Month: March 2013

How to Prepare the Construction Site for Severe Storms

Posted on by shasha insurance

Every construction site needs a storm preparedness plan to ensure a safe environment during hazardous weather. It is important to take the necessary time to develop a good plan several months before the storm season begins. Contractors and builders lose millions every year during storm season because of a lack of preparedness. A plan can be executed in just a couple of hours, and the investment is very small. When comparing the invested amount to the possible losses, it is easier for any contractor to get started with making a plan. The following checklist should be completed far before the start of the storm season.

Storm Preparedness Checklist

1. Clean the construction site daily.
2. Take photos of the site daily to record project progress before a storm might hit.
3. Order crew leaders to complete current jobs before starting new ones.
4. Complete regular maintenance for electrical and mechanical equipment.
5. Maintain an adequate number of sandbags or water detention devices.
6. Secure all staging areas and trailers one month before the storm season begins.
7. Small items that could be blown or washed away should be stored in buildings.
8. Include subcontractors’ supplies, property and personnel in the plan.
9. Ensure all electronic devices have battery power supplies.
10. Give the emergency power generator system a checkup and tune-up.
11. Check all of the batteries in emergency exit signals and emergency lights.
12. Stock offices with emergency kits, flashlights and other safety gear.
13. Buy enough bottled water to last all site workers at least five days.
14. Make sure there are always enough office supplies to last several days.
15. Keep important documents in a safe place where water cannot damage them.
16. Educate key workers about what steps they must take if there is an oil spill.
17. Provide employees with phone numbers for all state and local emergency agencies.
18. Give all workers specific assignments to help execute the plan.
19. Develop a system to inform workers about when to come back to the site.
20. Carefully review the building insurance policy for storm damage details.
21. Find out how many extension days the contract allows for weather interruptions.
22. Post the completed plan in a location where it is easy for all workers to see.

Action Plan
After the preparedness plan is in place, it is important to develop the plan of action. Workers should understand the difference between the two plans, and they should know that the action plan is only implemented when a severe storm is imminent.

1. Personnel must assess and clean the site to remove debris or hazardous objects.
2. Dismount and secure all scaffolding.
3. To prevent damage from sand accumulation, protect underground drains and pipes.
4. If there are scheduled deliveries, postpone them for at least two days.
5. Disable all of the power lines, and remove the temporary connections.
6. Any hazardous or contaminating materials should be covered and secured properly.
7. Secure and cover every window or glass feature with storm shutters.
8. If time allows, booms can be laid down, or the load line can be hooked to a low point.
9. If dumpsters cannot be removed from the site, cover and secure them.
10. If there are any open excavations, close them to prevent water from accumulating.
11. Disassemble every temporary structure or fence that might be swept up by the wind.
12. Make sure all catch basins and storm water inlets are free of debris.
13. Secure all of the heavy equipment in a safe area.
14. Designate crews for the shifts, relief, cleaning and standby. 

Are Your Safe Driving Skills Up to Par?

Posted on by shasha insurance

As if we didn’t already have enough distractions, on-board GPS systems, portable DVD players, iPods, and Smartphones have created more driving distractions than ever before. And, it’s certainly not atypical for a vehicle to simultaneously have ringing phones, cartoons blaring from the backseat, a GPS incessantly yelping orders out, and fast-food fries flying around like ninja weopons.

Even though elements like the above have been proven to make it nearly impossible for a driver to devote their full attention to the road at all times, many drivers still think they’re perfectly safe drivers. Here’s a simple yes -or- no quiz that you should take to really determine just how safe you are when driving with distractions:

1. So long as I’m not watching, it’s okay for passengers to watch a movie on the vehicle’s in-dash video screen?

The answer is no. Not only do most front seat, in-dash video screens generally have a feature that prevents it from showing entertainment or business video when the car is moving, but it would also be completely unsafe to do so since it would inevitably catch the driver’s peripheral vision and distract them. Furthermore, many state laws regulate the placement and use of on-board video screens.

2. Have there been any criminal cases alleging electronic devices were the causative factor in vehicle accidents?

The answer is yes. One example would be a 2004 case that took place in Alaska. The driver was allegedly watching something on his DVD player when he struck another vehicle and killed two people. Although the driver claimed he was only adjusting his CD player, he was charged with second-degree murder on the premise that he engaged in conduct showing an indifference to human life.

