Tag Archives: Gary Grissom

Well It’s Not Like Choosing a Spouse, But Choosing an Insurance Agent Should Not Be Taken Lightly

If you own a business, you should have a commercial insurance policy, and may have other forms of insurance including professional liability, directors and officers coverage, etc. Before choosing an agentpurchasing your insurance policy, you must first select an insurance agent that you would like to work with. On the surface, insurance can seem like a commodity and many insurance agents treat it as though it is by selling policies simply on the basis of price. The reality is that insurance is more than a product – it is a critical tool in any business’s risk management strategy – and crafting a policy that provides adequate protection for your business requires more than a cursory review of your company and the business it is in.

Not all insurance agents are the same. The right insurance agent will approach their relationship with you as a partnership and not simply a sale. How to choose the right insurance agent for your business? Shop around and know what to look for when selecting your partner!

The call is yours

There are literally thousands of insurance agents and insurance companies that would love to have your business. The important thing for you as a purchaser is to know what you need. Are you simply looking to purchase the lowest price policy, or are you interested in reducing your overall business risk and ensuring that you are protected when risk becomes reality? If it’s the latter, a great approach is to seek advice from the lawyers and accountants who helped you open your business. Often, they can recommend the right agent for your needs.

Do some homework

Before meeting with an agent, it is important to have a basic understanding of the types of insurance products you may require. This is another situation where your corporate attorney or accountant may be able to help. With so many forms of insurance on the market, it can be difficult to understand which may be appropriate for your situation.

  • Workers’ compensation is a sophisticated product with subtle ways of determining premium.
  • Life insurance may be the best vehicle for a buy-sell insurance agreement.
  • Businesses with products have needs different than those that provide services.
  • Sole proprietorships need different security than partnerships or corporations.
  • Fire, flood, and others risks mean different things in different locations and different industries.

Before an agent can recommend what types of policies you should purchase, they must first identify and measure the risks to your business. Only then can they determine the best way to manage them. For this reason, you need the agent who has broad and deep experience in all lines of liability. Experienced and reputable professionals pursue continuing education and performance recognition. So, look for the initials after their name: CLCS – Commercial Lines Coverage Specialist, CLU – Chartered Life Underwriter, CRM – Certified Risk Manager, CPCU – Chartered Property Casualty Underwriter, or REBC – Registered Employee Benefits Consultant. There are yet more, but each of these represents years of coursework and testing.

What to value?

The ability to identify and manage risk is the key to a strong partnership with an agent, a holistic approach that reduces costs before they occur. Insurance rates are often based on the number and dollar value of claims, so it stands to reason that, to the extent that you can reduce the incidence and cost of claims, the better off you and your business will be. Look for the agent whose approach involves examining the broader risk management issues facing your business, and whose recommendations include more than simply purchasing insurance.

Accidents will happen, but communication and readiness can improve the odds. When employees and staff are well-informed about risks, their potential consequences, and workable prevention, safety becomes a team event. The agent who can provide material resources in the form of manuals, signage, and training is a personal value to your business. These are the partners you want to sign with.

Choose the agent for whom service is the unique value proposition. Value the commitment and mutual self-interest because it is to your advantage as well as the agent’s to develop and sustain the relationship.

Gary Grissom is a partner and Senior Risk Advisor at Texas Associates Insurors. Gary’s expertise extends to the construction, manufacturing and oil & gas industries where he partners with clients to develop effective cost-reducing risk management strategies.

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4 Small Business Legal Risks to Watch Out For

Every business has to make legal considerations on a daily basis, regardless of what industry they find themselves a part of. For small businesses and start-ups, legal considerations can often determine whether or not the company can achieve growth potential. Therefore, accounting for legal risks should be one of the fundamental characteristics of a small business’ enterprise risk management (ERM) strategy. Here are four legal risks that your ERM strategy must account for in order to safeguard your business.Insurance policy

Choosing your ownership structure

Choosing your ownership structure shows how businesses face legal risks before they even begin to operate. That’s why choosing the right ownership structure is such an important decision for businesses. This decision will impact whether or not you’ll be able to accept investors as well as how many and what types of investors. Your ownership structure will also influence whether you’ll be able to easily sell your company, what your personal legal liability will be and what your tax liability and benefits will be.

Litigation

Litigation is something that almost each and every operational business will have to deal with at some point. It is also something that can cost businesses a lot of money. For small business and start-up owners, legal fees can have a crippling effect on the company’s finances, often more so than actual settlements may demand. While juries tend to be sympathetic towards small businesses, the risk and cost of litigation is hardly ever justified and is something that should be avoided at all costs.

How do you avoid litigation? Seeking legal advice before you make any important business decisions that could lead to litigation can certainly help. Which brings us to our next point..

Failing to seek legal consultation when necessary

It’s only natural for small businesses and start-ups to avoid hiring an attorney in order to reduce legal costs. However, without appropriate legal advice, you run the risk of making decisions that could negatively impact on the business such as entering into legal agreements that don’t fully protect your interests. These failed decisions could end up costing the business much, much more than any legal consultation would. By failing to seek appropriate legal advice when necessary, your business may become threatened in the long run.

