Workers' Compensation

Accidents can happen even in the safest workplaces, and employers bear the responsibility to ensure protection even when their safety measures fail. To be prepared for employee accidents, employers must have Workers’ Compensation coverage. A Workers’ Compensation policy cover injuries and accidents that happen while an employee is on the workplace premises or away from the workplace on the course and scope of performing their duties. This insurance provides valuable benefits for the employer and for the employee who sustains injuries.

We believe in the importance of advising and educating our clients so that they understand what is covered by their Workers’ Compensation policy, as well as the basis for its pricing. Each state has varying statutes regarding workers’ compensation, and we pay close attention to each individual state’s statutes. Each state determines what injuries are covered, and to what extent. They also determine how much coverage employers should purchase. Businesses that expand or cross over into other states, as many do in New England, must consider the different rules of each state in which they operate.

Workers who are injured must receive the necessary medical treatment, and there are guidelines for what treatments and diagnostic tests are considered necessary. Benefits for income replacement are based on whether the employee’s disability is temporary or permanent. Although some states allow the benefits to be paid for the entire length of the disability, some place limits on the amount of time that benefits can last.

Employers may wonder whether they need Workers’ Compensation coverage or not. In most cases, unless employees are paid on commission or they’re company partners, employers need to purchase Workers’ Compensation coverage. While some states allow for exemptions, speaking with us about individual state laws regarding Workers’ Compensation insurance is key.

A low volume of claims history, or a positive experience rating, can be beneficial for employers. That’s why we take the time to focus not only on placing coverage for you, but on the safety programs that can help you manage your costs. Guidance like this is part of the partnership you’ll enjoy by working with Mason & Mason on your Workers’ Compensation insurance as well as the other pieces of your insurance program.

Contractors & Subcontractors Insurance Program Team

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"Everyone I have ever spoken with at Mason & Mason always treated me as if I were their biggest client. ...I am a loyal client of Mason & Mason and have no intention of ever changing companies. Sound business planning would say that you should always check prices with other companies, but for me, it’s not always about saving a few dollars. It’s the relationships I’ve developed that are important."


Russ Busa, Sterling Homes Development Corporation

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Motor Vehicle Records—MVRs

Studies show a link between accidents and past driving performance. Most drivers involved in vehicle accidents have had more than one accident or violation during the prior three years. Past driving record is a good indicator of how the person will drive in the future since drivers often continue their established habits. A recent study found that prior traffic violations were the second best predictor of future accidents, second only to prior accident history. Furthermore, studies have shown that almost half of job applicants understate the number of accidents and convictions in their initial application.

Motor Vehicle Records

A driver’s Motor Vehicle Record (MVR) is one of the best predictors of accident experience. MVRs should, therefore, be obtained for all drivers before they go behind the wheel. Obtain MVRs from each state since non‐CDL drivers may possess licenses from more than one. Then check MVRs at least once a year to determine if remedial action is needed.

Obtain written authorization from employees when requesting their MVR information. Consult with legal counsel in the event you decide to take disciplinary action against an employee as a result of any findings contained in the MVR, because there may be certain federal or state laws that apply.

Make MVRs part of driver files. Review them with your drivers. Doing so can provide insight into attitudes toward traffic rules and regulations.

Guidelines for Screening MVRs

If driving is part of the job, MVRs that are clean or acceptable should be a condition of employment. Establish clear standards for what constitutes an acceptable MVR, and the penalties for not having one.

Consider the guidelines listed on page 3. These are the same guidelines used by Hanover/Citizens Insurance Companies; however, exercise caution to assure all applicants and employees are evaluated under the same criteria. Again, you should consult with legal counsel in the event you decide to take disciplinary action against an employee as a result of any findings contained in his or her MVR.

Additional Factors to Consider

A driver’s age may be a contributing factor in vehicle accidents. For example, a youthful operator may possess a clean record; however, because the individual has been licensed a relatively short time, his or her driving experience may be limited.

On the other hand, long term “good” drivers may develop adverse trends over time. You should, therefore, conduct MVR checks on all drivers at least once annually. Again, you should make this periodic check a condition of employment and should obtain written authorization from your employees to do so.

How To Obtain MVRs

State Departments of Motor Vehicles (DMVs) are good sources for Motor Vehicle Records. For links to all 50 state DMVs, visit the AAA DMV website.

Some states offer a service that allows businesses to receive automatic notifications of changes to their drivers’ MVRs. This is an excellent way to provide immediate intervention and counseling of drivers rather than waiting for an annual MVR review.

