Congrats Abram Finkelstein…this year’s recipient of NAPEO’s Michaeline A. Doyle Award!

As most know, NAPEO is hosting its annual conference virtually this week.  It is with great excitement we announce that our client and friend, Abram Finkelstein, received this year’s Michaeline A. Doyle Award.

The purpose of this award it to recognize an individual who has provided exemplary leadership and service in devoting his/her time to association or industry activities on a local or national basis, with little or no previous recognition for his/her efforts. The award aims to recognize the person whose business philosophy is to improve the industry while improving his/her own PEO.

This award is in memory of Michaeline A. Doyle who exemplified these characteristics in her relationships with our industry and association.

Again, congrats to Abram!  Well deserved!

Phishing Scam Targeting PEOs

See below from our friends at NAPEO…

 

 

 

 

Today, a PEO notified NAPEO that they and their clients were the victims of a novel phishing scam. Under this scheme, fake Google advertisements were created to mimick the PEO’s legitimate ads and appeared when any variation of the PEO’s name was searched. The phony ads then redirected anyone who clicked on them to a phony log-in page for the PEO’s payroll software. The unaware victims had their personal information captured, including usernames and passwords.

The PEO is working with Google to take down the fraudulent ads. They have also notified all victims and have secured any jeopardized accounts.

Please remain vigilant against these types of scams. You should also consider checking to see if any of your company’s Google ads are being mimicked to commit fraud. Additionally, you should consider recommending that all clients and employees enable two factor authentication, where available.

 

Recent COVID-19 Claims Examples and Changes

Check out the article below to see some examples of COVID-19 claims and how it is affecting employers, carriers and employees alike.
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Coronavirus/COVID-19 is affecting Florida workers’ compensation claims in a variety of ways, including litigation events (being required to appear telephonically for events or having to continue final hearings due to delays in being able to depose physicians) and the actual workers’ compensation claims themselves as discussed below.

On April 24, 2020, Judge Timothy Stanton of the Gainesville Office of Judges of Compensation Claims found in Gomez, Esteban v. Ridgeway Roof Truss/Zenith Insurance Company, OJCC Case No. 19-016953TSS (Final Compensation Order dated April 24, 2020)  that “based upon the COVID-19 pandemic and its associated risks and restrictions,” the employer’s/carrier’s selection of a physician an hour away from the claimant’s home whereby the claimant would be transported to the medical appointment in “close proximity to a stranger, in an enclosed vehicle for close to two hours for each medical visit that may expose him and his family to COVID-19 (was) unreasonable.” The employer/carrier was required to select and authorize a local physician to provide the claimant with medical treatment, whereby his wife could drive him to appointments, due to Florida being “engulfed in the Coronavirus (COVID-19) pandemic” and preventing the spread of this virus.

On May 14, 2020, Judge Robert Arthur of the Lakeland Office of Judges of Compensation Claims opined asserting that an injured employee’s failure to meet its prima facia burden to show entitlement to temporary partial disability benefits (i.e. in asserting there was a break in the causation chain due to COVID-19) is an affirmative defense that should be listed on the Uniform Pretrial Stipulation.  “The parties are required to set forth their claims and defenses in the Pretrial Stipulation. It is the employer’s/carrier’s burden to demonstrate a break in the causation chain. As the employer/carrier bears the burden to establish the break in the causal chain this is an affirmative defense that must be pled with specificity on the Pretrial Stipulation.” See Gamero-Hernandez, Teresa v. Beals/Sedgwick CMS, OJCC Case Nos. 17-023646RAA; 18-007955RAA (Final Compensation Order dated May 14, 2020) citing Knight v. Walgreens, 109 So. 3d 1224 (Fla. 1st DCA 2013); Perez v. Se. Freight Lines, Inc., 159 So. 3d 412 (Fla. 1st DCA 2015); Meehan v. Orange County Data & Appraisals, 272 So. 3d 458 (Fla. 1st DCA 2019)

On May 21, 2020, Judge Keef Owens of the Port St. Lucie Office of Judges of Compensation Claims denied a claimant’s motion for an advance of $2,000.00 as the claimant failed to demonstrate (1) a failure to return to employment at no substantial wage reduction; (2) a substantial loss of earning capacity; or (3) an actual or apparent physical impairment. Judge Owens stated, “An advance serves as a ‘stopgap to help a claimant avoid defaulting with creditors while awaiting the potential distribution of workers’ compensation benefits, when the reduction in income is caused by the injury.” In this case, the claimant was not working for the employer because she had been furloughed due to COVID-19.  As such, Judge Owens found that her “reduction of earnings is not a result of her work-related accident” and therefore no advance was due and owing to the claimant. See Paradise, Kyley v. Global Hospitality Management/MEMIC Indemnity Co., OJCC No. 20-004078KFO (Evidentiary Order on Claimant’s Motion for Advance dated May 21, 2020 (citations omitted.)