3. In-dash monitors for rear-view camera and navigation purposes can be installed in the front seat?

The answer is yes. If the device has the feature that prevents it from showing entertainment and business video, then it can be installed and used in the vehicle’s front seat.

4. It’s okay to drive as you eat or drink?

The answer is no. While driving as you drink coffee or eat a granola bar usually isn’t the distraction that watching a movie or text messaging is, it’s still an unsafe driving practice. The bottom line is that doing and thinking about anything aside from driving can distract you from the road and lead you to look away, remove your hands from the steering wheel, or become mentally preoccupied.

5. Does driver distraction cause very many accidents?

The answer is yes. Over 6 million crashes, 3 million crash-related injuries, and 42,000 crash-related deaths occur each year in the U.S., of which driver distraction accounts for 1.2 million to 1.8 million, or roughly 20-30 percent.

6. Do federal laws govern the use of mobile devices like a GPS in moving vehicles?

The answer is no. In some states, there are state laws that prohibit the use of hand-held cell phones in moving vehicles, but there aren’t any federal laws regulating the use of mobile devices in a moving vehicles.

7. Can the National Highway Traffic Safety Administration (NHTSA) regulate cell phone usage in moving vehicles?

The answer is no. Cell phone laws are enacted at the state or local levels. However, NHTSA is able to regulate the use of motor vehicle equipment and devices.

8. Are lawmakers concerned with vehicle crashes related to driver distraction?

The answer is yes. Over the last decade, several states have already passed or presented legislation related to driver distraction and vehicle crashes, and the number of states looking into such laws grow every day.

9. Do any states totally ban hand-held cell phone use while driving?

The answer is yes. Nine states, including California, Connecticut, Washington, New York, New Jersey, and Utah, prohibit all drivers from using hand-held cell phones while driving. Additionally, 30 states and the District of Columbia ban novice drivers from using both hands-free and hand-held cell phones.

10. Can your employer be held liable if you’re using a cell phone and crash into someone or something?

The answer is yes. Your employer can be held liable in a court of law. Under respondeat superior, an employer can be held liable in civil court for employee acts committed within the course of employment.

How many did you get right? Maybe you’ve learned a few new facts, or maybe you gained a new respect for what you already knew. Either way, it’s time to put down the food, turn off that cell phone, and start keeping your mind and body focused on the road ahead of you. 

Good Housekeeping Is Safety Job One

Posted on by shasha insurance

Cleaning up is usually not a task many people enjoy.  Whether it’s washing the dishes after a big meal or scrubbing the shower, most people would rather put off until tomorrow what they should be doing today.

The same is true for housekeeping at work.  Employees get involved in the day-to-day routine, always intending to clean up but never quite doing it.  Sometimes, they make a half-hearted attempt at sweeping aside some paper, but it doesn’t attack the real problem.  That’s because the problem with poor on-site housekeeping goes beyond just hygiene.  Lack of regular housekeeping can actually be the catalyst for injury.

Employers should establish a routine housekeeping program and designate someone to administer it and to ensure employees follow it consistently.  If a housekeeping program is going to be truly effective, management must show they have enough commitment to the program to formalize it and have a designated overseer.

This kind of strict adherence to good housekeeping practices will lower your company’s accident rates, which in turn lowers costs for medical claims and workers’ compensation.  Fewer injuries occur when there is sufficient work area for employees to move freely while doing their jobs.  Fewer injuries can also lead to increased production.  When work areas are hazard-free and supplies and equipment are orderly, workers can perform their jobs more efficiently with little down time spent looking for what they need.

A clean workplace also helps workers think more clearly.  If employees know they will be able to access what they need to perform their jobs, a major source of stress in the workplace is eliminated.  Work becomes less like “work” and much more enjoyable.  As employees find themselves less burdened with concerns about being physically able to get the job done, it boosts their morale, in turn increasing production and quality of their output.

