How to Prepare your Business for a Hurricane

There are currently three named storms in the Atlantic Ocean (Hurricane Florence, Helene, and Isaac). There is an additional storm near Hawaii (Hurricane Olivia) in the Pacific Ocean.  When speaking with NBC News, Phil Klotzbach; an atmospheric science researcher at Colorado State University said, “The thing that’s interesting now is the Pacific is still active, but the Atlantic is very active, which isn’t normal.  I’m surprised to see the Pacific and Atlantic active at the same time.” Because of this active season, it is important to prepare both your home and office for the damages of a tropical storm. With September being National Preparedness Month, it is a great time to prepare your business for a natural disaster. Here are six ways to prepare your business for a Tropical Storm.

Take before and after photos

Taking up to date photos can help for a number of reasons. Most importantly, it is a record of the condition of your property and equipment prior to a storm. If you have not taken thorough pictures of your property, or have not taken them recently, now is the time to take an inventory of the property and equipment your business depends upon.

Call your Insurance Agent

If you have not done so already, now is a great time to give your insurance agent and carrier a call. If you decide to take a photographic inventory of all property and equipment, it may be beneficial to put these photos on file with the insurance carrier. The carrier should have information that may help you prepare for and deal with an emergency. In the days after the hurricane, people within the insurance industry may be very busy. Getting ahold of them at that time may not be an easy task.

Create a Disaster Kit

If you have not already done so, now is the time to create a disaster kit.  What is included in a disaster kit may vary based upon where you are located. In New York or Massachusetts, the contents of a disaster kit may be very different from the contents of a kit in Southern Florida. Most all kits should include adequate food, water and other supplies to last for 72 hours. Additionally, batteries, first aid supplies, medications, and alternative sources of power should be include in most disaster kits.

Develop a Communication Plan

When a Hurricane strikes, cell reception is commonly not reliable. Having a plan for how you are going to communicate with your employees is crucial to get necessary messages to all of your staff. Finding out what forms of communication your staff likes to use is important to determine before a disaster occurs. Some employees may prefer a text, others want an email, some may want an old fashioned phone call to their landline (Some people do still have landlines). You can find out how to best get ahold of your staff if you test your communication plan in advance.

Create a Business Continuity Plan

If you do business regionally, nationally, or internationally; one thing you will notice quickly after a hurricane strikes is that life keeps on going in other parts of the country. Even though life has essentially stopped in or near the hurricane impacted area, customers in other areas still need to keep business moving. If your business provides necessary services for businesses in other parts of the country or if you ship products that other businesses depend upon, you need to have a plan in place to get the business up and running quickly after a hurricane. Most people will understand if there is a slight drip in service while you are dealing with the after effects of a natural disaster. Regardless, the quicker you can get the business back up and running the less likely you are to lose customers.

Keep your insurance info and other vital docs safe

Vital documents and key phone numbers may be crucial when it comes to responding after a hurricane has struck. Vital documents include articles of incorporation, deed to any properties the business owns, contact information for key local businessman, customers, partners, and your insurance agent. Being able to get ahold of these people and to have the documents needed to get your business whole again quickly.

Evacuation Plan

Hurricane Evacuation Plan: How to Safely Evacuate Your Family

https://www.directenergy.com/learning-center/weather-readiness/hurricane-evacuation-plan

https://www.fema.gov/news-release/2018/06/20/its-hurricane-season-do-you-have-evacuation-plan

https://www.statefarm.com/simple-insights/safety/follow-this-hurricane-evacuation-plan

Create a Go Bag

In this go bag you should include items for Every Family Member, Including Pets

Store a Comprehensive Emergency Kit in Your Vehicle

Assign an Out of State Point of Contact

Plan Routes to Family Meeting Spots

Identify Possible Transportation Options

Take All Evacuation Orders Seriously

Have a Backup Plan to Shelter in Place for Sudden Storms

Safety Programs and a focus on Risk Management are crucial parts of running a successful Roofing Company

Roofing companies can be a difficult to industry for insurance companies to quote insurance coverage. There are two primary reasons why this industry is difficult to offer Workers Compensation Coverage, employees working at heights and employees who drive as a part of their job. First, roofing companies have employees who are working at heights frequently. This risk does not necessarily cause there to be an uptick in the amount of claims a business has, but the claims they do have tend to be severe in nature. The risk of employees driving as a part of their daily activity tends to raise both the frequency and severity of claims a business faces. Here are several ways to help your roofing company plan for, deal with, and improve the risk management process of your business.

Height Risks

Working at heights is a huge risk from the perspective of an insurance carrier.  This is not so much because of the quantity of claims in this industry, but more because the severity of injuries involved in a fall tend to be severe. Severe claims tend to rack up larger medical costs and result in additional time out of work for the injured worker.

