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| Staged accidents skyrocket |
In recent years there has been a disturbing increase in the number of staged car accidents, according to the National Insurance Crime Bureau. Between 2007 and 2009 the number of questionable insurance claims increased by 46 percent, according to the bureau.
"Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars," according to a statement from the bureau.
The schemes are known by colorful names like the "swoop and squat" and the "left turn drive down." The swoop and squat is the most common scheme and involves as many as three cars working together. Two cars "swoop" in front of the victim's car while a third drives along side it, which keeps the victim from changing lanes. The car directly in front of the victim's car then slams on its brakes - squats - causing the victim to hit the criminals' car, which of course is full of passengers all claiming to be hurt.
Florida, despite being fourth in total population, easily had the highest number of questionable claims based on staged accidents, according to the bureau. Florida had more than 3,000 such claims while the next two states with the highest claims - New York and California - had just over 1,600. And three of the five cities with the most reported staged accidents were in Florida as well.
The bureau has some common-sense suggestions for avoiding being a victim in these staged accidents. Drivers should avoid tailgating, something that could avoid the accident in the first place. But if you or your employees happen to get into an accident, make sure to immediately take pictures of the damage. This can be accomplished by making sure there is always a disposable camera in the car. Alternatively, most cell phones are capable of taking pictures. Also, always make sure to call the police and get a report on the accident, even if the damage is minimal. These steps can prevent any criminal from later exaggerating the damage from the accident.
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| A foul consequence of heavy rain |
Heavy rains around the country have caused major flooding in places like Nashville, which suffered an estimated $1.4 billion in damage. But while major flooding is covered under a flood insurance policy, one particularly foul consequence of heavy rains is not usually covered unless you buy a separate but inexpensive rider: sewer backups.
Sewers can back up when sewage systems become clogged or overwhelmed in heavy downpours. These backups can lead to expensive damage to homes and businesses. The Insurance Information Institute cautions that floors, walls, furniture and electrical systems are all vulnerable to damage. And not only that, but the sewage can also lead to health problems.
The institute lists a number of common reasons that sewer systems will back up, such as combined pipelines and tree roots.
The aging systems have contributed to a substantial increase in the number of sewage backups in recent years. The Civil Engineering Research Foundation reports that the number of backed up sewers is increasing at an alarming rate of about 3 percent annually, according to the institute. And as America's infrastructure continues to age, sewage backups will become more common.
Adding to the problem of aging systems is combined systems. Many buildings combine sewage and runoff in the same pipe. This can lead to overloaded systems during particularly heavy rain storms, which in turn can lead to sewage backing up into buildings.
The institute has some tips for avoiding sewage back ups:
- Dispose of Grease Properly: Cooking oil should not be poured down the drain. Washing grease down the drain with hot water can cause significant problems. As the grease cools off, it will solidify causing the line to constrict and eventually clog.
- Dispose of Paper Products Properly: Paper products other than bathroom tissue can cause many problems because they do not deteriorate quickly.
- Replace your line with new plastic pipe: One way to prevent tree roots from entering your line is to replace your line and tap with new plastic pipe. If you still have problems with tree roots growing in your lateral, you may have to have roots cut periodically.
- Install a Backwater Prevention Valve: A backwater valve is a fixture installed into a sewer line, and sometimes into a drain line, in the basement of your home or business to prevent sewer backflows. A properly installed and maintained backwater valve allows sewage to go out, but not to come back in.
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| Guidance on medical marijuana users |
The Oregon Supreme Court has joined California and Washington in ruling that medical marijuana users can be fired for drug use. The Oregon court ruled that even those with a state-issued medical marijuana card can be fired and that laws requiring that disabled workers be accommodated does not extend to pot users.
"The highest court in the state has now said that employers need not accommodate medical marijuana users in the workplace. Employers should feel free to consistently apply zero-tolerance policies, consistently disciplining those who violate the policy and refusing to hire those applicants who fail drug screens, regardless of medical marijuana registry status," said Associated Oregon Industries, an industry trade group.
There are now 14 states that allow medical marijuana to be prescribed to treat a variety of illnesses. The federal government, however, maintains that the drug has no medical benefit and the drug remains illegal for all purposes at the federal level. This conflict has left employers in a difficult situation. Employees who use the drug for medical reasons appear to be protected under state law, but they also appear to be in direct violation of federal law. California, Oregon and Washington courts have cleared up this problem by allowing employers to fire any employee using drugs banned under federal law. But confusion remains in other states.
AOI now recommends that employers in Oregon inform their employees in writing that medical marijuana is prohibited just like any other controlled substance.
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| Supply chain vulnerabilities |
As the world economy becomes more integrated, the potential for your business to be affected by events on the other side of the world continues to grow. The supply chain for even the most seemingly local business can now stretch across the world and can be affected by volcanoes in Iceland or oil spills in the Gulf of Mexico.
