4 things to know about fiduciary and employee benefits coverage

If you are the officer, owner or director who makes the decisions about your company’s employee benefit plans, your personal assets may be at stake without the protection of fiduciary and employee benefits coverage.

WHAT IS IT?

You may already be familiar with fidelity bonds required by the Employee Retirement Income Security Act of 1974 (ERISA) that protects the employee benefit plans from theft by fiduciaries. However, fiduciary and employee benefits coverage helps protect the decision makers in areas that the ERISA bond does not cover: liability claims, mismanagement or errors and omissions made while administering employee benefit plans such as 401(k), Employee Stock Ownership Plan (ESOP) and health insurance.

WHO ARE FIDUCIARIES?

Fiduciaries could be the plan’s trustees, investment committee members or even responsible parties who appoint those people. Even if you hire other professionals to invest assets or administer the benefits plan for your business, you retain the ultimate responsibility for selecting, maintaining and monitoring the performance of those professional managers.

Fiduciaries also could be those you have hired or placed in authority for administering your benefit plans. And, especially now that the Affordable Care Act has redefined our nation’s healthcare system, these plans are ever evolving and changing.

WHY DO YOU AND YOUR ORGANIZATION NEED IT?

Your fiduciaries could make an honest mistake in a change of forms, coverage explanations or the employee’s transfer in and out of a plan, leaving your organization subject to lawsuits, fines and penalties. As the decision maker, you may be named personally in a lawsuit. Claims can be brought by plan participants, the Department of Labor or a participant’s legal estate and may include allegations of:

  • Improper advice or disclosure
  • Breach of fiduciary duty
  • Neglect in administrating a plan
  • Lack of investment diversity
  • Inappropriate selection of advisors or even service providers

Consult your legal counsel and your company’s insurance professional to see if fiduciary and employee benefits coverage could help your organization cover the expense of litigation and the costs associated with these allegations.

RISK MANAGEMENT TIPS

Your organization can enhance your ERISA risk management program and limit your exposure by:

  • Doing regular performance reviews of your staff who oversee and make plan decisions.
  • Using established investment firms when handling plan assets.
  • Having an actuarial firm review your plans annually.
  • Using a law firm with experience in ERISA regulations to make sure plans are ERISA compliant.
  • Consulting your local Ayres Group AgentSource: Cinfin.com

Study says voice-to-text no safer than regular texting

So much for all those systems that allow you to convert your voice to text messages. Reuters reports that a new study by the Texas Transportation Institute at Texas A&M has found the technology to be no safer to use while driving than employing a traditional handheld device. The study found that drivers took around twice as long to react to situations on the road as they did while they weren’t texting and that eye contact with the road decreased as well.

The study used 43 participants who were tasked with driving around a test course, first without any electronic devices and then with a voice-to-text system. Interestingly enough, using the speech-to-text device actually took longer than simply typing out a message on a phone. Despite this fact, the drivers said they felt safer while using the hands-free option. Researchers said that this response could lead drivers to attempt to text even when it isn’t safe to do so.

A checklist for safe snowmobiling

Whether it’s to enjoy the thrill of the ride or the beauty of nature, to go places unreachable by other means or just to spend time with family and friends, millions of people enjoy the outdoors on snowmobiles.

The International Snowmobile Manufacturers Association (ISMA), representing the four North American snowmobile makers, reports 1.3 million registered snowmobiles in the United States. Snowmobile-related activities account for $26 billion in economic activity annually, including accessories, supplies, gasoline and tourism. While some use their machines for work, about 80 percent use them for leisure activities.

Snowmobiles are generally registered and regulated by individual states, and no central system compiles reports on snowmobile accidents, injuries or fatalities. Of those tracked by several states, most are the result of collisions with trees or other fixed objects with excessive speed or alcohol impairment as the most common contributing factors.

ISMA promotes safe snowmobiling through its Safe Rider program, and cites dozens of ways to protect yourself and those around you.

