »

Extended Replacement Cost for California Homeowners Insurance

March 22nd, 2011

The limit of insurance you have on your home does not receive much attention until some catastrophic loss happens such as the Californian wildfires or Katrina rolls in.  This is probably because most losses are partial losses and seldom reach the policy limits or because the press does not get too excited about individual misfortune.

But your home is probably one of the biggest assets you have so understanding how it is insured and what would be paid out at the time of loss is important.  For your California homeowners insurance, do you know the amount of insurance you have on your home? Do you know how it was calculated? Are you confident that it is the correct amount to fully replace your home?

Coverage A (dwelling amount) is the amount you would receive to replace your home in the event of a total loss.  It was probably determined with the help of the agent who relies on the insurance companies replacement cost software created by a professional replacement cost service. This service takes into consideration current construction cost in a geographical area and the features of your home that would make your home unique in construction.  If you have not been asked a slew of questions about your home (age, roof, heating, foundation, flooring type etc.etc.etc.) you probably have not have had an adequate replacement cost calculation and you may find that you are underinsured.

Who is responsible for being sure the dwelling limit is correct on a California homeowners insurance policy?  Hard to believe, but it is the homeowners responsibility. The agent and company can help you but it is your responsibility to be sure the information used to calculate the replacement cost is correct.  Always ask for a copy of the replacement cost calculation used in setting the amount of insurance and be sure to correct any discrepancies that you find.

Is there a factor that might help if the limit is too low? Yes, most home insurance policies will include extended replacement cost, typically 125% to 150%.  What this means is that if your home is insured at $300,000 and you have 125% extended replacement cost you conceivably could collect an additional $75,000 in the event the policy limit of $300,000 is too low.

So why don’t I just insure for a lower amount knowing that I have extended replacement cost?  Two reasons:

 First, extended replacement cost is intended to protect when a unique situation arises such as Katrina or California wild fires wipe out a large number of homes.  In these cases the material and labor are in high demand and the cost for these services skyrocket.  You could find, as many did find, that underinsuring might have saved premium but they did not have enough to rebuild their homes.

Second, typical policy language include provisions that must be meant to receive the extended replacement cost:  Review your policy, but typically found are:

  1. Insure the dwelling to 100% of its estimated replacement cost as agreed by the insurance company. This means that their replacement cost calculator was used and you gave the correct information to make the calculation. This is why it is important to review the replacement cost calculation.
  2. Agree to make yearly adjustments reflecting changes in the cost of construction for your area.
  3. Notify the insurance company of any addition or remodeling which increases the dwelling by more than $5,000.

Failing to comply with any of the requirements found in your California homeowners insurance policy may void the extended replacement cost provision.  As you can see it is important to review your policy wording for replacement cost, understand what factors were used in arriving at the limit and to work with your agent to be properly insured.

Underinsuring to save a few premium dollars could cost you a lot more in the long run.

Tags: , , ,
Posted in David Wellfare, Homeowners Insurance, Personal Insurance, Uncategorized | 1 Comment »

Do You Have Employees but No Workers Compensation Insurance?

March 18th, 2011

Do you have employees, and need workers compensation insurance? Are you an employer looking for ways to save money and trim your business expenses? There are plenty of areas you can pinch pennies and save, but workers compensation insurance shouldn’t be one of them. Let us explain why:

The very core of workers compensation insurance is that it provides medical care for employees who are injured in the course of employment. Beyond medical care, Workers Comp insurance provides temporary and/or permanent disability benefits, supplemental job displacement benefits or vocational rehabilitation and death benefits. Workers Comp is a trade-off between employers and employees. Employees receive prompt effective medical treatment for on-the-job injuries or illnesses no matter who is at fault and, in return, are prevented from suing employers over those injuries.

Putting the definition of workers compensation insurance aside, one might ask:

Does an employer have to purchase workers’ compensation insurance?

Yes. California law requires all employers to have coverage for their California employees, even if they have only one employee. (This applies in all states, not just CA.  We are using CA as an example since we reside here).

What happens if an employer is unlawfully uninsured and an employee is injured?

According to the WCIRB, it is a criminal offense for an employer to be unlawfully uninsured regardless of whether or not an employee is injured. California Labor Code specifies that it is a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. In addition, the state issues penalties of up to $100,000 against illegally uninsured employers. If an employee is injured, an employer also opens himself/herself up to liability lawsuits from injured employees.

Would you be willing to take that gamble? The way we look at it, an annual workers comp insurance premium is nothing in comparison to the possible fines and penalties one might face should they decide to take that gamble and lose. Please, find other ways to save on your business expenses, workers compensation insurance isn’t the place to do it.

If you have questions about workers comp insurance, call us (310) 373-6441.

Tags: , , ,
Posted in Torrance Insurance, Workers Compensation, california insurance | No Comments »

Before You Rent A Car

February 25th, 2011

It has probably happened to most of us; you walk up to the car rental counter wishing you could rent the sports car but being practical settle for the compact and finally after the “I can upgrade you to…..” for only…..” pitch you settle on the intermediate and you can be on your way.  But no, then comes the “do you want the insurance options” and the awkward moment of silence as your head tries to process do I need the coverage? Do I have the coverage? How much does it cost? Even insurance agents have to go through the mental calculation at the counter and here why?

