A Higher Purpose – Insurance as an Economic Engine

Most people view insurance as just that – a way to “make sure” they have protection against accident and injury.  While that is certainly an accurate and true description, insurance actually serves a larger purpose in supporting and driving the larger economy.

A study published by the Insurance Information Institute in June 2018 offers 10 major reasons why insurance is such an economic asset.  Here is that rundown:

  1. Financial first responders – Often arriving the same time as emergency officials, insurers make every effort to restore claimants and beneficiaries quickly and reliably. This lessens the costs of unexpected losses and benefits even among those not directly affected by a loss.
  2. Risk mitigators – Insurers sponsor and promote knowledge and activities that save lives and protect and preserve property.
  3. Capital protectors – Insurers are not as susceptible to short-term liquidity crunches as are other financial services firms. Reinsurers further stabilize insurer exposure to loss by spreading or diversifying transferred risk.
  4. Partners in social policy – By providing significant social benefits, such as compensation for injuries at work and rebuilding property after catastrophes, insurance contributes to the rebuilding of people’s livelihoods, as well as to the economy as a whole.
  5. Sustainers of the supply chain – Insurance protects economic interdependence among businesses by insuring vital supply chains.
  6. Capital infusers – Insurance reduces the need for “rainy day funds.” Consumers and businesses can buy insurance for a relatively small premium, thereby putting more working capital into the economy, producing and consuming more goods and services to create a higher standard of living.
  7. Community builders – Insurers are among the largest investors in the world, with more than $8 trillion in assets under management. Since these investments need to be available to pay long-term claims, investments often include private and municipal bonds that help communities grow and thrive.
  8. Infrastructure enablers – Insurance enables economy-boosting construction projects and events to take place.
  9. Innovation catalysts – Insurance allows innovators to take the risk that’s needed to spur modernization. For more than 300 years—including every industrial revolution—insurance has been a critical driving force, and thus is central to a developing economy.
  10. Credit facilitators – With insurance, lenders are more likely to provide funding for large purchases, consumer durables and to businesses, and charge lower interest rates for these loans.

We at the Reschini Group understand the vital role we play in spurring economic activity and growth in our region and among our clients.  It’s a role we take very seriously, and with great appreciation for the relationships we are privileged to maintain.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

 

Source: https://www.iii.org/sites/default/files/docs/pdf/insurance-driver-econ-growth-053018.pdf

Reprise: C’mon Back – Establishing a Quality Return-to-Work Program

By The Reschini Group

Create a robust Return-to-Work Program to help employees get back into the swing of activity at the worksite.

College Homecomings.  Family Reunions.  These events remain popular because they bring people back.  When you share an experience together, you want to be around those people again.  It’s always good to come on back.

While perhaps not as sentimental as Homecomings and reunions, the same principle nonetheless applies to the workplace.  When an employee gets hurt on the job and loses time recuperating, it’s important to bring that person back into the organization as soon as practically possible.  This holds true for many reasons.  A recent poll cited by Zywave Inc. found that:

  • 70% of employees who return quickly to the workplace avoid letting their condition consume their thinking.
  • 76% of quick returners refuse to feel victimized by their injury.
  • 90% of quick returners report having a good relationship with their supervisor.
  • The longer an employee is away from work, the less likely he or she will return to gainful employment.
  • Employees who are off work for more than 16 consecutive weeks rarely return to work at all.

A robust Return-to-Work Program provides organizations with a defined set of rules and practices designed to help employees get back into the swing of activity at the worksite.  A solidly defined, easily implemented Return-to-Work Program identifies ways of helping employees who have been hurt to come back in either a temporary role, or to their regular job, but with modifications as appropriate.

Zywave lists four main components in the development of a Return-to-Work Program:

  1. Identify a coordinator to oversee all aspects of the program.
  2. Develop a formal policy, approved by management and agreed to in writing by employees.
  3. Designate medical providers who understand your business and its physical demands on employees.*
  4. Be consistent in the administration and expectations of the program across all locations, and among all supervisors and employees.

A Return-to-Work Program helps to ensure that meaningful work activity is provided as quickly as possible to employees who may be temporarily unable to perform all or portions of their regular work duties.  Studies show that a well-constructed Return-to-Work Program reduces lost-time days, allows workers to recover more quickly, creates a more positive work environment, and can even help minimize the financial ramifications of lost-time events, such as increases in the Experience Modifier score, which can raise insurance premiums by as much as 25 percent in one year due to lost-time accidents.