SAFETY TIPS

  • Ensure your snowmobile is in proper mechanical operating condition before going on a ride. Check gas, oil, belt condition and carbides under the skis before each ride.
  • Dress for the conditions! Layering clothing, including a windproof outer layer, is the best way to stay warm on cold days. Fingers and toes typically get cold first, so be sure to wear warm gloves (mitts with liners are best) and insulated boots.
  • Wear a safety-certified helmet in the right size. You should have a clear face shield on the helmet or a pair of goggles to protect your eyes from the sun and wind.
  • Avoid riding alone, especially at night. If you do, make sure you tell others the route you will be taking so they will know where to look if you are overdue.
  • Stay on the marked route when riding trails on private property. Hidden objects, such as fences, tree stumps and stretched wire, may be concealed by snow.
  • Slow down! Speed is a contributing factor in nearly all fatal snowmobiling accidents. Drivers should proceed at a pace that allows ample reaction time for any situation.
  • Stay RIGHT when riding on trails, especially on corners or when cresting hills to avoid colliding with other snowmobiles coming from the opposite direction.
  • Carry a first-aid kit. At a minimum, it should include a flashlight, knife, duct tape, compass, map, tow rope and waterproof matches.
  • Carry a fully-charged cell phone; it can be a terrific asset if trouble arises, but keep in mind that cell phones have limited service range in remote areas.
  • Use caution when crossing roads — come to a complete stop, make sure no traffic is approaching from either direction, then cross at a right angle to traffic.
  • Don’t drink and ride! Drinking alcohol before snowmobiling or during your ride slows your reactions, impairs your judgment and is a leading contributor to snowmobiling deaths.
  • Stay next to the markers if a trail crosses waterways. Ice conditions are never guaranteed, as rapidly changing weather and moving water affect the thickness and strength of ice.

This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. See your local Ayres Group Agent agent for insurance coverage and advice.

Courtesy: Cincinnati Insurance

Ho! Ho! Ho! Santa reviews his insurance policies

Santa is a busy man this time of year, making toys and preparing his sleigh for the big day. Like many business owners, he relies on his local Ayres Group Agent. Santa has the policies he needs to cover his workshop, employees and their products. Do you?

Read Santa’s insurance list, then contact your local Ayres Group Agent to help you check yours.

 

santa-small-infographic

Courtesy of The Cincinnati Insurance Company

Don’t fall victim to a crime this holiday season

The busy holiday season provides numerous chances for crimes of opportunity.

From robberies to identity theft, criminals are looking for ways to steal your gifts, credit card information, cars and anything else they can take easily.

Safety starts at home

Burglaries increase by 11% during the holidays, and property stolen from vehicles increases 17%.

And there are some risky behaviors that can increase the chances of a robbery claim. More than 50% of Americans say they have left a door unlocked for a friend or family member and 52% have left a key hidden somewhere. This also means easy access for would-be burglars.

Frequently, Christmas trees are near doors or windows, providing burglars with a clear view of the presents under the tree. Consider storing gifts out of sight and putting them under the tree Christmas Eve to make them less enticing to thieves. Use timers for lights throughout the house to make the home appear occupied and help keep robbers away. Make sure doors and windows are locked before leaving or going to bed.

Related: Christmas tree fires: A deadly hazard you can prevent

While you’re spreading some holiday cheer this season, don’t forget to take these precautions to avoid becoming an unintended victim.

Christmas tree fires: A deadly hazard you can prevent

Each year, U.S. fire departments respond to nearly 230 home structure fires that start with Christmas trees. Home Christmas tree fires cause an average of six deaths, 22 injuries and more than $18 million in direct property damage annually, and the danger can extend beyond Christmas.

According to a November 2015 report on Christmas tree fires by the National Fire Protection Association, one of every 40 reported home structure Christmas tree fires results in a death. Nationally, an average of one death per 142 total reported home structure fires occurs – meaning fires that start with a Christmas tree are more than three times as likely to result in a fatality.