Buying coverage from a rental car company is expensive and profitable for the rental car company. Rental car insurance is like the fast food pitch “would you like an apple pie with that or to supersize?”, you probably already have enough with your original order but the add-on always sounds nice.  It is the same with the rental car insurance. Most of the things that can happen to you are probably already covered under your current personal auto insurance.

It’s all about risk.

So do you need to purchase the insurance that a rental car company offers?  It’s all about risk and how much you are willing to pay (premium) to transfer the potential loss (dollars out of your pocket) to an insurance company. 

I maintain that the risk (chance of an accident) is higher when you are driving a vehicle that you do not normally drive in an area that is unfamiliar to you, so the decision on insurance is important as the likelihood of an accident might be higher, but that does not necessarily mean you need additional cost or coverage.  Read on.

Do I need the coverage?

Under your current personal auto insurance policy a rental car is considered to be a non-owned auto, as defined in the policy, and has the same coverage as you have on your owned autos that are listed on your policy.  If you have more than one auto and they have different coverage, the rental car would have the coverage that is the broadest of the autos on your policy.

So do you need the rental car coverage? The only decision you need to make for liability is, are my limits high enough?  If you agree that the likelihood of an accident increases due to unfamiliar cars or area then you may what to consider higher liability limits.  You could purchase this from the car rental company but it would be a lot less expensive just to raise your limits on your auto policy.  I would recommend that even if you are not renting a car, you would be surprised how little the next level of liability coverage actually costs.

For the collision coverage and comprehensive coverage (aka other than collision) you will need a little information about your current auto policy.  First, if you have a liability only personal auto insurance policy you would definitely have a coverage gap and would need to purchase the collision damage waiver (CDW) or sometimes called the loss damage waiver (LDW).  If you don’t and the rental car is damaged or stolen you are responsible.

If your personal auto policy does include collision and comprehensive coverage the rental car would also be covered and only your deductible would apply.  BUT!

What am I missing?

Rental car companies make money two ways; first by having the cars rented and out on the streets and second by annually selling the rental cars.  If the rental car in the shop for repairs, caused by your accident, they lose that rental opportunity and once the rental car is in an accident the resell value goes down.  Both of these, loss of use and diminished value, could be charged to you and your personal auto insurance policy may not offer coverage. How much could that cost you?  An exact amount is impossible to predict, but I’ve seen this easily be in the $5,000 range.

To protect yourself for loss of use and diminished value you will need to consult with two sources:

First call your insurance agent and ask, does my auto policy cover rental cars and is loss of use and diminished value also covered.  Some insurance policies do cover and some do not, you need to know this before you rent the car.

Second call your credit card company; if the credit card is used to rent the car, it may include this coverage.  Be sure to ask about both loss of use and diminished value and if there are any restriction. Get the actual coverage wording from the credit card company.

If your current personal auto policy or credit card does not pick up the loss of use and diminished value coverage then you need to decide do I want to spend $25 to $35 dollars per day for the rental car coverage? What would an agent do? Well I have done both.  I have rented a car for a week and pretty much drove from the airport to my relative’s house and there it sat until I drove back to the airport. I felt the chance of loss was minimal and was willing and able to suffer the potential cost if something should happen.  But I have also purchased the coverage when the weather was bad and when I knew I would be driving in congested, unfamiliar areas. 

So what does it take to make a speedier decision at the rental counter?

Know before you go.  I know my policy limits are or are not adequate, I know my current policy  or credit card does or does not included the two major risks which are loss of use and diminished value, I do or do not feel comfortable with the area I will be driving.

Knowing this may not make your rental car insurance decision as quick as Watson, the computer, on Jeopardy, but will lessen the time standing at the counter with that perplexed look on your face.

Tags: ,
Posted in Auto Insurance, David Wellfare, Personal Insurance, Torrance Insurance | 1 Comment »

Valentines Alert: Steer Clear of Romance Behind the Wheel

February 11th, 2011

From the Insurance Journal:

Nearly one-third of American drivers smooch or engage in other romantic contact while they’re behind the wheel. That’s throughout the year, not just on Valentine’s Day, according to a new poll.

Twenty-nine percent of drivers surveyed for the InsuranceQuotes.com poll acknowledge they’ve been amorous behind the wheel. That number climbs to 39 percent for highly educated drivers (at least a bachelor’s degree) and high-income drivers (at least $75,000 in annual earnings).

“Kissing your Valentine while you’re driving certainly can be fun, but it also can be dangerous,” said John Egan, managing editor of InsuranceQuotes.com.

Egan said federal statistics show that 16 percent of fatal crashes in 2009 were attributed to distracted driving.

The poll, conducted for InsuranceQuotes.com by GfK Roper, shows how universal distracted driving has become: 93 percent of drivers report they engage in it somehow, whether by texting, talking on a cell phone — even kissing.

Posted in Uncategorized | No Comments »

« Older Entries