Tag Archives: liable

Smartphones and Distracted Driving

Integrated smartphone technology will soon become “all but standard” on new car and truck models, with nearly 100 million vehicles featuring the smartphone technology by 2016, according to a report by Juniper Research. The technology will integrate a driver’s smartphone with a vehicle’s computer and navigational systems, enabling the vehicle to send and receive data via the Internet.

That data could prove invaluable to employers, who could use the information to increase fleet efficiency, comply with regulations and monitor driver behavior.

The technology does not come without risks, however. Some analysts worry that the integrated smartphone technology could increase distracted driving, which is already a major safety concern for employers.

Motor vehicle crashes are the leading cause of worker fatalities, and distracted driving dramatically increases the risk of such crashes. It is important to address the issue of distracted driving with employees who drive as a part of their job.

April is National Distracted Month. Check with your insurance advisor for more information you can use to help your drivers be safe on the roads, focusing more on the task at hand rather than the technology IN their hands.

Newfirst Insurors can help with drafting a safe driving policy and developing training for your company that includes guidelines on distractions and cell phone use.

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Does My Policy Cover Injured Volunteers?

Non-Profits thrive off of the hard work of volunteers; donations, tangible gifts, and the irreplaceable gift of time. While the question posed below specifically comes from a non-profit organization, there are issues to be considered when your employees do volunteer work on your behalf or when you yourself are the volunteer.

Question:

Our nonprofit organization depends heavily on the services provided by volunteers. Do any of our insurance policies cover medical expenses if a volunteer is injured on the job? Will our liability policies defend us if a volunteer sues the organization because of the injury? Is the organization covered if we get sued for an accident caused by the volunteer?

Answer:

These are excellent questions. Board members and staff of nonprofit organizations are right to be concerned about taking care of their volunteers and protecting the organization from liability that might arise out of the services provided by the volunteers. We are privileged to serve several organizations such as yours and this question comes up frequently.

Injuries to Volunteers

If a volunteer is injured while providing services for your organization, the first thing you need to know is that your workers’ compensation policy won’t provide benefits. Texas law doesn’t permit workers’ comp coverage on volunteers, other than those who work for government and emergency service organizations.

If a volunteer is injured while providing services at your location, your commercial general liability policy provides some coverage for his or her medical bills. The limit of coverage is very small – typically only $5,000. If the volunteer believes the organization or one of its employees is legally responsible for the injury, your insurance company will investigate the accident and offer payment if it agrees, or defend you and pay any resulting judgment if the volunteer sues, subject to the liability coverage limit.

If a volunteer is injured in an automobile accident while using a vehicle owned or leased by your organization, your business auto policy provides some coverage for medical bills and other benefits if you have purchased Medical Payments, Personal Injury Protection and/or Uninsured Motorists coverages, up to the limits purchased for those coverages. If the volunteer believes the organization or one of its employees is legally responsible for the injury, your auto insurance company will investigate the accident and offer payment if it agrees, or defend you and pay any resulting judgment if the volunteer sues, subject to the liability coverage limit.

If a volunteer is injured in an automobile accident while using his or her own vehicle, your policies won’t provide any coverage for medical bills. It might be a good idea to inform your volunteers of this fact and encourage them to review their own auto insurance policies with their agents to be sure they are adequately covered.

As you see from the information provided so far, covering medical bills incurred by volunteers while working for your organization is a hit-or-miss proposition. The best way to provide medical and other benefits to your volunteers is to purchase a special policy known as “Volunteer Accident Insurance.” This type of policy typically provides a wide range of benefits, including accidental death, accidental dismemberment, accident medical expense and occupational disability payments. High limits of coverage are available from most insurance companies offering this type of policy. Ask your agent for more information and a proposal.

Injuries to Others Caused by Volunteers

Your general and automobile liability policies cover the organization if a volunteer injures someone or damages property of others while working for you. If the accident involves an automobile owned by the volunteer, special coverage is needed, so ask your agent to be sure you have the appropriate coverage.

Your policies may or may not provide the same liability protection for the volunteer should they be sued individually for injury or damage caused by the volunteer. These policies usually provide the coverage unless the accident involves the volunteer’s own vehicle. Of course the volunteer should be able to rely on his or her own auto liability policy for this protection. It might be a good idea to encourage volunteers to review their own auto insurance policies with their agents to be sure they are adequately covered, especially if they are using their vehicles to transport clients of your organization. Special coverage is available to cover volunteers on your auto liability policy – excess over their own policies or primary if their policies don’t provide coverage for some reason.

