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Businesses Suffer as Employee Theft Grows
Organizations around the world lose an estimated 5% of their annual revenues to occupational fraud, according to a survey by the Association of Certified Fraud Examiners (ACFE).
The association estimates that U.S. businesses lose some $50 billion a year to employee theft, and that 75% of employees have stolen at least once from their employer — and 37% have stolen at least twice. It also estimates that about 33% of business bankruptcies are in part due to employee theft.
So, what can your organization do to avoid falling victim? The U.S. Small Business Administration and the ACFE recommend that companies:
Use pre-employment background checks — Making the right hiring decision can greatly reduce the risk of future heartache.
Basic pre-employment background checks are a good business practice, especially for employees who will be handling cash, high-value merchandise, or having access to sensitive customer or financial data.
But be aware that laws on background checks vary from state to state and if you go too far in your check, you may be in breach of the law and risk being sued. Recently the U.S. Equal Employment Opportunity Commission raised concerns that criminal background checks may disproportionately discriminate against some racial groups.
Check candidate references — It’s surprising how few employers check candidates’ references. Make a practice of calling all references, particularly if they are former employers or supervisors.
If your candidate has a history of fraudulent behavior, then you’ll want to know about it before you hand them a job offer.
While some former employers may be loath to tell you anything bad, they will often give you cues in the conversation that the employee may have had some problems.
Implement a fraud hotline — Occupational fraud is far more likely to be detected by a tip than by any other method.
More than 40% of all cases were detected by a tip — with the majority of them coming from employees of the victim organization. There are several providers of hotline services that can help implement an anonymous tip-reporting system for businesses of all sizes and industries.
Conduct regular audits — Regular audits can help you detect theft and fraud and can be a significant deterrent to fraud or criminal activity, because many perpetrators of workplace fraud seize opportunity where weak internal controls exist.
You should identify high-risk areas for your business and audit for violations on a six- to 12-month basis. Items to look at include business expense reports, cash and sales reconciliation, vacation and sick day reports, and violations of e-mail/social media or Web-use policies.
Recognize the signs — Studies show that perpetrators of workplace crime or fraud do so because they are either under pressure, feel underappreciated or perceive that management behavior is unethical or unfair.
They rationalize their behavior based on the fact that they feel they are owed something or deserve it.
Some of the potential red flags to look out for include:
- Not taking vacations. Many violations are discovered while the perpetrator is on vacation.
- Being overly protective or exclusive about their workspace.
- Employees that prefer to be unsupervised by working after hours or taking work home.
- Financial records sometimes disappearing.
- Unexplained debt.
- An employee living beyond their means.
Set the right management tone — One of the best techniques for preventing and combating employee theft or fraud is to create and communicate a business climate that shows that you take it seriously. You may want to consider:
- Reconciling statements on a regular basis to check for fraudulent activity.
- Holding regular one-on-one review meetings with employees.
- Offering to assist workers who are experiencing stress or difficult times.
- Having an open-door policy that gives employees the opportunity to speak freely and share their concerns about potential violations.
- Creating strong internal controls.
- Requiring employees to take vacations.
You should also treat unusual transactions with suspicion and trust your instincts.
Secure employee theft insurance
Employee dishonesty insurance coverage — sometimes referred to as fidelity bond, crime coverage or crime fidelity insurance — protects a small business employer from a financial loss as a result of fraudulent acts by employees.
The financial loss can be caused by an employee’s theft of property, money or securities owned by the small business.
Cal/OSHA Proposed Workplace Violence Prevention Rules Muddy the Waters
Cal/OSHA has proposed new regulations that would incorporate California’s new workplace violence prevention law — which took effect July 1 — into Title 8, the set of regulations that covers workplace safety in the Golden State.
However, the proposed rules add a number of new requirements that some safety observers say would be unworkable in many workplaces and may create burdensome new standards for employers to follow.
Under the law passed last year, SB 553, virtually all California employers are required to establish, implement and maintain an effective workplace violence prevention plan and effective procedures to respond to “actual or potential” workplace violence emergencies.
The proposed additional requirements surpass those set out in state Labor Code as a result of SB 553. Here’s a look at some of the most significant changes.