Sample MVR Program Guidelines

MAJOR VIOLATIONS—One makes driver unacceptable:

  • Negligent homicide within last 5 years
  • Criminal‐type conviction within last 5 years
  • Hit‐and‐run within last 5 years
  • Manslaughter within last 5 years
  • Suspended or revoked license—currently suspended or revolved
  • Drag racing within last 5 years
  • Driving Under Influence/Impaired within last 5 years Moving Violations
  • Reckless driving within last 5 years
  • Careless driving within last 3 years
  • Assault involving a motor vehicle within last 5 years
  • Passing a stopped school bus within last 3 years

UNACCEPTABLE*

  • 3 or more moving violations within the last 3 years
  • 2 or more at‐fault accidents within the last 3 years
  • Violations and accidents combined: More than 1 at‐fault accident and 1 moving violation within the last 3 years when not the same incident

Moving Violations

  • Speeding violations
  • Improper or excessive lane changes
  • Following the vehicle ahead too closely
  • At‐fault accidents (any accident where the driver is cited with a violation, or negligently contributes to the incident OR; any single‐vehicle accident that is not caused by actual equipment failure)
  • Running a red light or stop sign
  • Failure to yield

ACCEPTABLE

  • The driver has violations but does not meet the MAJOR or UNACCEPTABLE criteria

CLEAN

  • No violations listed on the MVR

Please note this list is not all inclusive, but a general guideline of the types of violations that fall into “Major Violations” and “Unacceptable”. The actual wording of a violation varies by state.

*Not‐at‐fault accidents, failure to wear seat belts, failure to register vehicle, failure to maintain vehicle, improperly marked or secured loads, oversize/overweight violations, non‐compliance with financial responsibility laws, and other non‐moving violations may also be considered unacceptable. Multiple incidents of these types of violations may indicate a general disrespect for safety controls and laws.

To learn more about Hanover Risk Solutions, visit hanoverrisksolutions.com


The recommendation(s), advice and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential or exception to good practice. The Hanover Insurance Company and its affiliates and subsidiaries (“The Hanover”) specifically disclaim any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with The Hanover. By providing this information to you, The Hanover does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.

LC JAN 2019 12‐82
171-1025 (02/14)

 


How to Save Money on Workers’ ...

Many industries are experiencing a skilled labor shortage, and the residential construction trade is no exception. The cost of finding and retaining skilled workers is becoming increasingly burdensome on a construction company’s bottom line. You may find yourself increasing your employees’ compensation in order to retain their services and prevent them from accepting attractive financial packages from your competitors. Increasing your costs can make being competitive in job bidding more difficult. 

Striking a balance between losing a job because of a high bid and losing money on a job is a constant battle. It’s imperative to the success of your business that you understand your costs and know how to keep them down. As a residential contractor, you know one of your highest costs is workers’ compensation. But did you know that workers’ compensation offers a program that can put money back in your pocket?

The Massachusetts Construction Classification Premium Adjustment Program (MACCPAP) can help you save money on your workers’ compensation cost! Applications are included in every workers’ compensation policy that contains a construction classification and the hourly rate limits vary by specific class code. For example, if you pay any of your carpenters $31.04 or more and complete the application (included in your policy or online), you may receive a credit check! The higher you pay your employee(s) over $31, the more you can save!

Please contact us if you have questions about your insurance or would like more information on how to access the MACCPAP.


Who’s Your Star?

Small and medium-sized businesses often have employees that are “stars.” Sometimes the star is the CEO or president, other times there is a salesperson who consistently outsells every other sales team member by a two to one margin. Maybe you’re a software company that has a star coder whose ideas led to your product being a number one editor’s choice. The point is that most companies have an employee or two that helps their business thrive. What happens to your business in the short-term if a star employee, referred to by the insurance industry as a “key man,” dies?

According to a study conducted by the National Association of Insurance Commissioners (NAIC), only 22% of small businesses carry this type of coverage.

Death is an issue that most people do not like discussing, so many small and medium-sized businesses do not have detailed succession plans, and key person life insurance remains an unresolved issue. It is a discussion that helps your company survive the difficult times that can follow the death of a key person.

What is Key Person Life Insurance?

Key man life insurance protects a business from economic loss relating to the death of a key employee. The company buys the insurance, owns the policy, and is the beneficiary of the policy in the event of the sudden death of the insured. Payment from the insurance company to the business is a lump sum, and there are no restrictions on how the company can use the money. Most companies use the money to stabilize the business until they find the key person’s replacement.

Types of Key man Life Insurance

Businesses gravitate to two kinds of policies for key employee life insurance.

Term Life Insurance. Startups favor this type of policy. Startups always try to conserve cash, term life insurance is cheaper than any other kind of personal life insurance.

Policies that build cash value. Whole life or universal life insurance builds cash value that increases the cash value of the policy and is an asset on the company’s book. The company can get access to the excess cash value of the policy at any time for any purpose since the money from the cash buildup belongs to them.

Life insurance premiums vary between companies and smart companies comparison shop for the best insurance program.

The discussion is uncomfortable, but if you do not have key man insurance, it’s worth talking about.