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Employee Cellphone Use While Driving

Cellphone use has become commonplace, and text messaging, e-mailing and conducting business via cellphone have become routine. While the convenience of cellphones can be enormous, problems arise when using a one while driving.

A Nationwide Insurance poll found that 81 percent of cellphone owners admitted to talking on a cellphone while driving.1 While employers may be aware of the obvious benefits of allowing employees to use cellphones to conduct business while driving, they may be unaware of the significant liability risks associated with cellphone use while driving. A National Safety Council survey found that of employers who had a cellphone driving policy, 70 percent saw no decrease in productivity and over 20 percent saw decreases in employee vehicle crashes.2

Currently, there is mounting evidence supporting the dangerous link between cellphone usage and car accidents. According to Johns Hopkins University, as individuals focus on listening and engaging in conversation, the activity in the visual part of the brain decreases, even when using a hands-free device.3 In addition, the University of Utah found that drivers are as impaired on a cellphone as they are while driving under the influence of alcohol.4 The National Highway Traffic Safety Administration found that estimated that 3,000 fatal traffic accidents in 2011 were the result of distracted driving.5

As a result, if you have employees driving on company time, you need to be aware of your cellphone use exposure and take the appropriate steps to mitigate your risks.

Case Studies

In 2004, a Georgia employee making a business call while driving hit and caused serious injury to another driver. The employee’s company agreed to pay $5 million in damages after the court found that the company was liable since the employee was making a business-related call. In a different case, $2 million in damages were awarded to a child’s family after an employee hit and killed her in 2004. The family also sued the employee’s company after phone records revealed that the employee was talking to a client at the time of the crash.

In addition to third-party claims resulting from accidents, employers increasingly face claims by employees for health problems allegedly stemming from cellphone use. Although the science appears contradictory and inconclusive, some employees contend that the radio frequency radiation emitted during cellphone usage may lead to various forms of brain cancer or other illnesses. Employees who use cellphones while on the job have begun to file workers’ compensation claims and lawsuits based on this theory.

Minimizing Employer Liability

While there is no guaranteed defense to liability, developing an appropriate employee cellphone use policy, training employees about the dangers of talking on a cellphone while driving, and enforcing policies with signed written acknowledgments from employees can all help to limit an employer’s potential liability.

In the policy, beyond setting clear-cut rules limiting cellphone use while driving, offer suggestions such as informing clients of driving schedules to avoid calls while on the road, pulling over to place or receive an important call or asking a passenger to handle cellphone usage. Be sure to emphasize that while productivity is certainly important, more important is their safety and the safety of others on the road – safety that is neglected when using a cellphone.

Even with a comprehensive cellphone use policy, courts may still hold employers responsible for any harm caused by employees while on company business, so it is important to ensure that your policy is being upheld and enforced. Be clear about the importance of following the policy, and follow through with consequences if employees are found to be disobeying it.

State Laws

Several states currently ban the use of hand held cellphones while driving, and many states have taken an increasingly active role in addressing the relationship between driver cellphone use and traffic safety (see Texas’ stance on distracted driving laws). These laws are changing frequently, so employers should always be cognizant of their state’s laws and require employees to observe those regulations regarding cellphone use while driving (include the current state law in your policy, and require employees to review and re-sign it whenever the law changes). While state laws do not directly address employer liability, they have the potential to increase employer exposure for cellphone-related accidents. For more information about state requirements, access the Governor’s Highway Safety Association website at: http://www.statehighwaysafety.org.

In addition to updating your company Cellphone/Hand Held Use Policy and training program, employers should also review their insurance policies. For help assessing your company’s risk regarding employee cellphone use or for assistance in developing a Cellphone Use Policy, contact Texas Associates Insurors.