Electrical failures or malfunctions are involved in nearly one-third (32 percent) of home Christmas tree structure fires. Decorative lights are involved in 12 percent of these incidents. Seven percent of home Christmas tree fires were started by candles.

Home Christmas tree fires are about equally likely to occur in December (44 percent) and January (37 percent), the NFPA found, with the 10 dates with the largest shares of home Christmas tree structure fires occurring after Christmas.

To prevent a Christmas tree fire and holiday injuries in your home:

  • Check the tree for freshness when you buy it, and inspect it daily for signs of aging. A fresh tree is green. Its needles are hard to pull from branches and do not break when bent between your fingers. The bottom of a fresh tree is sticky with resin. When tapped on the ground, a fresh tree should not lose many needles.
  • Keep the tree stand filled with water.
  • Place the tree out of the way of foot traffic, and do not block doorways and exits with the tree.
  • Place live trees away from heat sources, such as fireplaces, vents and radiators. Because heated rooms rapidly dry out live trees, monitor water levels daily. A heat source too close to the tree causes one in six (16 percent) Christmas tree fires.
  • Use tree lights that have been tested by a nationally recognized testing laboratory such as Underwriters Laboratories (UL), Intertek (ETL) or the Canadian Standards Association (CSA). Lights for both indoor and outdoor use must meet strict requirements that testing laboratories are able to verify. UL’s red holographic label signifies the lights meet safety requirements for indoor and outdoor use. UL’s green holographic label signifies the light meets requirements for indoor use only.
  • Check each set of lights. Examine new and old lights for broken or cracked sockets, frayed or bare wires, or loose connections. Throw out damaged sets.
  • Make sure Christmas tree lights are off before going to bed each night or if leaving your home for extended periods.
  • Check extension cords. Make sure each extension cord is rated for the intended use and is in good condition. Do not use cords with cuts or signs of fraying.
  • Be aware of burnt out lights or cords too close to the tree.
  • Keep holiday candles away from Christmas trees, surrounding furniture and décor.
  • Look for the label “fire resistant,” if buying an artificial tree. Although the label does not mean the tree will not catch fire, it does indicate the tree is more resistant to catching fire.
  • Prevent shock; do not use electric lights with metallic trees.

And, as the holiday season progresses, keep an eye on the general condition of the tree. If you doubt its safety, set it outside and discard or recycle.

Courtesy of The Cincinnati Insurance Company
blog.cinfin.com

Planning a hotel or motel stay? Think about fire safety

An estimated 3,900 hotel and motel fires are reported each year in the United States. Use these tips to ensure that you stay safe during your vacation or business overnight.

PLAN AHEAD
  • Choose a hotel or motel that is protected by both smoke alarms and a fire sprinkler system. The U.S. Fire Administration provides a master list you can search to find hotels and motels that adhere to life safety requirements.
  • Pack a flashlight and keep it on your nightstand in case you need to escape in the dark.
FAMILIARIZE YOURSELF
  • Read the fire evacuation plan carefully. If one is not posted in your room, request one from the front desk.
  • Locate the two exits nearest your room and fire alarms on your floor.
  • Count the number of doors between your room and the exits to assist you in the event of an emergency evacuation.
ESCAPE SAFELY
  • If the fire is in your room, get out quickly. Close the door, sound the alarm and notify the front desk.
  • If the fire is not in your room, touch the door with the back of your hand to see if it is safe to leave.
    • If your room door is hot, do not open it. Instead, seal the door with wet towels or sheets. Turn off the fan, heater and air conditioner. Call the fire department to give your location.
    • If the door is cool, open it slowly. Be ready to close it quickly if there are flames on the other side. Take your room key with you in case fire blocks your escape and you need to re-enter your room.
  • Stay low by crawling on the ground, where the smoke is the least dense, to the nearest exit.
  • Always use a stairwell, never an elevator.