Ignoring Intellectual Property

Intellectual Property law is a complex area that is often avoided by small businesses, especially non-tech businesses that believe that they don’t face any intellectual property risk. However, failing to account for intellectual property and intellectual property insurance will leave your rights unprotected when it comes to the ownership of original ideas. This has the potential to significantly damage the future success of a small business, whether they realise it or not.

If your business is constantly experimenting and creating new technologies/processes that are unrivalled and eligible for patent, you may want to amend your employment agreements so that they clearly specify ownership of intellectual property. This can prove critically important when it comes to potential investments, particularly if you end up licensing your trademark to another company.

Legal matters may strike some small business owners as the itch that cannot be scratched, however, it is important to safeguard your business on an ongoing basis so that emerging legal implications are acknowledged and mitigated. By reviewing your risk management strategy and amending policy so that legal risks take focus, you can ensure your small business or start-up can become a success.

Small Businesses face many risks on a day to day basis but you can ensure the safety and future of your Business with a free risk assessment today.

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Establishing a Successful Disaster Management Communication Plan

The recent explosion at the Blue Rhino propane plant in Tavares, Florida was the second major chemical plant explosion of 2013, following April’s Fertilizer plant Explosion in West, Texas which left 15 dead and over 160 injured. The need for inspection of Risk Management Strategyand Health and Safety procedure within the booming Chemicals Industry is greater than ever, following yet another disaster which, thankfully, did not incur any loss of life. But it is up to the company to ensure Health and Safety procedure is up to date and that accidents like yesterday’s explosion can be properly prepared for. Here are some of the key areas that make up an effective Disaster Management plan.

Communication

Communication is a vital component of any risk management strategy. But the reality of a disaster is chaos is almost certain to follow. An effective communication strategy, however, can minimise confusion and contribute greatly towards a remedy.

Departmental communication within a company is important so that members of staff, on every level, are fully informed of a situation and briefed/instructed on what they can or cannot do. Similarly, communication with those who are affected by the disaster can help prevent rumour and panic. Any effective Disaster Management Strategy should prioritise communication with those affected by the situation, as the protection of public interest is important for the sustainability of the company. Communication with the media is also important in terms of getting the truth out there and controlling the situation. Even if uncertainty is rife following a disaster, giving a ‘no information’ answer is better than making no comment at all.

Organization

Of course disasters are totally unforeseen, but preparation for a worst case scenario can be helped by a solid organizational structure. Designating positions and establishing a centre for crisis control can go a long way in keeping a company on its toes in anticipation of a crisis. Organizational structure also involves ensuring adequate tools and equipment are put in place. An alternate power source, emergency supplies and press statements are just a few of the precautionary measures a company can take in preparing its Disaster Management Plan.

Media Relations Officer

Part of the Organization structure involves designating a representative to speak on the company’s behalf in the wake of a crisis. The Public/Media Information Officer should liaise with the incident control officer to assess the situation so he/she can inform the media and general public of the severity of the situation and the measures being taken to remedy it. The Public Information Officer will become the main contact point between those assessing the Disaster and everyone else outside the company.

Measuring the strategy

One of the most important elements of Risk Management is learning from your mistakes. Once the dust has settled, it is important to take a step back and assess the Disaster Management Strategy and its proficiency, as well as the company’s overall Risk Management Process. While it may not appear like an appropriate hallmark following a disaster, every cloud has a silver lining and learning from what went wrong can greatly help a company prevent things going wrong in future.

This is an introduction to creating a risk management plan, for more information you can ask us for help.

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U.S. Department of Transportation Shapes New Freight Policy

Last Thursday, the U.S. Department of Transportation announced the 47 people who will make up the new Freight Advisory Committee. The new committee assumes the task of devising a new plan to improve freight movement in the United States. Since there is no national agency that coordinates the movement of goods across state lines or the modes by which they are transported, the decision-making bodies are fragmented and inefficient.

Most existing agencies within the U.S. DOT advocate the use of highways, which certainly isn’t the only answer to the problem created by moving freight. By instead using rail and inland waterways (a more efficient and less polluting way to transport goods), trucks can be taken off the congested roadways. Major ports on the coasts also stand to benefit from the committee’s expertise and direction.

The eastern seaboard is slowly reaching a breaking point in an effort to get their ports up to spec for future years. Costs for fuel and consolidation in the shipping sector are spawning larger and larger ships, carrying more containers per unit of fuel. Many ships serving the Asia-Europe routes can’t fit into the expanded Panama Canal nor can they fit all but three U.S. East Coast ports.

Big problems are down the track if this course isn’t corrected. The West Coast ports can handle the bigger ships, which may cause a shift in the supply chain, rendering the new rail connections from the East Coast to the Midwest practically useless. Simply put, the new Freight Advisory Committee has a lot of work to do to keep imports to the East Coast ports steady.