What should you include in your on-site housekeeping program?  The California State Compensation Insurance Fund recommends the following:

• Neatly arrange small parts, tools, cords, hoses, and equipment

• Close drawers and cabinet doors when not in use

• Store materials and supplies away from edges and at a stable height

• Clean up liquid spills and tracked in water, mud, and snow, which could cause a slip and fall

• Properly store or dispose of oily rags or flammable liquids

• Put scraps or debris in available trash containers

• Keep aisles, walkways, platforms, and stairways clean, clear, and dry

• Insure easy access to fire extinguishers, safety equipment, and emergency exits

The most important lesson to teach employees is that following good housekeeping practices is an ongoing process that every worker should adhere to each and every day.  Once good housekeeping practices become a part of your workplace culture, it will take less time and effort to follow them because they will be second nature to your employees.

How to Keep Family Members & Visitors Safe in the Pool

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Many children drown or are injured in residential pools every year. By implementing a good set of safety rules, parents can help keep their kids and visitors safe. Some people may think it sounds rude to lay down a list of rules in front of pool guests, but the cost of a liability lawsuit would be much worse. To avoid sounding like a stickler, simply explain to pool guests that their safety is important. Explain that they can help out by following the safety rules. Parents should review these rules with children frequently. Quiz them on each point to ensure they understand thoroughly. The following tips are helpful for developing a strong set of pool and spa safety rules.

1. Specify all requirements. This should be the most important step. Decide who can go in the pool and at what time. For example, children should have specific blocks of time when they are allowed in the pool, and they should not be allowed to go in when an adult is not present. Teach them it is dangerous to run. Instead of just telling them not to run, explain how they can slip, fall into the pool and possibly drown. Discourage horseplay or rough water games. Children who cannot get along in the pool should understand that there will be consequences. Kids should also understand how important it is to stay away from drains and filters.

2. Have an emergency plan. Even if strict rules are set in place, pool accidents may still happen. It is important to know what to do. Make sure a cordless phone is always near the pool. If an accident happens, it will be easier for someone to call 911. Adults should learn how to perform CPR. The Red Cross offers low-cost classes, and some hospitals or health clinics offer free classes. Make sure kids know how to dial 911, and they should know what address to tell emergency response teams to locate.

3. Teach kids how to swim. Although toddlers may not be up for actual swimming lessons, it is good to put them in the water with floating pool toys. Do not leave them alone, but let them get accustomed to the water. When children are old enough for swimming lessons, enroll them in beginner courses. Let them continue until they complete all of the courses. Adults who have never taken swimming lessons should also learn how to swim. As a backup, it is helpful to have a life-saving floating raft attached to a rope or pole.

4. Keep the pool area safe. When the pool is not in use, make sure it is covered. Purchase a pool cover manufactured by professionals. Never use a tarp. Some nets work well as pool covers, but they become weathered over time, so be sure to replace them every few years. Nets may also be easy for some children to remove. The optimal choice is a durable hard cover with a locking mechanism. Make sure there is a fence around the pool or yard. The fence should stand at least four feet high. If a house is used as a fourth side to enclose a pool, install door alarms. This will alert parents when kids enter the pool area. It is also helpful to install underwater alarms or surface wave alarms. If parents do not deactivate these alarms, they will go off when kids enter the pool.

If a child is missing, be sure to check the pool first. This is a thought that no parent wants to dwell on, but it is best to rule out that possibility first. Parents should always carefully watch kids who are playing in the pool. Accidents can happen in a second, and children can start drowning in less than a minute. Check drain covers frequently, and make sure they are compliant with current regulations. A pool service company will be able to provide information about current drain cover specifications. Remember to keep any gates to the pool area locked. Homeowners may be liable for uninvited people who wander into an unlocked pool area and get injured.

Sarbanes-Oxley Act Changes Rules for Privately-Owned Businesses

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Responding to a number of scandals involving fraud at publicly owned companies, the U.S. Congress in 2002 enacted a new law intended to make undetected fraud less likely to occur.  The law applies only to public companies, mainly those whose securities are registered in accordance with the Securities Exchange Act.  Even so, experts predict that it will have an enormous impact on private companies as well. 

Among the changes many businesses, public and private, will undergo are creating mechanisms for fraud whistle blowing by employees, adapting to a different relationship with their external auditors, upgrading internal financial controls, becoming much more aggressive at preventing fraud, and improving audit committee accountability.  This magnitude of change is why the Sarbanes-Oxley Act has been variously described as “a paradigm shift” in how companies do business and “a whole new way of thinking about corporate governance.”                       