Courtesy of The Cincinnati Insurance Company
blog.cinfin.com

Ride sharing may create insurance gaps

Drivers and riders who participate in ride-share alternatives to taxi services may be subject to significant insurance gaps. If you participate in ride-share services as a driver or if you use these increasingly popular services, make sure you have appropriate insurance coverage.

Ride-share programs on the surface sound like a win-win situation: if you need a ride, you can download an app to your mobile device to find and arrange transportation in a driver’s personal vehicle. A simple swipe of your credit card pays the driver. So, instead of hailing a taxi cab  ̶  which can sometimes be hard to do  ̶  you can quickly get where you need to go and the driver is paid for his or her time and distance traveled.

Ride-share drivers, passengers, other drivers on the road and even pedestrians could all be affected by the insurance protection provided by the network companies that coordinate the ride-share relationship. Some ride-share network companies advertise that they have insurance policies that can protect drivers and their passengers. But there is no standard policy, and without a policy in hand, it becomes difficult to know which specific circumstances trigger coverage or what situations might be excluded.

Additionally, the insurance coverage provided by the ride sharing company may apply only while a passenger is actually in the vehicle. The policy may not provide coverage when the vehicle is on the way to pick up a passenger or after a passenger is dropped off. To complicate matters even further, protection provided by the primary insurer of the driver’s vehicle may exclude coverage while a passenger is in the vehicle or even while the ride-sharing app is turned on or enabled, whether or not a passenger is in the vehicle. This could result in a significant coverage gap for the driver in the event of a loss.

If you or a driver in your family is interested in providing transportation services through a ride-share service, check with your insurance agent first to learn about uninsured liability you may be assuming and what, if any, coverage is provided by your personal auto policy. Personal auto policies were not designed to cover exposures such as ride-sharing, and livery is typically excluded. Ride-share drivers cannot assume that their personal auto insurance will provide protection for anyone injured or any property damaged in an accident, even if they provide transportation-for-hire only on a part-time or incidental basis.

Riders planning to use ride-share services also should consider the risks. If you are injured while using one of these services, will your medical expenses be covered? Would you be compensated for the time lost from work that your injury might cause? Ask to see proof of insurance before using a ride-share service.

The ride-share industry is changing rapidly, and states are gearing up to provide more oversight and regulation. Until they do, consider carefully the risks you take on as a rider or driver.

 

Courtesy of The Cincinnati Insurance Company
blog.cinfin.com

Coverage for your collector vehicle: Agreed value

Certain strokes of engineering border on artwork: an idea that manifests itself in the creation of something truly beautiful.

Imagine yourself behind the wheel of one of those beautiful pieces of machinery, zooming through a twisting, scenic, back country road usually reserved for a postcard. Sunlight reflects off the mirror-like finish, and the engine purrs sweetly, tuned ever so carefully down to the most minute detail.

You open your garage door and admire it, ready to climb in and escape for a while. But one large question lurks in the back of your mind: how do I make sure my investment is properly insured?

Unlike a regular passenger vehicle that you drive every day and that depreciates over time, a collector car is an investment. In more cases than not, it appreciates in value. Properly insuring the vehicle to an acceptable value is essential.

Your insurance company should be able to insure the vehicle on an agreed value basis, where you and the insurance company agree in advance that in the event of a covered total loss, the agreed value is the amount you will receive for the vehicle. Depending on the value of the vehicle, the company may require that the vehicle be professionally appraised prior to insuring it. Having an appraisal regardless of value can set your mind at ease as well as give your insurer confidence there will be no difference of opinion on the value of your treasured vehicle.

Adding a collector car to an existing auto policy also adds an element of simplicity to the insurance process. Instead of dealing with multiple policies with multiple carriers, you’ll have one policy and one carrier. The same liability coverages should apply to your collector car as they would to your everyday vehicle. In addition, the collector vehicle could also earn an additional credit from a multi-car discount.