Driving Risk

Any business that has employees who are driving from location to location as a part of the work has an elevated amount of workers’ compensation claims. These businesses have a higher quantity of claims and the claims tend to be more severe. Implementing a driver safety program and running regular driver background checks is a must to keep your employees and your business safe.

Having safety as a part of your company culture is extremely. Especially in more risk adverse industries like roofing.  A safety program should be a part of any roofing businesses risk management protocol. When implementing a safety program, the protocols should be clear and concise. Over time it should be ingrained in to the workforce for all employees new and old.  Implementing questions about safety into the hiring process may be able for you to weed out some potential employees who do not grasp the severity of the risks

Workers Compensation for Roofing Companies

Workers Compensation for Roofing Companies is an important part of any business owners responsibilities. In most states, roofing companies are required by law to carry both workers compensation and general liability insurance. For this reason, most businesses start with this required coverage. In most instances, this is not the only insurance a business should secure. Workers compensation is frequently referred to as the ‘exclusive remedy’. This term developed because the workers compensation system provides benefits to both employers and employees. Employers benefit from the fact they cannot be sued for injuries that occur as a part of normal business operations. Employees benefit in the form of medical costs and some lost wages when they are hurt and not able to work.

Because Roofing is such a risky industry, it is important for business owners in this industry to pay attention to the businesses experience modification rating. This is a rating that takes in to account; the revenue of the business, the classification code of the employees within that business, and the claims history of the business. Companies with more claims will have a higher rating and consequently have a higher rating. This also results in these businesses having a higher rate of premium for workers compensation and other forms of commercial insurance. The best way to keep this rating low is to implement a safety program that includes driver safety protocols and an in-depth return to work program.

Pay as You Go Workers Compensation Insurance

A roofing company may be in an industry that can benefit from Pay as You Go Workers Compensation. Pay as You Go allows employers to get coverage in place at a much lower amount compared to a traditional workers comp policy. This alternative payment program also reduces the likelihood of a mid-term audit because the payroll is audited monthly instead of done as an estimate at the beginning of the term. Being audited mid-term is time consuming and costly for the business.

Return to Work

Another important part of the workers’ compensation system for businesses in more risk adverse industries like roofing is to have an effective return to work program.  If you work in a physical environment like the roofing industry, injuries are eventually going to happen. Many studies have shown the quicker an employee gets back on the job, even in a limited capacity, the less likely they are to wind up on long term disability. This prevents claims from getting out of control and having a negative impact on the businesses experience modification rating.

Classification Codes

Like many industries roofing has more than one industry classification code.  It is important for you as a business owner to spend some time with your insurance agent discussing exactly what you do and do not partake in as a part of your business. Making sure that your business is properly classified can have a dramatic effect on the amount you pay for workers’ compensation insurance.

Below is a list of classification codes commonly used by businesses in the roofing industry.

10 Ways to Prepare your Home and Office during National Preparedness Month

National Preparedness Month is being celebrated throughout the month of September. Spearheaded by the Federal Emergency Management Association (FEMA) and the Red Cross, this promotion is meant to bring awareness to families and businesses of the need to plan ahead and prepare for natural disasters. Here are ten ways you can prepare your home and office during National Preparedness Month.

Make a Plan

Get together with your significant other or the key stakeholders at your business and put down in writing what your plan is for preparing for a natural disaster.  Included in this plan should be what you are going to do ahead of time to prepare your family and business before a disaster strikes, how often you are going to monitor these actions, and who is going to be in charge of all these steps. The more time you spend preparing your family and business to be prepared, the better everyone will respond when a disaster strikes.

Create a Disaster Kit

After you meet with the key stakeholders in your family or within your business, it is important to come up with a kit full of items you may need in the event of an emergency. There are many things you could include in an emergency kit. Food, water, batteries, first aid supplies, and possibly a generator are included in most kits. Determining what additional items need to be in your kit should be determined when developing an emergency plan. There should also be a timetable for when these kit is going to be inspected periodically. Nothing is worse than needing a first aid kit and all the medicine included in the kit is expired.

Communication 

Having a plan for how you are going to get ahold of all family members, close friends, neighbors, employees, and customers. It is important to know what is the best way to get ahold of these people fast. Some people prefer a text, others prefer an email. Some people would prefer to receive a message through Facebook Messenger and some people still want to receive an old fashioned phone call. Knowing how to get ahold of the key people quickly is important. Practicing these modes of communication periodically is important to a smooth communication plan when a disaster strikes.