Workplace controls
The proposed regulations list a number of acceptable procedures and rules that can be used to effectively reduce workplace violence hazards, including:
- Appropriate staffing levels,
- Hiring dedicated security personnel,
- Effective means to alert employees of the presence, location and nature of a security threat,
- Control of visitor entry, and
- Methods and procedures to prevent unauthorized firearms and weapons in the workplace.
Engineering controls
The proposal adds a number of suggestions for engineering controls that can help prevent violence in the workplace. These include:
- Electronic or mechanical access controls to employee-occupied areas,
- Weapon detectors (installed or handheld),
- Enclosed workstations with shatter-resistant glass,
- Deep service counters,
- Spaces configured to optimize employee access to exits, escape routes and alarms,
- Separate rooms or areas for high-risk persons,
- Locks on doors,
- Affixing furniture to the floor,
- Opaque glass windows (which can protect privacy, but allow employees to see where potential risks are),
- Improving lighting in dark areas, sight-aids, enhancing visibility and removing sight barriers,
- Video monitoring and recording, and
- Personal and workplace alarms.
The proposed rules also list situations or locations that have a higher risk of workplace violence. These include:
- Employees working alone or in locations isolated from other employees,
- Areas with poor illumination or blocked visibility (such as blind spots),
- Entries to places of employment where unauthorized access can occur,
- Work locations that lack effective escape routes,
- The presence of money or valuable items such as jewelry or luxury goods,
- Frequent or regular contact with the public,
- Working late at night or early morning, and
- Selling, distributing or providing alcohol, marijuana or pharmaceutical drugs.
The draft language would bar employers from requiring or encouraging employees to confront individuals suspected of theft or of engaging in violence in the workplace, except for dedicated security staff.
Finally, the proposed regulations outline steps employers can take when responding to and then investigating a case of workplace violence, post-incident:
- Provide immediate medical care or first aid to workers who have been injured in the incident,
- Identify employees involved in the incident,
- For employers with more than 25 employees, make available individual trauma counseling to those staff affected by the incident,
- Conduct a post-incident debriefing as soon as possible after the incident with employees, supervisors and security involved in the incident,
- Identify and evaluate workplace violence hazards that may have contributed to the incident,
- Identify and evaluate whether appropriate corrective measures developed under the firm’s workplace violence prevention plan were effectively implemented, and if any new or additional corrective measures should be made, and
- Solicit from employees involved in the incident their opinions regarding the cause of the incident, and whether any measures would have prevented it.
The takeaway
The proposed rules are just the first step. They still have to go through a public comment period and the Division of Occupational Safety and Health, which writes new regulations.
However, the rules have already received plenty of pushback from employers.
Karen Tynan, an attorney specializing in workplace safety and health for the Ogletree Deakins law firm, told the Cal-OSHA Reporter that there are potential pitfalls in the added provisions. The examples of engineering and work practice controls “may be helpful to employers, but certainly we don’t want to see inspectors demanding these examples in every workplace,” she said.
She also criticized the post-incident response procedures as “overbroad and overly burdensome. The demand for a post-incident investigation report will be incredibly difficult for even mid-sized employers or employers who do not regularly face workplace violence hazards.”
What Business Insurance Policies Cover Rioting, Looting
Protests and mass demonstrations that can sometimes descend into rioting and civil unrest are becoming more common not just in the U.S., but all over the world. Businesses can sometimes unwittingly become collateral damage from vandalism and looting.
It doesn’t have to be a retail establishment; office buildings and other commercial properties can also face looting and damage during civil unrest. For business owners whose properties are damaged or destroyed, the ordeal can be both unsettling and stressful as they wrestle with the specifics of filing insurance claims.
Fortunately, you don’t need special insurance policies to cover these events. Your basic commercial property policy and commercial auto (if you have business vehicles that are damaged) will usually suffice.
Here’s a look at what your policies may cover and how to prepare for filing a claim if your business is damaged during rioting or civil unrest.
Property damage
Standard commercial property policies cover damage to a business property caused by fire, explosion, riot or civil commotion, vandalism or malicious mischief. This would include coverage to the structure, as well as any inventory, fixtures and other contents. Business owner’s policies also include this risk.
Damage payouts would be subject to sublimits (specific or blanket) for inventory, fixtures and other items, as well as the policy deductible.
Commercial vehicle damage
For business-owned vehicles to be covered for damage for these types of events, you’ll want to ensure that you have purchased comprehensive coverage, which is an optional, but highly recommended part of your policy.
