Business insurance policies might contain audit provisions to allow a final premium to be determined after the policy period ends. Audits are most common in Workers Comp policies because the premium is based primarily on payroll and job classifications. Often, a business can't predict exactly what its payroll will be for the coming year. It might hire more people, give raises, or change job classifications. A clerical worker might become a truck driver or vice versa. Either way, when job classifications change, Workers Comp costs are likely to change, too.

No business owner wants an unexpected call for more money from an insurance company. The more accurately you estimate your company's activities, the more likely that your final premium will meet your expectations. Then your audit premium adjustment could be small. Insurance companies' auditors seek premiums based on set rates and on what has occurred during the policy period. The policy establishes the auditor's right to examine all of a business' records related to the policy. It also requires the audit to be conducted within a set time. In the Workers Comp policy, the audit period is generally for three years after the policy period ends.

Don't just notify your accountant when your business picture changes. Let us know, too. Audited insurance policies are important for generating proper premiums. Understanding them can help prevent unfortunate surprises.

The difference between accidents covered and not covered by Workers Comp is sometimes unclear. For example in 1993, the legislature in one state modified the definition of a "compensable injury" to exclude Workers Comp coverage when no employment services are being performed. This would seem to exclude injuries that occur on breaks, at lunch, and during other activities.

An interesting example is a case in which a worker went to the trucking company yard on his day off to prepare a truck for the next day. He moved some personal items, and installed the spring-loaded bars that the employer required. While installing the antenna for his own CB, he fell off the truck and injured his back. The employer didn't require a CB, but it certainly would've been valuable on the road.

The Workers Comp commission decided that the injury didn't occur while performing an employment service. The Court of Appeals disagreed and granted the employee Workers Comp benefits. Court cases in various states will clarify the distinction between injuries that are work-related and those that aren't. Unfortunately there's no simple decision-making test.

Employers should be very careful about using lie detectors. Municipal, state, and federal laws severely restrict their use, and some states prohibit employers from using polygraph tests altogether.

The Employee Polygraph Protection Act of 1998 (EPPA) prohibits most private employers involved with interstate commerce from using lie-detector tests during the course of pre-employment screening and employment. Neither can they ask a job candidate about previous tests or retaliate against an employee who refuses to be tested. EPPA violations can subject employers to lawsuits, plus fines levied by the U.S. Department of Labor.

Exceptions to EPPA guidelines include government employees, persons in pharmaceutical jobs, prospective employees of security-service firms, and government contractors involved in national security. An employer is also permitted to give a lie-detector test to those reasonably suspected of involvement in acts such as theft or embezzlement, but serious restrictions apply.

Post EPPA provisions in a conspicuous place and get legal advice before using a polygraph.

When Al heard about a large award against another business for a customer's slip-and-fall injury, he worried about his own Liability limits. Before Al raises the limits of his Commercial General Liability policy (CGL), he should consider other ways of increasing his Liability coverage.

An Umbrella Liability policy would add to the protection of Al's CGL, Business Auto Policy (BAP), and other Liability policies. Plus it would include at least one more coverage area. Umbrella policies generally offer $1 million of protection, but they can provide millions of dollars of coverage.

An Excess Liability policy can also augment protection. Al might purchase one just to increase the amount available for claims over his CGL. Liability coverages to look at include CGL, BAP, Employer Practices, Fire Legal, Watercraft, and other less common risks. Excess Liability and Umbrella policies are relatively inexpensive because they only take effect with unusually high claims. Let's talk about your protection.

It's always hectic when major changes occur in a business. But don't forget that adding vehicles, relocating, joining a joint venture, and other activities can call for adjusting your coverage.

In fact, insurance policies require the insured to report property and organizational changes, and failure to do so could affect coverage.

Take the time to call and inform us about any changes in your business. We'll be glad to handle the details.

Calling for take-out? Customers don't care that the young delivery person ringing the doorbell is probably driving their own car or one titled to their parents. They just want to eat, now! But if you're the owner of the pizzeria, watch out!

A Personal Auto policy isn't designed to handle the risks of speedy delivery runs. It might cover a worker in their own car, but it won't protect the employer from lawsuits arising from an accident. And making a delivery person an independent contractor won't solve the problem.

Companies that employ drivers face special insurance needs: Commercial Auto insurance is the answer. The Business Auto Policy can provide coverage for both employee-owned and business-owned vehicles.

It's important for employers to know the driving record of a prospective worker, because it will affect their premium. Moving violations, accidents, and alcohol-related situations should be red flags. Screening drivers can go a long way toward preventing accidents and keeping premiums under control. If any of your employees drive while carrying out their duties, make sure your business is properly covered. We can help.

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