Happy New Year! 2013 Here We Come!

Wishing all of my readers a very happy and safe New Year's!  

Which Workers Comp Wage Thresholds are Increasing for 2013???

Many of us don't agree with the wage threshold hikes, but we're just the messenger for the Workers Compensation Bureau & Insurance Commissioner.  Brokers in our office have had to make difficult phone calls in the past few weeks to our clients and explain the wage threshold increases.  And believe me, no one is happy about the changes.

Here are the workers compensation class codes that will see an increase in wage threshold effective January 1, 2013:

5403 & 5432 - Carpentry $26 per hour to $29 per hour

5467 & 5470 - Glaziers $26 per hour to $29 per hour

5027 & 5028 - Masonry $24 per hour to $27 per hour

5632 & 5633 - Steel Framing $26 per hour to $29 per hour

5446 & 5447 - Wallboard $26 per hour to $31 per hour

Electrical, plumbing, sheet metal and refrigeration class codes were all proposed to be increased but were not approved by the insurance commissioner.   

Also, for California, S.B. 863 was signed into law this past September and effective January 1, 2013.  It's overall goal is to reduce costs within the workers' comp system by addressing critical cost-drivers: minimizing delays in medical treatment, improving access to MPN care and increasing permanent disability benefits.  For more information on new insurance laws coming into effect in 2013 across the nation, check out this Insurance Journal Article HERE.  

Many of our clients are having to reevaluate their books for 2013 and beyond.  We hope that even due to these wage threshold increases that everyone has a prosperous and healthy new year!

Less Clients, More Service

'Tis the season for being thankful!  And this season I am absolutely thankful for my each and every one of my clients.  They make my day colorful with emails and phone calls.  But the true test is actually being able to be there for a client when accidents or claims do occur.

Late last night I received an email from a client that one
of their properties had been damaged severely from the storm this past weekend.  I was able to respond to them immediately, via my trusty iPhone, and give my client a call first thing this morning to hop on the claim.  In this particular case my client owns an entire block of town homes and there were quite a few town homes that suffered severe water damage due to the storm. Not only was the owner and property manager worried about the damage, but also wanted to put their tenants at ease that this big mess would be taken care of.  

How inconvenient to have to deal with a storm right before the holidays???  Imagine presents, etc., on the floor around the tree that are soaked while you're out running errands.  Not a fun way to come home.  In cases like this, it's my job to make sure things are followed up on and processed accordingly.  I spoke with the owner and the property manager this morning.  I also filed the claim on behalf of the insured to make sure that an adjuster would be assigned to the claim right away.  Now, is it my duty to file the claim on behalf of the insured?  No.  But do I feel better making sure it is filed and being handled properly because of this?  Absolutely.  

Sometimes brokers take the easy way out and redirect insured's to call a 1-800 claims number.  While this may be the most "efficient" way of handling a claim since there is no longer a middle man, it's definitely not the most personal to handle a claim.  Claims are extremely sensitive.  Someone's property is damaged, or in the worst case, someone's injured.  As a broker it's my responsibility to take time out of my day and make sure my clients are O.K.  That is the least I can do when a claim occurs.  If your current broker isn't taking the time to make sure your business is O.K. when a claim occurs, maybe it's time to start thinking about finding someone who has less clients and is more concerned with their clients well-being than their bottom line.

That Will NEVER Happen to My Company!

I can't count how many times I've sat down with C.E.O.'s, V.P.'s and C.F.O.'s for them to tell me that a specific claim instance would never happen to them.  Well, news flash...it has happened to some of my clients!  And no matter how many controls, safety measures and positive company cultures you may boast, it can happen to your company.   Recently we stressed the importance to a company for crime coverage.  The owner was adamant that this would never happen to his company.  He denied the coverage and he is now dealing with over a $350,000 financial loss due to an employee stealing from the company.


As an insurance advisor, it is my job to tell you about all the things that can happen and prepare the business for financial hardship or simple inconvenience in wake of a claim.  Are some instances scary and turn into disasters?  Yes.  Is that every claim?  No.  You definitely don't have to over-insure in every instance.  I am not a fan of spending money carelessly.  But don't go the ignorant route and assume that claims you hear about on television or in the news could never happen to your company.


When I am developing an insurance program for my insured's, one of my client's primary concerns is the deductible or self insured retention amount.  As this should be a concern, some of the less experienced clients tend to associate the deductible, whether high or low, with the premium amount.  The higher the deductible the lower the premium dips.  The lower the deductible, the higher the premium rises.

As a rule of thumb, is this correct?  For the most part yes.  However, what does it mean to take on a bigger deductible vs. a smaller one?  Some business owners only care about the bottom line and never think that anything will ever happen to their business.  These are the businesses that are O.K. with taking a bigger deductible or S.I.R. risk, even if it isn't the smartest thing to do on the books.

My advice is to seriously evaluate financially what your company can afford in case of a claim where a deductible or S.I.R. needs to be paid.  Whether that be a $2,500 deductible or a $50,000 S.I.R., pay attention to these key insurance factors and not just the bottom line.  Is this deductible per claim or per occurrence?  A per claim deductible could mean you are paying out multiple deductibles for one particular event or loss which could add up quickly.

Have more questions or just want a second opinion?  Feel free to email me for aninsurance evaluation for your own business at joileneh@dbinsurance.com.