Comprehensive coverage may cover a vehicle if it is:
- Stolen,
- Damaged, or
- Destroyed.
One of the most common damages to vehicles during riots is broken windshields, which you can usually get covered with an optional glass coverage rider.
Business interruption coverage
Companies that are forced to close as a result of rioting and looting damage may have coverage for business interruption under a business property policy.
Business interruption insurance may cover lost income if a company is unable to operate after its premises were damaged during a riot or social unrest. Coverage may also apply if a business suffers a loss of income because of curfews or if authorities bar access to a property.
Coverage is typically triggered if there is direct physical damage to the premises.
Filing a claim
When filing a claim, read your policy or give us a call to determine how to best present it. It’s important to understand the policy’s limits and deductibles before spending time documenting losses that may not be covered.
If you are going to file a claim, document all damage. Keep receipts for all your inventory and fixtures.
In the event of a claim:
- Take photos of all damage.
- Contact your agent and file a claim immediately.
- Clean up to protect your building, but do not make major repairs until you talk to the insurance company.
- Keep receipts for any remediation work.
If you’re going to file a business interruption insurance claim, you will need:
- Pre-riot financial statements and income tax returns.
- Post-riot business records.
- Copies of current utility bills, employee wage and benefit statements, and other records showing continuing operating expenses.
- Receipts for building materials, a portable generator and other supplies needed for immediate repairs or remediation.
- Paid invoices from contractors, security personnel, media outlets and other service providers.
- Receipts for rental payments, if you move your business to a temporary location.
Note: Many policies require a 72-hour waiting period before a policyholder can begin making a business interruption claim. That’s because the first three days of business shutdown, access constraints or limited hours of operation because of a civil authority action, are often excluded from coverage.
There may also be a limit to the claim period. A standard limit is up to three weeks of losses.
More Businesses Sued Over Disabled Website Access
Businesses with a web presence, particularly those that are consumer-facing, are increasingly being sued over website accessibility issues that prevent disabled individuals from using a website.
While the number of such cases has been growing, 2,281 website accessibility lawsuits were filed in 2023, down from 2,387 the prior year and 2,352 in 2021, according to a report by Accessibility.com, a firm that helps businesses make their websites useable for certain disabled individuals.
The drop in cases actually filed is due to more organizations settling with law firms without going to court, in light of the fact that there was an 18% year-on-year increase in demand notices in 2023, the report concludes.
For businesses with customer-facing websites, this is a new risk that must be taken seriously as people can access the websites from anywhere in the country. Just because a business is located in say, Kentucky, a person in New York may sue in their local jurisdiction over website access issues.
Even if a business succeeds in fighting one of these cases, the litigation costs can be substantial.
What is website accessibility?
Website accessibility refers to the extent to which a site can be used by individuals with disabilities. This can include people who are blind or have low vision, those who are deaf or hard of hearing, and people with mobility impairments, cognitive disabilities or other disabilities.
It involves designing your website so that its content is available to and functional for everyone, including those who might use assistive technologies like screen readers, voice recognition software, or specialized input devices.
What’s happening?
The Americans with Disabilities Act allows individuals with disabilities to bring lawsuits against businesses directly. A plaintiff can seek injunctive relief, such as asking for a court order requiring the website to be changed as well as attorneys’ fees or costs. However, the ADA does not permit the recovery of monetary damages in these cases.
That said, many states, including New York and California, have enacted state laws allowing individuals to recover monetary damages for disability discrimination. Courts in both states have ruled that websites are places of public accommodation akin to establishments with physical locations, and, thus, are subject to the ADA.
As a result, more than 85% of website accessibility lawsuits are filed in those two states, according to the Accessibility.com report.
There are indications that filing these types of lawsuits has become a moneymaker for a few law firms and individuals. The report found that:
- New York had nearly 73% of all the cases filed nationwide, followed by California and Illinois.
- Over 69% of all website accessibility lawsuits were filed by five law firms out of New York and California.
- Almost 16% of website accessibility lawsuits in 2023 were filed by five plaintiffs. One of them filed more than 105 lawsuits that year after filing 108 in 2022. The report found that four other individuals filed between 52 and 78 cases apiece in 2023.
What should businesses do?