Sources

1 Distracted While Driving Survey, Nationwide Insurance, May 2008

2 National Safety Council membership survey report, September 2009

3 Multitasking: You Can’t Pay Full Attention to Sights, Sounds, John Hopkins University, June 2005

4 Drivers on Cellphones Are as Bad as Drunks, University of Utah, June 2006

5 National Phone Survey on Distracted Driving Attitudes and Behaviors, National Highway Traffic Safety Administration, December 2011

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Cyber Liability CGL versus Specialized Cyber Liability Coverage

Let’s face it….we live in a world of technology. GOOD technology. The only way to effectively protect the assets of your business is to carry adequate Commercial General Liability (CGL) Insurance coverage. A CGL policy protects your business from damages caused by bodily injury or property damage for which your business is found to be legally liable. CGL is usually triggered first in the event of a loss, so many business owners don’t feel an additional endorsement or stand alone policy is necessary.

A typical CGL policy contains three coverages:

  1. A.    Bodily Injury and Property Damage Liability (BI/PD) – the duty to indemnify and defend the insured for claims made due to bodily injury or property damage.
  2. B.    Personal and Advertising Liability (AI/PI) – same framework as Coverage A, except it insures claims for personal injury and advertising injury.
  3. C.    Medical Payments – insurer promises to pay emergency medical expenses for bodily injury for the uninsured or its employees as a result of an accident on the insured’s premises. It pays regardless of who is at fault.

Coverage B for Intangible Assets

If the threat exists that a) your company could be sued by a competitor for infringement or intellectual property theft, or b) you do not have the funds to cover legal fees associated with defending your patent or trademark, it is vital that you purchase this coverage. Defending infringement litigation can cost hundreds of thousands of dollars, not including the cost of damages and prejudgment interest. In patent infringement cases, attorney’s fees can easily top $1 million. Budgeting and planning for the protection of intellectual property rights may not only save your company a significant amount of capital, it may also help keep your business viable when legal bills accumulate rapidly.

Any act by the insured that somehow violates or infringes on the rights of others (referred to in the policy as an offense) is the subject of personal and advertising injury liability coverage, although only those acts that are specifically listed in the policy are covered. The coverage under the “advertising injury” provision is limited to those injuries that are directly related to the advertisement. Therefore, the policy covers debts owed by the insured party due to claims filed against it.

Coverage B policyholders are sometimes covered in cases relating to trademark infringement; however, copyright claims are only successful where they are directly related to advertising, and patent claims are rarely covered under the “advertising injury” provision. The cases which allow for coverage in a patent infringement case are generally limited to instances in which a court finds contributory infringement or inducement to infringe through an advertising medium. Since the “advertising injury” provision in a standard CGL is rather limited, many businesses consider additional coverage to protect their intangible assets.

There are three important exclusions in the AI/PI coverage that outline the need for additional intangible asset coverage:

  1. Excludes AI/PI arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights.
  2. Excludes AI/PI committed by an insured whose business is: (1) Advertising, broadcasting, publishing or telecasting; (2) Designing or determining content of websites for others; or (3) An Internet search, access, content or service provider (ISP).
  3. Excludes AI/PI arising out of an electronic chat room or bulletin board the insured hosts, owns, or over which the insured exercises control.

There will be a large coverage gap in a traditional CGL policy if you are a media company, technology company or any other company that does business predominantly on the Internet.

Specialized Cyber Liability Coverages

Because of the increase in the number of a) intangible assets companies possess and b) the number of companies doing business on the Internet, new types of liability coverages have emerged to meet specific needs.

Errors & Omissions (E&O)

E&O insurance, also known as professional liability insurance (PLI), helps fill gaps in traditional CGL policies by protecting professional advice- and service-providing companies from having to bear the full cost of defending against a negligence claim that a service the company provided did not have the expected or promised results.

An E&O policy can cover intellectual property losses due to copyright infringement and plagiarism while also protecting a business in case of a data breach or identity theft. For example, if an IT specialist at a company makes a mistake with the company firewall and allows malware to spread through the company’s network, an E&O policy would help cover the company’s losses from the exposure.

An E&O policy can be customized with several other coverages, such as:

  • Electronic Data Loss – A fire or virus could lead to a business losing all of its data. An electronic data loss policy covers against this data loss and helps replace any income a business loses as a result of the loss.
  • Data Breach – This coverage is becoming more popular as the number of expensive data breaches increases around the globe. Data breach coverage can help a business cover the costs of customer notifications and any defense costs associated with the breach.
  • Media Liability – This coverage protects media-related firms from claims arising from defamation, invasion of privacy, plagiarism, copyright infringement, etc.

