Friday, June 28, 2013

The Kick Me Prank and What It Can Cost Your Business

The importance of business insurance, in its various forms, is apparent to most business owners. They study the nature of their businesses and the risks that exist and then take the insurance policies that they think offer them the kind of protection they need. But insurance is a complex subject and it is easy to overlook issues and leave the owner and the business exposed to needless risk. Employment practices insurance and legal defense coverage are cases in point. Many businesses either do not realize the risk that they face or undervalue the importance of the exposure they are accepting.

Even with the best of intentions, a small business owner cannot control every aspect of his employees’ behavior while they are at work. Issues such as sexual harassment, discrimination and so on can arise out of thoughtless acts or because of a misinterpretation of an innocent action or words.

Issues like wrongful termination or the failure to provide benefits are easy to raise and difficult to defend. All it takes is one uninformed employee or a vicious one to cause chaos that will carry a hefty price tag. One misguided employee causing pain or suffering to another can land you, the business owner, in the soup. The recent case of the INTEL plant in New Mexico is a good example of this.

Some employees taped a “Kick Me” sign to the back of another employee and then kicked him while others who were watching laughed. The employee went to his supervisor who, on seeing the sign, decided to join in the “fun” and also kicked him. A few more then joined in before the sign was finally removed. The employee suffered severe mental and emotional trauma and has filed a lawsuit of damages as well as attorney’s fees.

This kind of behavior has never been encouraged by INTEL and the employees, for the most part it appears, thought of it a harmless fun and a good prank. But it misfired and the one left holding the baby is the employer. Many of those who participated in the “prank” lost their jobs, but the lawsuit remains and while the damages claimed are not being specified, it could potentially cost the company millions of dollars.

As a small business owner, you may think you know your employees well and are certain that they will not behave in a manner that could cause you problems. But all it takes is one off day, caused by anything from a fight with a spouse to a fender bender on the way to work or anything else beyond your control, and the otherwise well behaved employee could, because of a bad mood, become a huge financial liability.

A lawsuit for damages that are not covered by your existing business insurance policies can ruin you financially and result in the loss of the business.

The cost of this essential extra coverage for a small company with about 15 employees is not
high at around $3,000 per year. As a business owner you will naturally have to consider the
requirement of such expenditure.  But how do you assess people’s moods and attitudes? Even the best behaved of people can indulge in a thoughtless or hurtful act and if it happens in the workplace, you will be the one who has to pay any damages that may be awarded.

If your business does not have employment practices insurance and legal defense coverage, the best thing to do is to talk to an insurance broker to understand the nature of the risks that will be covered, the cost and the benefits that such protection offers. All it takes is one thoughtless gesture or misinterpreted action to create a huge potential liability.

Dog Bite Insurance Claim Trends

From before the beginnings of recorded history, dogs have played a special role in the lives of human being – friend, protector and purveyor of non-judgmental love, they do it all. Having a dog in the house adds another level to the joy and happiness that the family feels. But, while a dog is a part of the family, it should never be forgotten that it is an animal and there is always a chance that it’s natural instincts will surface and cause it to do something that will not meet with human approval. The most common of these is biting – either a person or another dog. The reasons for the bite could be many and from a dog’s perspective, it often makes perfect sense. But a person who has been bitten or whose dog has been injured will not see it that way.

And as the owner of the dog, you are the one responsible for its actions. This means that you are liable for any costs arising out of injuries caused by your dog.

Dog bites are among the top risks covered by homeowner’s liability insurance coverage and with even the best behaved of dogs suddenly having an off day and biting someone, the reasons for this are obvious. But in most cases this coverage is a one shot thing. Once your claim is raised for damages and costs due to your dig biting someone, the chances are that the insurance will be cancelled and finding another fresh coverage will be next to impossible. And even if you do find it, the cost will be 5 times more expensive, or even higher.

As a dog owner, you need to balance the liability with the possible loss of future coverage if you decide to file a claim. To complicate matters further it is a normal condition of an insurance policy that the insurance company must be notified in a timely manner of any potential claim and not doing so could place the coverage in jeopardy. In most cases it is advisable to turn in all claims to the insurer.

But this is not set in stone. If your dog bites someone or another dog and the injury is minor, it could make sense to accept the blame, apologize for what has happened and offer to pay all the bills arising out of the bite. Denying responsibility or trying to place the blame on the other party are natural human instincts, but if your liability can be proven, this kind of actions can make the situation worse for you in relation to your insurance company.

If the costs arising from the bite are going to be less of a burden on you as compared to the possibility of losing your insurance coverage, accepting responsibility and the costs involved could be the more practical and cost effective option. When faced with such a dilemma discussing the matter with your insurance broker and obtaining his expert advice on the best course of action is the right thing to do.

Training your dog properly, socializing him  to minimize the risk of biting and keeping it on a leash when out in public can go a long way towards reducing the chances of your getting involved in a dog bite situation. There are very few bad dogs, but there are many owners who have shirked their responsibility to train their dogs in proper behavior. That is not just antisocial but it also places your finances and insurance coverage at risk.