Practice the Plan

Periodically you should practice your plan from time to time and National Preparedness Month is a perfect time to do so. June is National Safety Month, and that is a great time to test run your plans at the beginning of the Summer. When you practice the plan within your family, the head of household should know it and attempt to communicate with everyone in the house. Talk about where you would go and what you would do if a disaster were taking place at this very moment. Within your business you should attempt to contact your employees periodically. This may be as frequently as once a month or once a quarter. No matter how frequently you decide to practice your readiness plan, it is important to practice and evaluate how the plan worked.

Back-up Power

There are many ways to provide back-up power for your home and office. The type of back-up power you may need depends a lot upon where your family and business are located. If you live in Boston Massachusetts, you are more likely to be dealing with a Winter Emergency. may be dealing without power during a very cold period of time. In this case you may need to invest in a generator to keep your home and office heated while dealing without electricity. If you are located in a mild climate that does not face regular disasters like ice, hurricanes, tornadoes, or earthquakes; you may be able to go without an expensive generator because you may not need it very frequently. This should be part of the discussion you have when coming up with your preparedness plan.

Protect Important Documents 

Most families have important documents that may be necessary during an emergency response. In your personal life, you should keep the phone numbers of important people and organizations in writing. It is important to remember to keep these written down and not only stored in your phone. You may not have a charged phone or cell reception after a disaster. For that reason, it is important to have important phone numbers written down. You should also keep copies of the deed to your house, your businesses articles of incorporation, your passports, your insurance policies, and any other documents you may not be able to do with out during an emergency response situation. A fire-proof safe is always the best place to put these documents.

Business Continuity

If you have lived through a natural disaster of any kind, one thing you will notice fairly quickly is that life in other parts of the country and the world keeps going on. This is especially important if you are a business owner who does business with other parts of the country and internationally. Your clients still accept products to be delivered and services to be done. It delays their business from operating if you cannot fulfill your promises during a time of emergency. Now in many scenarios there is little you can do to get back to work for a certain period of time. Most people you interact with will understand your situation, but the more you plan ahead for getting your business back up and working the quicker you can fulfill those orders. This will go a long way to keep valuable business relationships on even ground. It can actually be an opportunity to show your customers how much you value your business.

Financial Preparedness

Having your financial life in order during a time of emergency can be very comforting to those who depend upon you. Keeping some cash on hand in the event businesses are not able to accept credit and debit cards is a wise decision. Keeping the the numbers to important financial records is equally important when the banking system gets back to work.

Cyber Preparedness

Most businesses store some amount of information electronically. Having a plan to keep access to those documents and to keeping those documents secure is crucial during a disaster. If you plan to back up these documents via the cloud or some third party management company, it is important to make sure those documents are safe. Taking time to discuss what issue may arise and how you plan to deal with them will give your customers an immense amount of comfort while they are dealing with a stressful situation.

Speak with Your Insurance Agent

Before a disaster happens, it is important to periodically sit down with your insurance agent to determine what types of insurance you do and do not need. They also can help you determine what documents you need to keep handy to speed up the insurance claims process. They can also help you know what types of pictures are necessary to help insurance underwriters promptly process a claim after a disaster.

For Small Businesses throughout the United States, the loss ratio is one of the single most influential aspects of the business that is controllable in relation to commercial insurance.  The loss ratio is a quick and easy way for an insurance company to determine the profitability of a workers compensation insurance policy. If your business has a lot of claims or a few large claims, the policy is not very profitable to the insurer. If the business keeps the claims low and not severe, it will have a positive impact on the Loss Ratio of the business.  The Loss Ratio is calculated by dividing the incurred losses by the total earned premium. A company with an extremely low loss ratio is considered a profitable policy and is a business insurance underwriters want to do business with. Conversely, an employer with a high loss ratio is less profitable. They will more than likely pay more for coverage and be less likely to get significant credits or discounts.

What is the Loss Ratio?

The loss ratio can be looked at two different ways.  From the side of the insurance carrier, the loss ratio represents what percent of earned premium they need to anticipate in order to cover the potential incurred claims.  When the underwriter at the insurance carrier knows the loss ratio of a business they are considering offering coverage to, this is the main aspect they use to determine how much to charge for premium and if they are going to offer the business coverage at all.  For example, Imagine a business that has a loss ratio of 95%.  That would mean that for every $1.00 of premium paid, the company is receiving $0.95 of insurance coverage. This is a large number and more than likely results in a loss for the insurer. If the underwriter offers coverage to too many of these businesses they may find themselves updating their resume before too long.  If the company with a 95% loss ratio paid a total of $25,000 in premium, then the insurer would only be left with $1,250 to cover their expenses. If an underwriter decide to write a company with a 45% loss ratio, it will have 55% of the paid premium to cover its expenses and produce profit. A company with a loss ratio of >100% would be receiving more money for claims than it is paying out for premium, and would cause the insurer to lose even more money. Businesses with this type of loss ratio are going to have a hard time finding carriers willing to offer coverage and are more than likely going to end up having to purchase workers compensation coverage from the state provider.