The volcano in Iceland effectively shut down air travel across much of Europe for days and has caused sporadic airport closures in the weeks since the volcano first erupted. This trapped employees and high-value goods in Europe, disrupting business around the world. Similarly, the oil spill in the Gulf of Mexico has the potential to close ports and slow down shipping. This could create shipping bottlenecks that tie up goods inbound for the United States.
"Today's extended global supply chains often do not provide the transparency needed to ensure a continuous flow of products and parts under current circumstances," said Gary Lynch, of Marsh Risk Consulting. "While it is easy to check the inventory of products destined for the ultimate buyer, it is more difficult to assess inventories of component parts or ingredients used in intermediate production or by suppliers several steps removed."
The first step in managing the risk created by long supply chains is to know your supply chain. And not just your supply chain, but the supply chain of your most critical suppliers. Be sure to also have contingency plans in place in case there is a disruption in the main method of supply. This can mean considering alternative methods of transport and alternative suppliers in advance of any disruption. A good plan might also involve diversification of suppliers so that your company isn't totally dependent on one source of critical goods. Sole sourcing is a critical vulnerability. The key is to know the risks and to think through solutions before there is a problem.
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| Addition by subtraction in storm prediction |
The National Hurricane Center has updated the familiar 1 through 5 scale for hurricane intensity for the 2010 season by removing estimates for storm surge and inland rainfall. Including surge forecasts in the scale proved to be impractical and misleading, according to the NHC.
The problem with including storm surge in the forecast is that the level of storm surge is highly localized, the NHC explained in announcing the change. A storm that would produce a small storm surge in one place would produce a much larger surge in another.
For example, if Hurricane Ike had hit in Palm Beach, Florida, rather than Texas, the storm surge would have been only 8 feet instead of 20 feet. This difference is largely explained by the differences in water depth off the coast. The previous versions of the scale did not take these local factors into account and therefore regularly produced inaccurate predictions. The updated scale now only takes into account wind speed and leaves rain and storm surge predictions out.
A category one hurricane is defined as having sustained winds between 74 and 95 miles per hour that will produce "some damage." A category two hurricane has sustained winds of 96 to 110 mph and will cause "extensive damage." A category three hurricane has sustained winds of 111 to 130 mph and will cause "devastating damage." A category four hurricane will have sustained winds between 131 and 155 mph and do "catastrophic" damage. The largest hurricanes are classified as category five storms and have sustained winds greater than 155 mph.
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| Summer brings teens to work |
Summer is here, and with summer comes teenagers looking for summer jobs - many for the first time. These teenagers can be a valuable resource for companies looking for temporary or part-time workers. However, employers looking to hire teenagers should keep in mind the legal and practical limits of teenage workers.
First, state law will often limit what young people can do and for how long they can do it. Operating machinery is often prohibited, but the specifics of what they can and can't do varies from state to state. States also have differing rules on the number of hours teens can work and how late they can work. Make sure to check the laws of your state before hiring anyone under the age of 18.
Second, even if a teenager is legally allowed to do something, employers should make sure younger workers are given more training and supervision than you might give an older worker. Many of these teens will be working for the first time and something that seems like common sense to you might be lost on a 16-year-old.
"Teens are eager to work and may not question a workplace situation that doesn't seem right, so we must do all we can to create safe workplaces for them," said Michael Silverstein, of Washington state's Department of Labor & Industries.
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| Business Briefs: Soft market continues |
The soft insurance premium market continued in the first quarter of the year, according to a report from the Risk and Insurance Management Society. However, the society notes that the potential for an above-average hurricane season could mean rising premiums in the near future. "Insurance capacity is abundant throughout the commercial lines market, but the lingering impact of the global recession has reduced the demand for that capacity," said Dave Bradford of Advisen, which put together the data for the survey. "Abundant capacity coupled with diminished demand keeps downward pressure on rates. As things now stand, insurance buyers can anticipate another year of favorable insurance prices, although catastrophe claims always are a wild card in the pricing cycle." Now is a good time to form a partnership with your insurer. Take advantage, but not too much advantage, of the circumstances. The market will turn, as it has happened numerous times before, and there again will come a time when you want your insurer more than they want you.
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| Business Briefs: A "Shameless" accusation |
A Florida man faces arson and insurance fraud charges after authorities said he set his yacht - ironically named the "Shameless" - on fire, according to a report in the Tallahassee Democrat. The defendant, who denies all the charges, faces up to 65 years in prison if convicted. Authorities say the man set his boat ablaze then filed a false insurance claim for more than $375,000. This kind of insurance fraud is on the rise, according to a recent survey of state fraud bureaus by the Coalition Against Insurance Fraud. Much of this rise is blamed on the bad economy.
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