Let the team at The Reschini Group help guide you regarding establishment of a Return-to-Work Program and its effect on insurance coverage options.  Coming back to work means coming back to a positive feeling of productivity, which ultimately helps everyone.

* Injured workers are required to be seen by a provider that is on the “Panel of Physicians” for the first 90 days after their initial visit.  Insured’s work with their carrier to provide a panel at the beginning of the policy period based on the carriers pricing structure with that provider, the doctors willingness to work with companies on things such as RTW, and other aspects that they feel important, (ability to see patients on short notice, location, etc).  After 90 days, the injured employee may see whomever they would like.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Separation Anxiety: Arranging Coverage for College Students

By The Reschini Group

Separation Anxiety

Well, Mom and Dad, after 17 years of protecting, guiding, and ensuring her safety, the Big Moment arrives – it’s time to say goodbye to your new college freshman and head back home.

What you may not have realized, though, is that much of that protecting, guiding, and ensuring of safety has been covered by your insurance.  Now that you’re little bird has flown the coop, so to speak, is it better to leave her ongoing protection to your existing policies, or secure policies specifically for her new life, environment, and potential hazards?

Kids in college may be learning things in classrooms and laboratories, but they’re not as smart as you about the larger considerations of life.  Not yet, anyway.  So the decision as to whether supplemental insurance is worth the cost falls to you as the parent.

  • There’s personal liability – college students can find themselves in some unusual situations, even some in which property may be damaged. What happens then?
  • Then there’s auto insurance – one student’s car may become a communal means of transportation, where any friend of that student with a driver’s license (or not) gets to climb behind the wheel. Who’s responsible should an accident occur?
  • As the student advances through college, dorm life gives way to apartment living – would renter’s insurance make sense in this case?

Be sure about your coverage.  The professionals at The Reschini Group are well versed in these questions and how you can be adequately protected in any situation – including having a kid head off to college.  Contact us to learn more.

Leaving a child at college can cause separation anxiety for everyone.  Don’t let questions about proper insurance coverage add to that anxiety.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

 

An Endless Battle: Cyber Security Challenges On the Rise

As defenses and insurance coverages against cybercrime improve, so do the methods and the frequency of cybercriminals, it seems.  That only makes the battle more important than ever.

The Insurance Information Institute reports that, according to 2018 Identity Fraud: Fraud Enters a New Era of Complexity from Javelin Strategy & Research, 2017 saw 16.7 million victims of identity fraud, a record high that followed a previous record the year before. Criminals are engaging in complex identity fraud schemes that are leaving record numbers of victims of cybercrime in their wake. The amount stolen hit $16.8 billion last year as 30 percent of U.S. consumers were notified of a data breach last year, an increase of 12 percent from 2016. For the first time, more Social Security numbers were exposed than credit card numbers.

Cyberattacks and breaches have grown in frequency, and losses are on the rise. Breaches again hit a new record in 2017, with 1,579 breaches tracked, up 44.7 percent from 1,091 in 2016, as business and government entities move toward timely reporting, according to the Identity Theft Resource Center (ITRC). The number of records exposed rose to about 179 million, compared with 37 million in 2016. The majority of the data breaches in 2017 affected the business sector, with 870 breaches or 55 percent of the total.

The business category has suffered the most breaches for the third year in a row. Medical/healthcare organizations were affected by 374 breaches (23.7 percent of total breaches). The banking/credit/financial sector ranked third as it sustained 134 breaches (8.5 percent of all breaches). These figures do not include the many attacks that go unreported and undetected.

In 2018 the ITRC tracked 522 breaches through the month of May. The number of records exposed totaled 17.6 million. The business category continues to be the most affected sector, with 228 breaches, or 44 percent of all breaches detected. The business sector breaches affected 10.9 million records, or 62 percent of all records affected. The ITRC noted that in May 2018, hacking was the most commonly used method for breaching organizations, accounting for 37 percent of all breaches in that month.

The team of professionals at The Reschini Group can help you create a cybersecurity insurance package to protect your assets, even amid these complex and serious trends.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

[Source: https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime ]

Know the Score: The Link Between Credit Scores and Insurance

 

Knowing and maintaining your credit score has an effect on more than the interest rate you get on buying a house or car.  It also can impact your cost of insurance.