Most of these lawsuits cite the “Web Content Accessibility Guidelines,” published by the World Wide Web Consortium. While these guidelines are advisory only, they have become the standard to follow when making websites accessible to individuals with disabilities.
Courts have accepted these guidelines as the applicable standard for ADA website accessibility compliance. Many of these cases are settled with the condition that the website become compliant with WCAG, which is focused on making websites perceivable, operable, understandable and robust.
There are widgets that can be installed on websites to ensure they comply with the WCAG, but even so, 933 lawsuits filed in 2023 were against businesses that had installed such widgets on their websites.
Experts recommend:
- Regularly checking your website and digital content to ensure it is accessible to individuals with disabilities.
- Ensuring that your website complies with the latest WCAG guidelines and includes a general statement regarding accessibility and a clear indication of how to contact your company if an issue with accessibility arises.
- If necessary, hire an outside vendor that can bring your website into compliance with the WCAG guidelines.
- If you receive an ADA demand letter or complaint, you should consult with attorneys who are experienced in these types of cases.
EEOC, OSHA Retaliation Claims Surge
Over the past several years, employers have seen a significant uptick in retaliation and whistleblower claims filed by employees and investigated by federal agencies.
Often these claims are part of another complaint, either concerning workplace discrimination or harassment issues and filed with the Equal Employment Opportunity Commission, or concerning workplace safety issues, which are filed with Fed-OSHA.
In 2023, the EEOC saw a record number of retaliation complaints — 46,047, up 20% from 2022. During that same period the number of cases that were resolved jumped 28% to 43,685 from 34,180.
Monetary benefit awards and settlements leapt nearly 30% to $283 million in 2023, from $220 million in 2022.
Importantly, the number of complaints filed with the EEOC that include retaliation increased to 50% of the total in 2022, from 30% in 2010.
At OSHA, the number of whistleblower complaints filed with the agency increased significantly in 2023, with the vast majority of those complaints — about seven in 10 — filed under the OSHA Act section on “retaliation based on protected safety acts,” like harassment or discrimination.
OSHA has put an emphasis on protecting workers who suffer retaliatory treatment after bringing up workplace safety issues with management. The number of retaliation case determinations by OSHA soared nearly 30% between fiscal year 2023 and FY2022.
What is retaliation?
Retaliation means any adverse action that management or supervisors take against an employee because they complained about harassment or discrimination or workplace safety issues. Any negative action that would deter a reasonable worker in the same situation from making a complaint also qualifies as retaliation.
Employees who participate in an investigation of any of these problems are also protected. For example, you cannot punish a worker for giving a statement to a government agency that is looking into a discrimination claim.
Employment law experts recommend that employers do the following:
Set clear and unambiguous policies
- Your company policy should clearly state that retaliation is not permitted.
- The policy should describe the parameters of inappropriate conduct as well as you can define them.
- Put the policy in writing.
- Set reporting and grievance procedures, including the person to whom the employee can report a retaliation complaint.
- Have staff sign an acknowledgment of receipt of your policy.
Investigate complaints promptly
- All complaints should be taken seriously and investigated without delay.
- Anyone who participates in an investigation is protected from retaliation (not just the employee who makes a complaint, but witnesses as well).
- Take effective remedial measures, including carefully reviewing all disciplinary measures before imposing them. You should also ensure that disciplinary actions are consistent with past practices.
Train managers and supervisors
Train managers and supervisors and ensure they understand your policies.
Make sure they understand who is protected from retaliation (participants, complainants — and even persons related to the complainant in some cases).
They should also understand what constitutes retaliatory conduct and, if they are unsure, they should speak to your human resources manager.
Further protection
Besides instituting policies and training managers and supervisors about avoiding retaliatory actions, it is important to have proper insurance coverage in place: employment practices liability insurance.
This insurance may cover the cost of employee-initiated lawsuits like discrimination, harassment and retaliation complaints, but it will not cover illegal acts. Covered costs include legal fees, as well as any settlements or judgments rendered against your business.
Cal/OSHA Proposed Rules Would Impose Large Penalties for ‘Egregious,’ ‘Enterprise-Wide’ Violations
Cal/OSHA is working on new rules that would crack down and step up enforcement and penalties against California employers that commit “egregious” and “enterprise-wide” workplace safety violations.