When choosing a company to insure your collector vehicle, make sure the company can offer you agreed value as well as an option to insure the car on the same policy as your everyday vehicles. These two aspects of insuring a collector vehicle are sometimes overlooked, but are the most important considerations. Your Ayres Group agent can advise you.

By streamlining the process, you spend more time enjoying your vehicle and less time worrying about how to insure it.

Courtesy of The Cincinnati Insurance Company
blog.cinfin.com

Bright idea: Check your holiday lights

Holiday lights can brighten the season – literally and emotionally – but they also present potential risk for fire and shock hazards. Before installing holiday lighting, take extra time to do a safety check to protect people and property.

Holiday lights and other decorative lighting contribute to an estimated 150 home structure fires per year, according to the National Fire Protection Association, with an average of nine deaths, 16 injuries and $8.4 million in direct property damage per year. Electrical failures or malfunctions were factors in 64 percent of the fires.

Reduce the risk of fire and shock from holiday lights by taking these steps recommended by theConsumer Product Safety Commission:

  • Use indoor and outdoor lights that conform with safety standards and that have been tested for safety by a recognized testing laboratory.
  • Use only lights that have plugs containing fuses.
  • Check each set of lights, new or old, for broken or cracked sockets, frayed or bare wires or loose connections. Throw out damaged sets. Always replace burned-out bulbs promptly with the same wattage bulbs.
  • Ensure extension cords are rated for the intended use.
  • Forego electric lights on a metallic tree. The tree can become charged with electricity from faulty lights, and a person touching a branch could be electrocuted.
  • Check labels before using lights outdoors to be sure they have been certified for outdoor use.
  • Stay away from power or feeder lines leading from utility poles.
  • Fasten outdoor lights securely to trees, house walls or other firm supports to protect the lights from wind damage. Use only insulated staples (not nails or tacks) to hold strings in place. Or, run strings of lights through hooks (available at hardware stores).
  • Turn off all holiday lights when you go to bed or leave the house.
  • Use caution when removing outdoor holiday lights. Never pull or tug on lights – this could cause stress on the connections that could create a fire hazard.
  • Plug outdoor electric lights and decorations into circuits protected by ground-fault circuit interrupters (GFCIs) to protect against electric shock. Portable outdoor GFCIs can be purchased where electrical supplies are sold. GFCIs can also be installed permanently to household circuits by a qualified electrician.

The U.S. Department of Energy recommends switching to LED lights to reduce heat and the risk of combustion or burnt fingers. In addition to being sturdier and more resistant to breakage, LED holiday lights last longer and consume 70 percent less energy than conventional incandescent light strands. It costs only $0.27 to light a 6-foot tree for 12 hours a day for 40 days with LEDs compared to $10 for incandescent lights.

A new safety rule for seasonal and decorative lights went into effect in June, allowing the CPSC to remove hazardous seasonal and decorative lights from the market faster and more effectively. If lights do not meet safety standards, the agency can require the manufacturer to recall the lights and can block imports of unsafe lights.

As you inspect newly purchased lights, check for:

  • wires that appear frayed, damaged or inadequate to carry the current according to the manufacturer’s instruction
  • strands that do not remain intact and functioning or pull out of the plug when stretched
  • lights that do not shut off to guard against excess current – such as with a fuse or ground fault circuit interrupter

To report a dangerous decorative or seasonal light, go online to www.SaferProducts.gov, call CPSC’s Hotline at 800-638-2772 or use its teletypewriter for the hearing impaired at301-595-7054.

The Electrical Safety Foundation International, a nonprofit organization dedicated exclusively to promoting electrical safety at home and in the workplace, offers additional safety tips for Indoor Lights and Electrical Decor.

 

Courtesy of The Cincinnati Insurance Company
blog.cinfin.com