Flood Insurance – A Step Ahead

We have listened about many insurance schemes for car insurance, life insurance, dental insurance, home insurance, boat insurance and health insurance etc. But an insurance scheme has also been launched by The National Flood Insurance Program. It is having its agencies which also regulate the work of providing insurance for flood claims. At most the places anyone can get flood insurance from where they get home insurance but where this facility is not available at that place NFIP get active. They provide reasonable quotes for the flood insurance. For excess coverage NFIP provide different schemes and it is especially for the prone areas which mostly get affected by floods. There are two kinds of policies for the floods: • Primary flood insurance • Excess flood insurance In primary insurance they give coverage of $250000 for home $100000 for contents and $500000 for business. This coverage is not too huge as they are good for small houses but for large empires and multistory houses this amount is not so sufficient and a huge amount will go from the owner’s pocket. So, more investment is needed especially in flood prone areas. In cases of excess flood insurance the amount invested is huge and the coverage is also up to a larger extended. They take the responsibility of rebuilding the house and also cover the loss caused by the flood. One should definitely go for excess flood insurance scheme if he or she is having a greater danger of flood and that amount does not come under the NFIP guidelines. One should always play a safer game and get best out the deal. Only searching for the lowest quotes is not intelligent in every case. One should look for the security too. If the risk is higher then there is no harm in investing more as in case if you will suffer some tragedy you will not suffer any loss and you will also live a relaxed and tension free life. So always go for some thing new and never feel hesitation in investing in insurance schemes as they will secure your future only. Even if you are not interested in investing right now then also don’t miss a chance to gain knowledge out of it. Who knows at what time in future you will be in need of such insurance in future. Its better to be aware and gain knowledge at every point in life.

Are You Classified Properly???

Answer yourself one question: What exactly does your business do?  Are you a manufacturer and your insurance policy classifies you as a wholesaler?  Are you a general contractor and your policy is classifying you as a subcontractor?  Are you a retail operation and your insurance policy states you're distributor?  Sadly, companies are classified improperly WAY too often.   


I've been reviewing a plethora of policies for prospects lately.  One common denominator lately is that the current broker has not been classifying the business properly.  There are a few reasons why your business could be mistaken for something else.

1. The current broker sincerely doesn't understand what your company does.  They picked the class code description that they thought best described your operations without checking with you.
2. The class code description your broker is using is associated with a cheaper rate.  No explanation needed here; he or she is just trying to make their quote look better.
3.  Your broker honestly thinks that the class code they chose was the correct class code describing your business.  Mistakes happen.

Not many insured's research their policies with a fine comb.  That's what they hire an insurance broker for!  But, one thing you should and can pay attention to is the initial quote and the operations endorsement once the policy is issued.  A seasoned broker will send over a complete quote which includes the effective dates, limits of insurance and deductible amounts, total premium including any fees and a detailed description of how the business is classified. 

For example, if I am quoting a plumber, it clearly states on my initial quote "Plumbing - residential" and/or "Plumbing - commercial".  There is no doubt in my mind and my clients mind what the operations of the insured are.  Clear and concise is the name of the game.  Below is an example of what a classification and/or exposure should look like.

Now not all insurance carriers quotes will look this pretty.  Some are a bit confusing to read at times especially when there are split rates involved, etc.  If for some reason your broker classifies you improperly, it could possibly lead to issues at the time of a claim and/or an impulsive cancellation notice popping up in your mail from the insurance carrier directly. 

Don't be afraid to ask questions and make sure your business is classified properly!

Cheating on Your Audit and How it Doesn't Pay Off

Insurance carriers are surely cracking down on clients withholding payroll or gross revenue information.  One of the most repeated complaints I hear from prospects or new clients is that they always get a pesky audit bill at the end of the insurance term.  And, let's be honest.  It's never a good time to pay a large chunk of money to an insurance company.  But if you lie when reporting your revenue or payroll, be prepared to get caught. 

These past few years, projections have been tough to predict.  We've seen clients down size drastically, from 200 employees to 20.  We've experienced clients going out of business with hopes of re-opening their doors again in a better economy.  And we've witnessed companies joining forces to make sure they can weather the storm.  The economy took a giant leap off a cliff and, hopefully, we're slowly but surely climbing our way back to the top.

With all the economic pressures, it's never fun to also deal with an audit from your insurance company.  So here are a few tips to help make sure you don't get that HUGE bill at the end of your insurance term:

• Don't try and cheat the system.  Seriously.  Use accurate numbers at the end of the term and report properly.  Pull your reports directly from your payroll software or payroll company.  This will assure the insurance company that there is no funny business going on.  Some insured's have tried to skim their numbers only to be faced with criminal charges down the line.  And, I can guarantee you, those charges and defense costs were MUCH more then any audit they ever received. 

• Ask your insurance broker to perform a mid-term audit on your books.  Checking in with you about 6 months into your insurance term is a good rule of thumb.  Your broker should be comparing your current numbers (payroll and/or gross revenue) to the projection listed on your insurance policy.  This will prevent any major audit bills from crossing your desk at expiration.  If the numbers are up, you may want to think about reporting that to the insurance company midterm so that payments can be spread out over time.

• Attempt to negotiate.  If you've been a loyal client with an insurance company for years, ask your broker to see if there's anything they can do to lower your audit bill.  It never hurts to ask.  If the insurance company isn't willing to lower the audit bill, see if you can get a payment plan going for the audit if necessary.  

Most importantly, make sure you keep the lines of communication open with your broker to assure you don't have a surprise audit at the end of your insurance term!