The forthcoming rules would impose substantial penalties on companies that have shown a disregard towards California workplace safety regulations and the wellbeing of their employees. Employers that are cited for egregious violations could be fined up to $158,000 “per instance,” meaning it can be applied for each employee exposed to the violation. And there’s more.
Employers that are cited for egregious violations could be fined up to $158,000 “per instance,” meaning it can be applied for each employee exposed to the violation.
As well, businesses with multiple locations will have to be especially mindful of complying with Cal/OSHA regulations to ensure they are not snared for the same violations at two or more locations.
The new rules implement a 2021 law, SB 606, and will bring Cal/OSHA’s rules in line with Fed-OSHA’s as federal law requires that state-run OSHA enforcement programs to be “at least as effective” as the federal program.
Here’s what’s on tap:
Enterprise-wide violation
Under the proposed rules, a violation is enterprise-wide if an employer has multiple worksites and either of the following is true:
- The employer has a written policy or procedure that violates occupational safety and health regulations; or
- The Division of Occupational Safety and Health has evidence of a pattern or practice of the same violation or violations involving more than one of the employer’s worksites.
The proposed penalty for enterprise-wide violations is multiplied by the number of worksites covered at inspection, up to a maximum of $158,727 per exposed worker, and will be adjusted each year for inflation.
If an employer fails to abate violations noted by a Cal/OSHA inspector at any worksite covered by the citation in a timely manner, a separate “failure to abate” penalty of up to $15,000 may be assessed for each instance.
Egregious violation
The proposed rules define an egregious violation as a willful violation where the employer has had a previous egregious violation in the past five years. One or more of the following apply:
- The employer, intentionally, through conscious, voluntary action or inaction, made no reasonable effort to eliminate the known violation.
- The employer has a history of one or more serious, repeat or willful violations or more than 20 general or regulatory violations per 100 employees.
- The employer intentionally disregarded its health and safety responsibilities, such as by failing to maintain an effective Injury and Illness Program, ignoring safety and health hazards, or refusing to comply with the Cal/OSHA Act.
- The employer’s conduct, taken as a whole, amounts to clear bad faith in the performance of their duties to comply with occupational safety and health standards.
- Within the five years preceding a citation for an egregious violation, the employer has committed more than five violations of any Title 8 standard that has become finalized.
- The violations resulted in worker fatalities, a worksite catastrophe, or five or more injuries or illnesses. Catastrophe is defined as inpatient hospitalization of three or more workers from a workplace hazard.
- Within the 12 months immediately preceding the underlying violation, 10% of all employees at the cited worksite sustained workplace injuries or illnesses.
According to the Cal-OSHA Reporter newsletter, it’s expected that the proposed maximum penalty for egregious violations will be $158,727, adjusted each year according to the consumer price index. Importantly, each employee that is exposed to an egregious violation would be considered a separate violation. Since the penalty can be assessed on a per-instance basis, it could quickly spiral for some employers.
The takeaway
The proposed regulations pose the largest risk for companies with multiple locations.
Employers should double down on their workplace safety efforts and ensure that there is buy-in to the program from top management down to supervisors and line workers at all locations.
Cal/OSHA’s Indoor Heat Illness Regulations Take Effect
Cal/OSHA’s indoor heat illness prevention regulations took effect July 24, requiring employers to implement safety measures when indoor workplace temperatures reach or exceed 82 degrees Fahrenheit.
The new rules apply to most indoor workplaces, such as restaurants, warehouses and manufacturing facilities, and require employers to provide water, rest, cool-down areas and training when temperatures exceed the threshold.
The standard requires employers who have indoor worksites with higher temperatures to take immediate steps to ensure they are in compliance with the new rules.
Under the standard, most requirements for additional protections start at the 82-degree trigger, but additional ones kick in at 87 degrees. At that point, businesses would be required to take additional steps, when feasible, including cooling down the work areas, implementing work-rest schedules and providing personal heat-protective equipment.
Where workers wear clothing that restricts heat removal or work in high-radiant-heat areas, the additional requirements apply at 82 degrees.
Employers whose indoor workplaces may exceed the 82-degree threshold will need to create, maintain and make available to employees a heat illness prevention plan (HIPP), which all affected employees should be trained in and read. The plan covers all of the below.
When temperatures in an indoor workplace reach 82 degrees, employers must provide:
Access to water — You must provide access to potable water that is fresh, suitably cool and free of charge. The water shall be located as close as possible to work areas and cool-down areas.