The chosen members of the committee include: Terry Button, a member of the board of directors from the Owner-Operator Independent Drivers Association, who also works as a full-time farmer and truck driver; Mort Downey, Clinton’s deputy secretary of transportation; Karen Schmidt, executive director of the Washington State Freight Mobility Strategic Investment Board; and José Holguín-Veras, an engineer at Rensselaer Polytechnic Institute.

The likely changes in the industry as well as in public policy will result in modifications to transportation insurance policies. Business owners reliant on the supply chain should stay informed as the Freight Advisory Committee makes alterations by talking to their local insurance agent for the most recent updates.

If you have any questions about transportation insurance or what the Freight Advisory Committee means to your business, ask one of our experts today.

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Steaming Toward the ObamaCare “Train Wreck”

By Karl Rove

The Wall Street Journal
April 18, 2013

The implementation of this unpopular law is a story of missed deadlines and general bungling.

In congressional testimony last week, Health and Human Services Secretary Kathleen Sebelius blamed Republican governors for her department’s failure to create a “model exchange” where consumers could shop for health-insurance coverage in states that don’t set up their own exchange.

Nice try, but GOP governors aren’t the problem. Team Obama’s tendency to blame someone else for its shortcomings is tiresome. The Affordable Care Act requires HHS to operate exchanges in states that won’t operate their own. Since the act became law in March 2010, it has been abundantly clear that the agency would have to deploy a model exchange. It is Ms. Sebelius’s fault there isn’t one.

There is more to this failure. Even exchanges organized by Democratic and Republican governors may not be functioning by the health-law’s Oct. 1 deadline, because HHS has been slow with guidance and approvals.

Last month Gary Cohen, an official with the Centers for Medicare and Medicaid Services who oversees technology for the exchanges, told members of America’s Health Insurance Plans (a trade association) that he was “pretty nervous” about implementation. He hoped enrollment is “not a third world experience.”

Part of this problem stems from the way the law is crafted. For example, a subsidy to help small businesses provide insurance coverage while ObamaCare ramped up was so complicated and difficult to use that only 1% of its $40 billion budget was spent.

Other provisions have been poorly executed or needlessly delayed. Ms. Sebelius’s HHS has missed dozens of deadlines for major rule-making or program start dates required by the law.
For example, ObamaCare created the Small Business Health Options Programs, where small businesses could select insurance plans beginning in October with coverage starting in January. The program has been set up, but employees are offered only one plan, not a choice among many. HHS announced a full range of plans would be delayed until 2015.

Then there is President Obama’s promise that no American would be denied coverage because of a pre-existing condition. The Affordable Care Act set aside $5 billion to subsidize, through 2014, coverage for an estimated 270,000 to 350,000 people with pre-existing conditions and no insurance. So far 135,000 have been covered but the $5 billion is nearly exhausted. HHS stopped signing up people in February.

A long-term care entitlement, the so-called Class Act, turned out to be so fiscally untenable that Democratic support evaporated before its 2012 start date. The entitlement program was repealed in the December fiscal cliff deal.

Then there is the Independent Payment Advisory Board, the 15-person committee charged with reducing Medicare spending to a “target level” by 2015. Its recommendations take effect automatically unless overruled by a congressional supermajority.

By law, the board cannot “raise revenues or Medicare beneficiary premiums . . . deductibles, coinsurance, and copayments, or otherwise restrict benefits or modify eligibility criteria.” This means that the board would likely have to cut reimbursements to health providers who already receive roughly 80% of what private insurers pay for the same procedures for non-Medicare patients. This will discourage doctors from taking on Medicare patients.

The IPAB’s first recommendations are due Jan. 1, 2014 and are supposed to take effect a year after that. The president hasn’t appointed anyone to the board, and it’s unlikely he can come up with 15 nominees, get them confirmed, and have them in place to deliver recommendations in time. Maybe he plans to leave the recommendations up to the secretary of HHS, which is allowed under the health law, but that ought to concern anyone who’s seen Ms. Sebelius in action.

Or maybe the president will just let the deadline for IPAB recommendations slide. An ugly battle in 2014 over Medicare cuts proposed by a committee he appointed might rile up seniors in the midterm elections, leading to the defeat of House and Senate Democrats who voted for the law.

Still, the administration is eager to get one health-care program under way. ObamaCare provides $54 million to hire individuals and groups to facilitate enrollment when the exchanges begin this October.
There are rumblings in Washington that HHS believes more money is needed for these “navigators” or “helpers.” The House Energy and Commerce Committee wrote Ms. Sebelius this week asking what kind of groups are eligible, how they’ll be selected, what standards must they meet, how they will be trained and supervised, and what the success measures will be. This program could turn into patronage for Mr. Obama’s liberal allies such as unions and community activists.

The Affordable Care Act may be unworkable in the aggregate, but it is also dogged by incompetent implementation. Even Democrats are increasingly concerned. At a hearing on Wednesday, Sen. Max Baucus expressed his frustration about a variety of problems, including whether the health-insurance exchanges will be established on time. “I just see a huge train wreck coming down,” he told Ms. Sebelius.

A version of this article appeared April 18, 2013, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: Steaming Toward the ObamaCare ‘Train Wreck’ and online at WSJ.com.

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