Some of the most notable of the act’s requirements include:

· Management must certify the accuracy of their companies’ financial statements.

· Management must attest to the effectiveness of their internal financial controls.

· Outside auditors must attest to the accuracy of management reports.

· The internal audit committee must have independence and must include financial experts.

· Steps must be taken to improve fraud detection and prevention (e.g., an employee hot line for reporting fraud, training about fraud, a written corporate anti-fraud policy).

· Auditors must proactively look for material misstatements in financial reports, evaluate opportunities to commit fraud, and maintain a skeptical attitude to the company’s reports.

 

Some experts predict that more private companies will fall under new rules similar to or the same as Sarbanes-Oxley as states enact new laws and apply them to private companies doing business in the state.  

Many banks and insurance companies are demanding a higher standard of action to prevent fraud and are closely examining a borrower or insured’s fraud prevention efforts.  Private companies that deal regularly with banks and insurance companies, and those that are potential acquisition targets, might find that they must comply with new rules even though they are not required to do so by law.  While previously a banker’s only concern was whether they would get paid, now they are more likely to be concerned with whether management has done enough to avoid the risk of financial mismanagement. 

Insurers, too, are engaging in increased oversight.  Prices are going up on coverage in every area of financial fraud and mismanagement risk. Underwriters are reviewing private companies’ financial statements much more carefully and sometimes require interviews to obtain additional explanations.

Customers, clients, professional services providers, and business partners of privately held companies want to avoid the spotlight of scandal and may insist on adherence to the principles of Sarbanes-Oxley.

Private company directors are also likely to push for stricter fraud-prevention efforts in light of a recent federal court decision that will hold them responsible for fiscal misconduct by company management under a standard of due care and loyalty just as directors of public companies are.  In Pereira v. Cogan, et al. (294 B.R. 449, S.D.N.Y. 2003) the judge ruled that directors at bankrupt Trace International Holdings Inc. failed in their responsibilities by allowing Marshall Cogan, Trace’s chairman and controlling shareholder, to drain company funds by drawing excessive compensation, loans, and dividends.  Significantly, the Trace directors were found to have violated their fiduciary duties irrespective of whether Mr. Cogan’s self-dealing actions were the result of, or enabled by, board action. 

The court noted that, during the period in question, the Trace board held no meetings and that, when it acted, it did so by written consent.  The directors argued that they should not be liable, since they had not taken any action nor played any part in the improper transactions. But the court rejected this idea, noting that directors have a duty to be informed of significant corporate expenditures and to disapprove of those that are not in the best interest of the corporation or its shareholders.

It will be years before the full effects of this new climate of corporate financial accountability will be realized.  For many private companies, as for public ones, the likelihood is that there will be little choice but to change some of their practices and to spend more to prevent fraud and other financial mismanagement.

Using Insurer Financial Ratings to Choose Your Insurance Carrier

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The right to choose is one of our most closely guarded freedoms. But along with that right comes the responsibility of being accountable for the consequences of your choice. If the choice turns out to be a poor one, the consequences can have devastating effects, especially if the decision-making is in a business context.

When you select an insurance carrier you need to weigh each option against the same set of objective criteria. The goal is to use a set of pre-established conditions that will ensure the selected carrier will have the financial strength to stick with you over the long-term. This concept is the foundation for what insurance evaluation services perform.

Analyzing a carrier’s financial standing is a fairly complex task requiring a lot of intricate calculations. Each of the recognized insurance ratings firms have a somewhat subjective way of arriving at the ratings they give companies. However, there are some common criteria they all use in their evaluations. The first criterion is the company’s liquidity. Going-hand-in-hand with liquidity is leverage. Leverage is the amount of money a company borrows to increase its assets either through purchase or investment. The more leveraged a company is, the more debt and conversely, the less equity they have, which affects their liquidity.

Of course, companies are rated on their investment portfolio because it also affects their liquidity. Their portfolio needs to be diversified with quality securities in order to receive a high mark in this area.  The next evaluation point is risk-based capitalization. This is the theoretical amount of capital needed to cover the risks associated with their operation. If this money is put in reserve, it lessens a company’s available liquid assets. It also affects profitability, which is another area for evaluation.