Access to a cool-down area — You must provide access to at least one cool-down area, where the temperature must be kept at below 82 degrees.
The cool-down area should be blocked from direct sunlight, be shielded from other high-radiant heat sources and be large enough to accommodate the number of workers on rest breaks so they can sit comfortably without touching each other. The area should be as close as possible to work areas.
Cool-down rest periods — You should encourage workers to take preventive cool-down rest breaks and allow those who ask for a cool-down rest break to take one. Workers should be monitored for symptoms of heat-related illness when they are taking such cool-down rests.
Also, the standard requires employers to:
- Provide first aid or emergency response to any workers showing heat illness signs or symptoms, including contacting emergency medical services.
- Closely observe new workers and newly assigned employees working in hot areas during a 14-day acclimatization period, as well as all employees working during a heatwave.
- Provide training to both workers and supervisors in the HIPP and prevention measures.
The takeaway
The solutions for many businesses will be installing air conditioning that ensures that temperatures never exceed the 82-degree threshold in an indoor workspace. While costly, it can reduce the need for employers to take any additional steps to protect employees against heat illness.
However, while this may be a good option in smaller locations, it may not be feasible in larger facilities like warehouses and production operations due to costs and difficulty in cooling a large area.
How Landlords Can Avoid Mold Liability Lawsuits
Mold is a serious problem in a number of older homes, apartment buildings and commercial buildings.
It’s often caused by poor maintenance and unchecked water leaks that over time create conditions that are ripe for the growth of the fungus.
The problem is that this mold can aggravate tenants’ allergies, and there are plenty of cases where they sue landlords over being sickened by mold. And juries round the country have awarded large settlements (sometimes in the millions of dollars) to tenants after they claimed they were sickened by mold in their homes, apartments or offices.
Worse, it’s difficult to make a claim on your landlord’s policy if you are sued by a tenant over mold issues, as many of the policies exclude pollution.
Fortunately, there are steps a landlord can take to reduce the chances of being sued by a tenant for mold issues.
While most states do not have mold-specific laws, they do have negligence laws. And most often, mold growth is the direct result of poor maintenance or just pure negligence as some landlords may detect a leak and not bother fixing it. Leaking water and moist conditions are the breeding ground for mold.
In order for a landlord to be considered negligent in a premises liability lawsuit, they must be aware that the problem exists or should have been aware that the problem existed.
When the issue is toxic mold exposure, it’s easy for a landlord to be held liable for having allowed a toxic environment to fester.
Steps you can take to avoid being sued
You can take steps to reduce the chances of being sued by a tenant. It may take some extra time and upfront expense, but it will be worth it if you can avoid being targeted with litigation.
Require tenants to immediately notify you about water damage, broken dehumidifiers, condensation or related problems — In your lease you should require that your tenants notify you about a leak or other water issue that they become aware of. This will allow you to remediate the problem once they call and also provide you with a strong defense if they later try to sue, claiming you are liable for damages.
Some sample language that you can include in the lease could include advising tenants to keep their dwellings clean, remove visible moisture on windows, walls, ceilings, floors and other surfaces as soon as possible, and notify landlords — in writing — about any signs of water leaks, water infiltration or mold.
Require tenants to carry renter’s insurance — Your insurance will cover the structure itself, but renter’s insurance will cover any mold damage to your tenants’ property and belongings.
Stay to a strict maintenance schedule — You should schedule times with your tenants so you can regularly inspect for leaks in pipes, windows and roofs, as well as water staining, and moisture and condensation (including in the HVAC system). Leaks are usually where mold starts.
During inspections, besides looking for those obvious issues, you should look out for mildewy, musty odors, and look for mold and fungus. If you find any issues, remediate them promptly.
Respond quickly when a tenant complains — Proactive landlords that fix problems their tenants raise, have a much less chance of being sued. Therefore, if one of your tenants reports a mold or moisture problem, you should immediately have the property inspected by a professional.
If they detect any mold, mildew and/or leaks that may be causing it, you should hire professionals to remove the mold and repair any problems that were causing the growth in the first place.
Make sure to document any inspections you conduct, as well as any repairs, cleanup and remediation.
Finally, you should make sure to follow up with your tenants to make sure the problem hasn’t recurred. A good idea is to check with them a week later, a month later and then six months later. But before that six-month mark, you may want to have the property reinspected for mold.