How can a Small Business Owner use the Loos Ratio?

A small business owner can also use the loss ratio of an insurance company to determine the health and profitable of an insurer. If the insurer is healthy than they are making wise decisions about who to insure and they are less likely to squeeze your business when you do have to make a claim or several claims within one year. A good example of this would be a company abc insurance company.

This is an insurance company that has a book of business of $100 million in premium. This means they take in $100 million a year in premium. If this company insures businesses with an average loss ratio of 40% the insurance company brings in $60 million more than it pays out in claims.  If a similar company has a loss ratio of 60% they bring in $40 million more in premium than it pays out in claims.  This is not what the insurance company profits. This is what it brings in before additional expenses.

Why Might a Company Have a High Loss Ratio?

There are a number of reasons why a company might have a high loss ratio.  The first and foremost reason is the company is not extremely safe. A lack of emphasis on safety typically leads to a bad history of losses. In most cases a high loss ratio indicates a company is riskier than a comparable company with a lower loss ratio.  However, the frequency and severity of the claims listed on the loss history must be analyzed to understand why the ratio is so high.  If the ratio is higher because of a large amount of small claims, the insurer could insist the company takes certain steps to lower the amount of claims. Lots of claims typically indicate a pattern and a pattern is easier to predict and prevent than one large claim.  On the contrary, if the reason for the high loss ratio is a small amount of high severity claims, there are steps the insurer can take to mitigate the cost of the claims. Implementing an effective return to work program is high on the list of things a company can do to limit claims getting out of control. The faster you get a worker back on the job in any capacity, the more likely they are to return to full-time permanent work.

Why Might a Company have a Low Loss Ratio?

There are multiple reasons why a company might have a low loss ratio. A primary reason is that the business has had very few or no claims in the past few years. This makes the policy highly profitable to the insurer. In many cases, this is a situation where the business owner feels the insurance policy is an inefficient use of the businesses resources, but if one claim occurs and they are sued, it could save them from facing hundreds of thousands of dollars if not millions if the business is found liable in a court of law. even if the business is not found guilty it can incur an enormous cost in court and lawyers fees.

From the side of the insurer, a very low loss ratio can be an indicator that premium rates are too high.  When rates are too high it results in slower growth, and this can cause the company to lose market share. Depending on the strategy of the firm, maintaining growth and achieving certain market shares may be the goals that management is pressured by.  Also, when premium rates are too high it is likely that profit is not being maximized.  For example, imagine a firm that has a book of business with $100 million in earned premium, and a loss ratio of 40%. It would be earning $60 million in profit.  However, if the firm was to lower their rates it would increase their amount of earned premium to $125 million while also increasing their loss ratio to 50%.  This would cause them to earn $62.5 million in profit, which is a $2.5 million increase in profit.  Even though the company’s loss ratio increases, they earn increased profit and therefore benefit from lowering their premium rates.

National Council on Compensation Insurance ( NCCI)

Most states partner with NCCI to determine classification codes, the rates for individual workers compensation class codes, and the experience modification factor (commonly referred to as the MOD). Some states have a portion of the state Department of Insurance do this task. Most states that do this without the help of NCCI are states like California that have an enormous economy, or states that have unique aspects to the industries within their economy.

A strong workers’ compensation provider of last resort is the strongest indicators of a healthy workers comp system within a state.  States that have a strong provider of last resort are nearly across the board the states with the lowest rates on workers compensation premium. What is right for the state with a large population like New York may not be best for a state like Missouri with a much smaller population and a larger rural population. Also, what is best for a southern state with a warm climate like Florida is not what is best for a state in a cold climate like Illinois.  Because of the vast differences in the workforce, the federal government has left the administration of the workers comp systems up to the state governments. There are three main ways in which states go about administering this necessary function for the business community; a state fund, a public private partnership, and the National Council on Compensation Insurance (NCCI).

Now there is one main reason for a need for a provider of last resort within the state workers compensation systems. That reason is because not all businesses are able to find insurance carriers willing to quote them coverage on the open market. In most industries an open market is the best way to monitor economic systems, but when it comes to providing insurance, it simply is not in the insurance companies best interest to quote coverage for some businesses or some industries. Some times a business cannot find coverage on the open market because of the business has several incidents a few years ina  row or few incidents that were fairly severe.  The business may also operate in an industry that is highly dangerous like off-shore oil-drilling or coal mining. In these situations, insurance companies may deem the business too much of a risk to offer an insurance policy. When this is the case the state steps in and providers a provider of last resort.