Other more general aspects that are assessed include the overall conditions of the market, how diversified the carrier’s product line is, how competitive they are when measured against other carriers with a similar product lines, the experience level of their management team, how much of their product line is made up of policies that are extremely risky to underwrite and how large a reserve they have to cover risk. An insurance carrier that receives high marks in all of these areas of assessment is one that you can depend on to be around when you need them.

You have access to this information by reading reports generated by the insurance evaluation services. There are a number of them available, but the three most commonly used are:

  • A.M. Best Company – they are the original insurance raters, established in 1906. They use letter ratings to evaluate not only the company’s current financial condition, but also its future outlook. They also have a NR designation, or “not rated.” The NR designation includes the general reason why a rating was not assigned. Best lists its ratings scale and insurer profiles on its web site www.ambest.com.
  • Standard & Poor’s – they assign an insurer a financial strength rating based on an assessment of whether or not the carrier has the financial capability to meet its obligations as outlined in the terms of its insurance policies and contracts. A Standard & Poor’s evaluation uses both hard numbers and subjective factors such as general attitudes toward the company. Their ratings categories and reports can be found at www.standardandpoors.com.
  • Moody’s Investor Services – they also use an evaluative approach that includes both objective and subjective factors to determine if a carrier can meet its obligations to its policyholders. You can find their reports at www.moodys.com.

Until You Know It’s Protected, Keep Your Boat on Dry Land

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Americans love the sense of freedom and adventure that comes from boating. But boating can have a dark side, too. According to the U.S. Coast Guard, there were 4,730 boating accidents that involved 736 deaths in 2009. The price tag of these recreational boating accidents is high: about $36 million dollars per year.  And these figures are probably only the tip of the iceberg since the Coast Guard believes that more than 80 percent of all boating accidents go unreported.

Given this level of risk for accidents, it would make sense that boat owners would look for a way to protect themselves, but that doesn’t seem to be the case. A study conducted by Progressive Insurance revealed that nearly one third of U.S. boat owners don’t own a separate watercraft policy. That’s probably because boat owners assume that their craft is covered by their personal auto policy or their homeowner’s policy. This is a mistake that can cost them big time.

The standard auto policy covers the boat trailer for liability with the option to add coverage for physical damage. The boat itself, however, is not covered for liability or damage.

Some homeowner’s policies offer coverage for physical damage for boats, but only for smaller vessels. The typical homeowner’s policy contains a special property limit of $1,500 on watercraft, which doesn’t begin to equal the dollar value of most boats. In addition, the covered perils specific to the boat are also greatly restricted.

There is also liability coverage available for boats under the majority of homeowner’s policies, but once again, it is only applicable to smaller watercraft. The only exception is a boat with an outboard motor. That means that any type of boat you own that is powered by an inboard or inboard-outboard motor is excluded from liability coverage under the homeowner’s policy.

Because most boat owners are unaware how large a property and liability loss they expose themselves to without proper insurance, the Institutional Risk Management Institute (IRMI) has created a list of loss scenarios that demonstrate the need for specialized boat owners coverage:

·  Your cruiser collides with a speedboat whose operator fails to yield the right of way, causing extensive damage to your boat. The owner of the speedboat does not have any insurance coverage.

·  An expensive fishing boat you just purchased is stolen from your home.

·  Your 27-foot-long sailboat is damaged by a hailstorm and high winds while docked at the marina.

·  Your sport fishing boat is struck by lightning, incapacitating its electrical system.

·  Your daughter’s friend is water skiing behind your boat and  falls into the lake, injuring herself, due to the excessive speed of the boat.

·  You negligently cause another boat to overturn to avoid a collision.

·  Your outboard motor explodes, seriously injuring your next-door neighbor.

These scenarios illustrate the need to factor insurance costs into the equation when buying a boat.  If you fail to insure your boat properly, your boat loan may become the smallest of your financial worries.

Understanding the Process & Benefits of Deconstruction

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The process of deconstruction involves structural and architectural components of a building being salvaged or removed before demolition. Remodeling and demolition projects produce more than 50 million tons of debris, which normally ends up in landfills. By hiring special contractors to assist in assessing what materials can be salvaged, the process is optimized. Plumbing, lumber, cabinets, some fixtures, concrete and a wide variety of other materials can be salvaged. After being saved, these materials can then be donated to charity or reused for future projects. In addition to this, it may be possible to gain LEED points or tax credits for some materials.