Insurance
The typical landlord’s insurance policy covers:
Property damage — From fire or other natural catastrophe.
Lost rental income/rental default — Should something cause your property to be uninhabitable (severe mold, termites, a rat infestation or a sinkhole), this provides temporary rental reimbursement to cover the income you’d otherwise receive if tenants could be occupying the property. It also covers lost income from a tenant’s rental default.
Liability — This is coverage for the medical or legal costs that might ensue if the tenant or a visitor suffers injury due to a property maintenance issue.
Commissioner Orders Benchmark Workers’ Comp Rate Reduction
California Insurance Commissioner Ricardo Lara has ordered that the state’s average benchmark workers’ compensation rate be cut by 2.1%, starting Sept. 1.
The decision rejected the Workers’ Compensation Insurance Rating Bureau’s recommendation that the benchmark rate be raised by 0.9%, citing a slight uptick in claims costs and claims-adjusting costs.
The benchmark rate, also known as the pure premium rate, is a base rate that insurers can use to price their policies. It only includes only the cost of claims and claims-adjusting costs and does not take into account other forms of overhead and profits.
Each class code gets its own pure premium rate, and some classes may see increases and others further decreases. Every employer’s premiums will differ depending on their claims experience, industry and location.
Also, insurers are not required to use the pure premium rate and are free to price their policies as they see fit.
The decision is a further reflection of the low pricing environment for workers’ compensation, a rare bright spot in an insurance market that has seen hefty rate increases in other lines, such as commercial property and liability coverage.
The average benchmark rate will fall to $1.38 per $100 of payroll, down from the current $1.41.
Reasons behind Lara’s decision
Factors that the commissioner cited as influencing his decision include:
- The continuing decrease in the number of medical services associated with each workers’ comp claim, and
- A continuing decline in the percentage of claims with permanent disability benefits.
The new rate applies to policies incepting on or after Sept.1, 2024.
If you have questions about your coverage, please give your agent a call.
Electric Tools Pose Dangers, Train Staff in Proper Usage
Each year, hundreds of construction workers suffer shock when handling electrical tools and equipment.
One of the big problems in understanding the dangers of electrical shock is the mistaken belief that only high voltages kill. It’s not the voltage that’s lethal, but the amount of current that passes through the body. The condition and placement of the body has a lot to do with the chance of getting a shock.
It’s important that employers train their workers about the basic facts regarding the causes of electrical shock when using these tools.
Water and electricity
Damp areas and metal objects can offer good shortcuts for electricity to reach the ground. If a worker’s hands are sweaty, if socks and shoes are moist or damp, if the floor is wet or they are standing in a puddle of water, the moisture may allow more current to pass through the body.
If work is to be done with metal objects or in damp areas, workers should recognize the hazards and take necessary precautions. These include:
- Rubber gloves and boots,
- Rubber mats,
- Insulated tools, and
- Rubber sheets that can be used to cover exposed metal.
Also, during times of rain, extra caution should be taken when working with electrical equipment or working near grounded objects.
Other precautions
It’s not just the presence of water that can cause a worker to be electrocuted. Electricity is always a danger, and workers should take all precautions necessary to avoid injury or death.
It’s important that you teach them the following:
- Treat every electric wire as if it were a live one.
- Inspect equipment and extension cords before each use.
- Take faulty equipment or plugs with bent or missing prongs out of service for repair.
- Only qualified electricians should repair electrical equipment or work on energized lines.
- If a plug doesn’t have three prongs or if the receptacle doesn’t have three openings, make sure the tool is grounded in some other way before use.
- Never try to bypass an electrical system by cutting off the third prong of a plug.
- Turn off the power and report the smell of hot or burning plastic, smoke or sparks, or the presence of flickering lights.
- Stop using a tool or appliance if a slight shock or tingling is felt.
- Never disconnect an electrical plug by pulling on the cord.
- Whenever working on an electric circuit, the circuit should be turned off and locked out at the circuit breaker or fuse box to ensure that it cannot be accidentally turned on.
- Those who regularly work on or around energized electrical equipment should be trained in emergency response and CPR.
The takeaway
The use of electrical tools requires additional precautions on the part of your workers. It’s important that you train them in proper usage and how to spot potential dangers of electrocution.