Tag Archives: Randy Reynolds

5 Common Mistakes in Implementing Risk Management

We learn more when we make a mistake than when we get something right. For this reason, we can learn just as much about a topic by reading about mistakes as we can from hearing success stories. So with this in mind, in the hopes of learning a little more about risk management, let’s look at 5 common mistakes made in implementing risk management.

No Overall Risk Management Strategy 

Micro-managing your risks may work in the short-term, but with no overall strategy, your risk management is lacking direction. This direction helps keep your risk management on track and sets a precedent for how future risks are dealt with.

Short Term Risk Management Review

It’s very common for businesses to get caught up in the identifying, evaluating and strategizing of risk management that they run out of steam and forget the assessment element of the process. Once a strategy has been in practice for a period of time, this is the right time to really assess just how effective it is. Neglect this step, and small issues can quickly become major problems.

Skipping Departmental Input

Each department has a role to play in effectively identifying risks throughout the company. The importance of input from throughout the company cannot be stressed enough. They possess unique insights into the operations of each aspect of business. Without their input, crucial risks can go unmanaged.

Fear of Failure

We design our risk management strategies in the hope we won’t have to deal with failure, however we can’t count it out. Failure is always an option, because as we know we stand to learn a lot from our mistakes. Being too afraid of failing means we don’t take risks and don’t try anything different.

Imbalance of Proactive and Preventative Risk Management

Risk management comes in many forms from proactive measures such as training and preventative measures like purchasing insurance. A common mistake would be to rely too much on one over the other. Finding a balance means risks are minimized through thorough employee training and the potential consequences should this fail are also lessened with the right insurance in place.

Whether we make mistakes, or someone else does – this can provide us with a lot of guidance for the future. Have you ever made a mistake in your risk management, what did it teach you?

For more information on avoiding mistakes when implementing risk management you can ask an insurance expert

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Will Healthcare Reform Affect P&C Insurance Rates?

Many of the Affordable Care Act’s (ACA) major provisions take effect Jan. 1, 2014, and business owners across the country are curious about the effects that the health care changes will have on the Property & Casualty (P&C) market. Industry experts speculate that the ACA will have the greatest direct impact on medical malpractice liability insurance and workers’ compensation coverages—but whether the changes will result in higher or lower rates is still an ongoing debate.

In theory, as more people gain access to health care, the number of medical malpractice liability lawsuits could decrease because patients will be able to receive earlier treatment for medical problems, leading to better health outcomes. Similarly, as more workers have access to health care, workers’ compensation (WC) rates may also decrease.

Alternatively, some analysts express concerns that the influx of newly covered patients could exacerbate existing staffing shortages and stretch doctors and nurses too thin. This could result in a higher frequency of medical errors and potentially increase the amount of time workers must wait to receive treatment—ultimately leading to higher rates.

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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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Risk Management in Situations of Litigation

Litigation is an unfortunately common occurrence in business. When planning your risk management strategy regarding your liability in business, it is also important to look at other potential risks that may arise when your company is involved in legal proceedings.

Crisis Management

Having a crisis management strategy in place will go a long way to avoiding many risks if your business in involved in litigation.  Media and public relation policies will provide guidelines for your staff in dealing with potentially volatile situations. Avoiding cases of defamation or damage to the company’s reputation can be avoided if public relations are effectively managed.

Legal Fees

The potential cost of litigation can be crippling for a business. If you purchase Business Liability Insurance your policy can cover the fees you incur during the legal process. This can include your legal teams fee and any compensation you may be required to pay.

eDiscovery

With the popularity of electronic communication, greater legal importance has been put on e-mails in court cases. If called upon, a business must be in a position to produce records of electronic communication in a court case. This information must also be seen to be complete and in its original form.

Implementing an efficient eDiscovery system for your electronic communication archive will ensure your data is secure and can not be corrupted or tampered with. It is also important to consider the speed at which these files can be recovered. To delay a court case unnecessarily could run up costs or to fail to return with the correct documentation in time could be detrimental to the case.

Minimizing your potential risk when involved in litigation should be an important stage in your risk management strategy. Purchasing the right insurance and implementing guidelines could avoid potentially disastrous consequences.

If you need any business insurance advice, click here to ask an expert.

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