According to the Insurance Information Institute, the goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money.

This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks—people who are more likely to file claims than they are.

The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. New advances in information technology have led to the development of insurance scores, which enable insurers to better assess the risk of future claims.

An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Statistically, people who have a poor insurance score are more likely to file a claim.  Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.

The wise consumer knows his or her credit score, and takes advantage of advice and assistance on how to improve it.  The benefits extend beyond the obvious, all the way into the cost of your insurance premiums – or if you qualify for insurance at all.  The team of professionals at The Reschini Group can help you get a better understanding of this important connection for your specific situation.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

[Source: https://www.iii.org/article/background-on-credit-scoring ]

A Business Survival Issue: Cyber Security Coverage

Cybersecurity has crossed from being an IT issue to being a business issue, and 2018 promises to see a significant ratcheting up of cybersecurity coverage as a result.

The growing cyber threat and stricter cybersecurity regulations will boost the growth of cyber insurance policies this year, according to industry sources.  According to NetDiligence, whose data is based on actual cyber insurance claims, the average cost of a cyber breach in 2017 was $349,000 for small companies, reaching an average cost $5.9 million for major organizations.

As senior decision-makers understand the level of financial exposure, cyber insurance will need to answer the call more and more.  Allianz predicts that global cyber insurance premiums will grow to $20 billion by 2025, up from around $4 billion currently.

According to a 2017 Ponemon Institute survey, while 87% of companies view cyber liability as one of their top 10 business risks, only 24% admit to having cyber insurance.  That may be due to a lack of clarity about how this coverage works.  Cyber insurance differs from auto or home insurance, where the risks are known and the products haven’t changed that much. It is much more complex and potentially more dangerous than traditional risk.

Organizations need to demonstrate that they have followed best practices to protect consumers and employees. They will also need to shift their approach to cyber-risk management, with a focus on accountability, to identify their threats and insurance needs through a deep technical diagnostic linked to realistic business impact.

The team at The Reschini Group is here to help you assess your need, and assemble the most cost-effective package, for increased cyber coverage to meet your particular situation.

Because it’s not just an IT issue any longer.  Protecting your cyber security is now a front-and-center business survival issue.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

[Source: https://www.rheagroup.com/news/demand-cyber-insurance-will-surge-2018]

Checking the List: Dependent Eligibility Audits

Relationships can shift.  Family structures can change.  Yet what happens when those new alignments do not align with the listing of eligible dependents on a benefits policy?  Problems.  Most of them financial.

Employers are continuously looking for ways to better control medical costs, and one option includes ensuring that everyone listed on the health plan is actually still eligible to receive those benefits.  A dependent eligibility audit can take care of this.

While a major advantage to performing such an audit is to hold down costs, another comes via the fact that plan administrators have a fiduciary duty to administer the plan in accordance with the plan documents, which means that only eligible dependents should receive benefits.  It may even be possible to recover amounts already paid.

When an employee and his or her spouse have recently divorced, for example, the spouse is no longer eligible for benefits – a fact that can often get overlooked.  Most employees who add an ineligible dependent do so unwittingly, through a lack of understanding of what defines an eligible dependent.  Nieces, nephews, and siblings fall into the category of ineligible dependents.

It remains the employer’s responsibility to clearly define eligible dependents, and to make sure that definition is applied among all contracts and the benefits plan document.  Employers should ensure that dependents of new employees are eligible as they are added to the plan.

Some employees may view audits negatively, assuming that their employer is trying to kick some people off of the plan.  The reality, however, is that dependent eligibility audits help employers do what’s best for the plan in the long-term – increasing coverage and controlling the cost of premiums for everyone.

The benefits team at The Reschini Group can offer insight and guidance on dependent eligibility audits and other benefits-related subjects.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

[Source: https://www.employeebenefitadviser.com/news/why-dependent-eligibility-audits-are-increasingly-important-for-employers]

Life Happens: Business Interruption Coverage

When one thinks of “standard” insurance, it’s for damage or loss of property.  Furniture destroyed by a fire, stolen equipment, building damage from a violent storm.  You buy this insurance to help recoup the cost of rebuilding or replacing that property, right?

But life happens.  The unexpected arrives with unexpected consequences.  Such as, losses resulting from a business not being able to operate due to property damage.  That’s a different level of coverage know as business interruption, or business income, insurance.