Directors & Officers (D&O)

A D&O policy insures upper management against claims of securities fraud, breach of fiduciary and other types of liability. For example, shareholders of a company could sue a company’s directors and officers for not putting the proper measures in place to stop a data breach.

Claims Made vs. Occurrence Policies

When purchasing CGL and cyber liability coverage, businesses have two primary policy types to choose from—claims made and occurrence. A claims made policy covers claims while the policy is in force, while an occurrence policy provides coverage for when the act occurred. Both types offer distinct advantages and disadvantages, so it is wise to do research to determine the best type of policy for your business.

  • Cost – Claims made policies are generally cheaper than occurrence policies. Premiums for claims made policies start low but increase each year to reflect the increased likelihood for claims in the future. While occurrence policies are generally more expensive, there is only a one-time cost with no additional fees.
  • Selecting coverage – With a claims made policy, coverage limits are easier to choose because they can be increased annually. You run the risk of being underinsured with an occurrence policy because the coverage you selected 10 years ago might not be able to cover expenses from a claim made today.
  • Pre- and post-coverage options – You will need to purchase “nose” and “tail” coverage with a claims made policy because if you are sued in 2006 for services provided in 2004, you will only be covered if your policy has an Extended Reporting Period (ERP), or “tail” coverage. Tail coverage can be expensive, but it is often included for free if you have been insured with the same company for a certain amount of time or it can also be offered as an incentive for switching to another company. Similarly, a “prior acts” endorsement, or “nose” coverage is needed when switching insurers to cover claims that occurred before the new policy was purchased. With an occurrence policy, no nose or tail is needed. It is easier to change insurance companies with an occurrence policy because no pre- or post-coverage endorsements are necessary.
  • Long-term protection – An occurrence policy will give you better long-term protection because you are insured from a claim no matter how long after the event the claim was made. For example, if a software company was sued for a security problem in one of its programs that led to a customer suffering a data breach 5 years after the product was released, the software company would be covered by the occurrence policy in place at the time of the breach.

 

Trust Us to Protect Your Intangibles

Here at Texas Associates Insurors, we know insurance can be complicated and confusing. Contact us today. We can help you navigate the complex cyber liability insurance world and discuss the coverages you need to protect your business from cyber risks.

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Grand Kids and ATV’s

Spring is almost here and that means it’s “back to normal” for our Texas outdoor activities. We received a question from an insured that served as a reminder: our fun times can be risky times!

The question was: Am I liable if my grandkids and their friends are injured while riding our ATV’s (All-Terrain Vehicles) on our property?

The answer: You can be. It’s important to carry on-premises and off-premises liability if an accident occurs using your ATVs. Not all insurance carriers will respond the same in every circumstance, so it’s important that you check with your advisor to make sure your exposure in this area is covered under your insurance policies.

Also, some safety guidelines to consider while using your ATV’s:

  • Attend ATV instruction courses to learn more about operating your vehicle.
  • Read the owner’s manual carefully before attempting to ride, and assure that all riders understand how to remain safe.
  • Never allow others to ride on an ATV with you.
  • Do not carry attachments or loads unless you are trained on how to effectively drive the vehicle while carrying cargo.
  • Never operate an ATV while under the influence of drugs and/or alcohol.
  • Do not ride on a public road or at night when motorists cannot see you as well.
  • Wear a helmet that is designed specifically for riding an ATV. Helmets designed for cycling, skateboarding or rollerblading will not provide the necessary protection from falls because they cannot absorb enough energy upon impact when you hit the ground. A proper helmet should also resist blows from sharp objects, stay in place as you ride and should provide minimal peripheral vision. Also wear the appropriate eye protection if your helmet does not have a face shield.
  • Wear gloves to improve your grip on the controls and reduce the pressure from holding onto the handle bars.
  • Wear boots to protect your feet and legs from debris and to maintain your footing. This will also help maintain your balance and control.
  • Wear long-sleeved shirts and long pants to protect your skin from cuts and scrapes.
  • Scan ahead of you to identify hazards such as rocks, fallen branches, fences, wires and unstable surfaces.
  • Be on guard for unexpected hazards such as wildlife and other riders.
  • Drive at a moderate speed while taking weather conditions and the terrain into account.
  • Shift your weight when making turns and riding up and down hills.

We want you to be safe on and off the road. Contact us today to learn about all the ways we help you to protect what matters most.

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