The Name Game

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What is the importance of the name on an insurance policy? It turns out there is plenty of importance because the coverage is going to respond to the person or entity listed as the named insured and any others that are included by definition in the contract – and nobody else. For instance, I find that many homeowner policies list just the husband as the named insured. Yes, the spouse and any relatives are included as insureds – but only if they live in the residence premises. What happens if there is a separation and the wife moves out? If she is not listed specifically on the policy, she has no coverage because she is no longer a resident. I am also finding that LLCs are becoming popular as an ownership mechanism for property – presumably to hide the identity of the owner from others who are not exactly friends. Some think that the LLC will provide a shield from liability. Not so fast on that one. There may be protection from creditors but not necessarily for a bodily injury incident. Many landlords think that by being added as an “additional insured” on their tenant’s policy, there is no need to carry insurance for themselves. The additional insured status will provide protection if the landlord is brought in on a suit that is due to the negligence of the tenant. However, if the claim is a result of something the landlord did or didn’t do, there is no coverage and therefore a separate policy for the owner/landlord is necessary. Then there is the unfortunate situation of the life insurance policy where the beneficiary was selected years ago – and not amended. So the proceeds of the policy go to the ex-wife or the long gone partner instead of the intended person or organization. Dale Carnegie said in “How to Win Friends and Influence People” that a person’s name is to that person the sweetest and most important sound in any language. In the insurance world the accuracy of a name is equally as sweet and important.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

“Nanny State”

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With so many parents both working these days, there has been a proliferation of mother’s helpers, nannies, and live-ins to help with the kids. If you are at a fancy cocktail party the term, of course, is “au pair” to refer to these employees. Yes, they are employees if they are “regularly” working for you and, as such, are entitled to workers compensation benefits from you, their employer. Unfortunately, the Ct. workers compensation statute doesn’t define the term “regularly”. You don’t have to worry about the occasional baby sitter or the boy that mows the lawn but it is an issue for those who are putting in an average of 26 hours a week. If those in the latter category were to be injured for any reason while on duty, they are entitled to full medical benefits and loss of pay. The homeowner policy will not respond because there is exclusion for those entitled to workers compensation. The solution is to purchase a domestic workers compensation policy, which will provide the benefits mandated by statute. The cost is usually around $1000 a year. The cost for a caregiver nurse is usually higher. If you get the person through a service, the latter may provide a policy for you. The policy will provide benefits for any employee you may have. It does not require names. At the end of the year the insurance carrier will review with you the final tally of salaries paid and may charge an extra premium if it is more than forecasted.

So if you are going to hire that cute girl from Norway, call your agent and discuss the necessity of workers compensation.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

 

“You’re Fired!”

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Being fired can be a traumatic experience for an employee – and also for the employer if there are repercussions from the event. The process of letting an employee go should be well thought out and the reason for termination documented as much as possible. Wrongful termination can be a costly backlash to a Firm and it is hard to defend against because the evidence is often subjective. The reason for a termination may be justified such as incompetence, bad work habits, or the person may no longer be needed. The retaliation from the employee could be in the form of alleged discrimination or even harassment. The charge of sexual harassment is most insidious since it is difficult to defend and disprove. Often these cases are settled even if the charge is bogus. Businesses can protect themselves from the allegation of wrongful termination through the purchase of Employment Practices liability Insurance. This coverage is especially important for Firms that primarily have clerical personnel and where turnover may be frequent. However, any business is vulnerable and should consider purchasing insurance. Many employment litigation cases are settled-often for high amounts and therefore the defense cost element of the insurance program is critical. My advice would be to have a competent labor attorney as an ongoing resource to help prevent any unpleasantness resulting from a firing. Early counseling on a prospective firing would be much less expensive than defending an actual employment lawsuit. Legal advice coupled with insurance protection will help take the fear out of saying “you’re fired”.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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