When a business is shut down due to a damaging event, revenue slows down or ceases entirely.  But, at the same time, the financial obligations of the business continue as before, plus any additional expenses as a result of the disruption.  With business interruption coverage, many of these costs and losses can be reimbursed. According to the Insurance Information Institute, business interruption insurance will cover: revenue lost due to the closure; fixed expenses, such as rent and utility costs; and expenses of operating from a temporary location.

Determining a business interruption loss involves establishing what the business would have earned had the loss not occurred.  Insurance companies take into account past tax returns, profit and loss statements, projected sales and non-continuing expenses.  Business interruption coverage is not sold as a stand-alone policy. It can be obtained as part of the following types of policies:

  • Commercial property insurance—You can add an endorsement or rider to commercial property insurance that will extend the policy’s coverage to business interruption losses.
  • Business owners policy (BOP)—Intended for small businesses, this type of insurance package policy includes property, liability and business interruption coverage.
  • Commercial package policy (CPP)—CPPs are flexible policies that can be customized with a range of options, including business interruption coverage.

Time limits apply to business interruption coverage, so be sure to discuss limitations and exceptions with your insurer or insurance professional, and whether purchasing extended business income coverage is a good option for your business.  The professionals at The Reschini Group are experts in these options, and can help you determine the right business interruption coverage for your unique situation.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

[Source: https://www.iii.org/article/covering-losses-with-business-interruption-insurance]

The Enemy Within: Understanding Fidelity Insurance

It’s the root of all evil, so they say.  And when a person feels he or she has the inside track on how to siphon off some of that money for himself or herself, it surely spells trouble.

Employees and staff support personnel, when hired, are supposed to be loyal to the employer.  They are called on to demonstrate fidelity to the company or organization, in other words.

But occasionally, those employees find that they are not immune to the temptation of taking a little off the top.  The boss will never miss it, they rationalize.  Embezzlement like this can occur in the most unlikely situations, too.  The nice lady who runs the church office.  The 25-year company vice president.  The campaign manager.  They have violated the expectation of fidelity.

The lure of easy money is probably as old as the concept of money itself.  Obviously, that never makes it right or even excusable.  Knowing that it may happen to any organization at any time, however, means establishing the proper protections and recovery options.

Fidelity insurance protects business owners against just such dishonest employees. Companies that allow certain employees access to confidential information, such as financial institutions, benefit from obtaining fidelity insurance. Fidelity insurance covers unauthorized activities on the part of employees, asset protection, external fraud and technology risks.

Fidelity insurance is also called bonding because the fidelity bond reimburses the business owner for damages caused by dishonest employees. For instance, cashiers, bank tellers, corporate officers and directors are generally covered under the employer’s fidelity insurance.

Seemingly easily planned fraud can present a tempting opportunity for those within an organization.  Getting educated about this possibility and putting fidelity insurance stopgaps in place improves your odds in keeping that activity out of your organization.

The objective, experienced, and capable assistance of the team at The Reschini Group can bring your organization the expertise needed to assess the likelihood of fraud and embezzlement to occur, along with ideas on how to both prevent it and to obtain the proper coverage should it take place.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Rx for Savings: Keeping Prescription Costs Low

One of the most significant costs when it comes to health care benefits comes in the form of prescription drug coverage.  By being a wise health care consumer, however, you may be able to reduce your prescription drug costs by a significant margin.

There are a number of ways to keep those costs as low as possible.  Here are a few suggestions:

  1. Shop around at local pharmacies to find the best price on your prescription. Costs can vary a great deal from one pharmacy to the next, so it’s worth the effort to comparison shop.
  1. Be sure to ask your physician about generic or over-the-counter drug alternatives to substitute for brand-name drugs. Make sure, of course, that the ingredients and the  benefits of any generics will be the same as the brand-name option.
  1. Look into discount prescription programs for senior citizens, members of the military, or other demographic groups of which you may be a part.
  1. Investigate using bulk prescription refills. This option, where you receive up to a 90-day supply of a specific prescription by mail, is most applicable to drugs that you may require for an ongoing medical condition.

As with any other part of your health care benefits, it’s important when it comes to your prescription drugs to learn to ask questions, make comparisons, and choose the options that are right for your unique situation.

The Benefits team at The Reschini Group is here to help you with any aspect of your benefits package.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.