Basics Of Deconstruction
It is important to identify any permit issues and potential hazards. The main concept abbreviation to remember for the actual task of deconstruction is this: LOFO. It means last on is first off, which indicates the last piece of material placed during the construction process should be the first object to be taken out. When the deconstruction process is being carried out, the same tool that was used to install a specific object or material should also be used to remove it.

During the task of removing materials, it should not be necessary to use excessive force. When contractors find themselves reduced to this as the only option, something is preventing the object from being extracted. Evaluate the surrounding area to see if any alterations were made. If not, continue assessing the area until the source of the difficulty is found. For all projects, it is crucial to use proper safety tools. Employees should also be provided with the right safety gear and other materials. Workers should not be exposed to overhead activities, so work on only one floor at a time.

To keep safety a priority, plan an escape route ahead of time. All exits and hallways should be free of debris. Another important step to take prior to a project is to obtain an estimate, and one of the best sources for this may be the structure’s original blueprints. It is also helpful to know what to do with the material ahead of time. In addition to this, it is wise to have transportation for the materials scheduled beforehand. If the items will be donated, contact a charity such as Habitat for Humanity to arrange a time to receive them.

Costs Of Deconstruction
When planning a deconstruction project, this is the main area where people will notice an impact. Research shows that the highest value per labor unit varies for each residential construction component. The most valuable materials include following:

-Plumbing Fixtures
-Lighting & Electrical Features
-Massive Dimensional Lumber
-Wood Timbers
-Interior Wood
-Outer Sheathing
-Wood Flooring

Before starting a deconstruction project, people may consider various alternatives. These considerations are what lead people to choose the methods and tools used for the process. Although deconstruction is not a cheap solution, it does come with its own set of benefits. For example, it is better for the environment, reduces landfill waste, results in cleaner air and may be beneficial for charities if materials are donated. In the end, it is possible to create financial, environmental and social contributions.

Comparing Demolition & Deconstruction Costs
The United States Army uses the following formula to assess market price for materials: MP = MC + PC + TC + P. In this equation, P represents profit, TC represents transportation cost, PC represents processed cost and MC represents material cost. With demolition, there are rental costs involved when working with waste companies. There are also costs for relocating debris, maintaining equipment, paying workers and purchasing safety gear.

With deconstruction, there are costs for planning, management, hauling, labor, equipment maintenance and training. If salvaged materials are traded or sold, keep in mind they may be considered revenue. However, the benefits include LEED points, possible state funding and tax credits. In many cases, deconstruction provides a great overall solution for building owners. 

Why Insurance Premiums are Increasing

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Insurance premiums are a function of these factors: The perception of future risks, recent catastrophic claims and the return available on investment. Huge fires and other disasters factor in, such as the Colorado Springs blazes earlier this year and other natural disasters have also forced large payouts. Even the devastating Japanese earthquake and tsunami from 2010 affects insurance premiums in the United States, since insurance companies routinely purchase re-insurance coverage from very large companies. And these reinsurance companies, such as General Re, have been increasing their rates. In addition, jury awards and settlement costs in a variety of commercial fields have put pressure on insurance company reserve funds.

Yes, insurance companies are just like you: They assess the risks they can cover, and then buy insurance themselves to protect themselves against very large but unlikely events that would overwhelm their reserves.

We saw a similar tightening of the property and casualty insurance world across the board, in 2001, following the 9/11 attacks on the World Trade Center. The direct costs themselves were significant, but reinsurance companies also increased their rates then, in order to cover their own risks and ensure clients were protected in case of acts of war, nuclear strikes, chemical strikes, etc.

Fortunately, their worst fears weren’t realized, but prudent insurers are in business to cover the worst case scenario, and so they had to plan and set premiums accordingly.

Fast forward to today, though, and we have a different phenomenon at work. Reinsurers had just started to climb out of the substantial capital shocks of 2008 and 2009 when they got hit with the Japan tsunami, which put pressure on capital pools. But as they work to replenish their reserves, all insurers, all over the world, have been forced to reckon with a new reality: Low interest rates.

Insurance companies make money in two ways: Bringing in premiums, and investing the “float.” Normally, insurers break even or even run a slight loss on premiums. This keeps premiums affordable, but is only possible because they can invest their accumulated reserves at a profit.

Ten years ago, an insurance company could get 5 or 6 percent on a portfolio of Treasuries. Now that same insurer struggles to get 2 or 3 percent on a AA-rated bond portfolio, and U.S. Treasuries – the traditional mainstay of conservatively-run insurance companies, may well be generating a negative real return after inflation.

Something has to give.

That’s what we’re seeing now: Actuaries have no choice but to increase premiums to cover anticipated payouts in light of the new lower interest rate environment. To do otherwise risks insolvency, which does no service to the insured at all, and even defeats the purpose of insurance.

The tightening of the reinsurance market, combined with adjustments to account for the lower returns on assets, is now making its presence felt on Main Street: Aggregate commercial insurance ratios increased for the fifth consecutive quarter, and by 5 percent in the first quarter of 2012 alone. That’s the biggest increase we’ve seen since 2004 (remember those summer hurricanes in Florida that year?)

The two lines responsible for the largest increases, according to a Towers Watson survey, were the two segments most vulnerable to jury award and medical cost increases (workers compensation), and increased reinsurance costs from megadisasters and lower interest rates (commercial property insurance), respectively.

Insurance markets tend to cycle along with other industries. As reinsurance pools of capital get replenished, or as interest rates rise, allowing carriers to generate more revenue from the “float” rather than rely so much on point-blank premium collection, rate increases tend to moderate, and new carriers spring up to compete for business.

So if you are seeing rates increase, it’s more a matter of prudence in the face of risk and low returns on capital, which affect all carriers everywhere. As a result rates increase to make sure there are enough in reserves to cover future claims . No one is exempt, and it’s a bigger issue than any single insurance agency, carrier, or insurance line.

Are mp3 Players a Safety Hazard at Work?

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“Music hath charms to soothe the savage breast.” At least so thought William Congreve, a 17th century English playwright. However, the music Congreve was referring to didn’t come out of technological concoctions such as the mp3 player. Had he been alive today, he might be less concerned with the effects of the music and a lot more concerned with the effects of using this technology, especially on the job.

The mp3 player is fast becoming the method of choice for employees who need their daily dosage of tunes during the workday. While it can be argued that usage of personal music players in the office help employees concentrate by letting them tune out extraneous noise, it should be noted that any productivity gain comes with a price.

The first safety hazard associated with repeated mp3 player use is a condition that results from the hand movements necessary to navigate through a playlist. The British Chiropractic Association has called the movement “unnatural,” stating it separates the joint in the thumb every time the action is performed. The ultimate result of repeating this movement too often is a Repetitive Stress Injury (RSI). In addition to RSI, the prolonged gripping of the device, the repetitive pushing of the small buttons and the awkward wrist movements can lead to carpal tunnel syndrome and tendonitis. As the devices become even smaller with each succeeding product generation, the risk for these conditions will become more prevalent. And as every employer knows, an employee with carpal tunnel syndrome or tendonitis is not only unproductive, but prone to racking up large medical claims.

The potential for hearing-related problems connected with mp3 player use is another source of alarm. Digital technology permits users to listen to thousands of consecutive hours of music. Older technologies either required users to turn over a cassette or contained only an hour or so of stored music. Either way, the ears had a brief respite from the sound. Also, the higher-quality sound of new music players makes it easier for users to turn up the volume to dangerous levels. High-volume levels can result in tinnitus, a condition in which the sufferer hears continuous buzzing in the ears.

Many tinnitus sufferers complain of buzzing, whooshing, chirping, hissing, ocean waves and even music in their ears. Some people only experience tinnitus occasionally, while others experience it 24 hours a day. The problem is associated with the sensorineural system, which transmits signals from the inner ear to the brain. An employee suffering from tinnitus is not going to exhibit increased levels of concentration.

As if this weren’t enough, employees walking around with earphones not only block out extraneous noise, but everything else, including warnings of imminent danger such as a fire alarm. This puts them at increased risk for personal injury.

For these reasons employers who permit the use of mp3 player or other personal music players in the workplace should establish guidelines concerning the length of time an employee can listen and in what areas mp3 player use is permitted.