The decisions amongst the various Offices of Judges of Compensation Claims may vary on a case-by-case basis. In general, it appears that JCCs prefer employer’s/carrier’s to limit exposure by coordinating appointments that the claimant is able to drive to, without the need for providing means of transportation.  Any COVID-19 affirmative defenses need to be listed on the Uniform Pretrial Stipulation or same will be waived as a defense.  And when determining whether an advance may be due and owing to an injured employee, the employer/carrier should further investigate whether the claimant’s reduction in income is due to the industrial accident or rather furloughs due to COVID-19.

Remember that coronavirus/COVID-19 exposure claims are being treated as occupational injuries and/or exposure.  These claims have a higher burden of proof and require the claimant to use a clear and convincing burden of proof to prove causation in relation to Florida Statute Sections 440.01(1) and 440.151(1)(a) and (2).

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This article was written by Amanda Mitteer Bartley with Chartwell Law. Article link is below:

https://www.jdsupra.com/legalnews/various-effects-of-coronavirus-on-96202/

Beazley Speaks on EPL Changes for Businesses Affected by COVID-19

There has been a lot of discussion as of late regarding the impact of COVID-19 on Workers’ Compensation, Business Interruption, Health Benefits, etc., but what about Employment Practices Liability?  Below is a great overview of the ever changing landscape of EPL due to COVID from our friends at Beazley.

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Around the world, governments responded to the COVID-19 pandemic in March 2020 by implementing various restrictions on the movement of people through quarantines, lock-downs, stay at home orders, and other similar measures.  Businesses, particularly those in the service and retail industries, were most affected by these measures.  People were staying home, which meant no customers:  No diners at restaurants.  No shoppers in the malls.  Nobody getting haircuts, manicures, pedicures, or massages.  Many of the affected businesses have either announced permanent or indefinite closures or reduced service, and consequently, have had to furlough, layoff, or permanently terminate the employment of hundreds of thousands of employees.

 

Many businesses with financial difficulties are Client Companies of PEOs.  As a result, with both new and old Claims, Beazley has noticed an increase in Client Companies unwilling or unable to pay amounts for defense or indemnity within their SIR.  For Client Companies facing an uncertain financial future, they are unwilling to engage in settlement negotiations or mediation.  Rather than committing their limited resources to settlement, Client Companies want to preserve or use those funds to keep their businesses running by paying employees and other overhead expenses that remain despite reduced business income.  Unfortunately, there are also some Client Companies whose businesses will not survive; and they are simply unable to fund amounts of settlements within their SIRs.  There is no one size fits all solution.  All Insureds have differing limitations; and Beazley has been working collaboratively with its PEOs and Client Companies Insureds to strategize the best approach to resolving each claim in this COVID-19 environment.

 

Moving forward, Beazley anticipates more COVID-19 related claims including:

 

  • Claims for violations of the Family Medical Leave Act (FMLA) and/or the Families First Coronavirus Response Act (FFCRA) for discrimination, retaliation, wrongful termination, or failure to rehire for voicing concerns or making requests regarding COVID-19, missing work to recover from (or care for another with) COVID-19, etc.
  • General notices of mass layoffs or reductions in force.  (Note:  Typically, coverage is unavailable, but in certain circumstances, an Employment Event sublimit coverage may be available.)
  • Third Party Discrimination against persons of Asian descent.

 

As part of the renewal process, Beazley is considering PEOs and Staffing Firms’ strategies to addressing COVID-19 and the COVID-19 induced recession.  Some of Beazley’s questions are:

 

  1. Does the PEO work with their Client Companies to ensure they have an effective Business Continuity Plan for COVID-19?
  2. What protocols do the PEO and their Client Companies have if worksite employees are or were infected with COVID-19?
  3. Are Client Companies required to consult with the PEO before any terminations, and layoffs, reductions in force, or downsizing?
  4. What support does the PEO provide their Client Companies with to comply with employment laws, including the FMLA and FFCRA?
  5. Does the PEO offer advice to their Client Companies regarding worksite employees working from home?

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To hear more about the impact on Employment Practices Liability due to COVID-19, please join NAPEO’s EPLI Webinar, this Thursday July 16th, 12pm ET. Libertate’s own President, Paul Hughes, will be moderating.

https://www.napeo.org/events/events-calendar/town-hall-series

The New Normal….Pandemic Insurance Products

It was only a matter of time before insurers began to develop products to cover pandemics.  The products range from traffic monitor apps that pay insureds based on a minimum threshold to relapse coverage that protects businesses forced to shut down a second time.  The complete article from Reuters is below.

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Insurers are creating products for a world where virus outbreaks could become the new normal after many businesses were left out in the cold during the COVID-19 crisis.

While new pandemic-proof policies might not be cheap, they offer businesses from restaurants to film production companies to e-commerce retailers ways of insuring against disruptions and losses if another virus strikes.

The providers include big insurers and brokers adding new products to existing coverage, as well as niche players that see an opportunity in filling the void left by mainstream firms that categorize virus outbreaks like wars or nuclear explosions.

Tech firm Machine Cover, for example, aims to offer policies next year that would give relief during lockdowns. Using apps and other data sources, the Boston-based company measures traffic levels around businesses such as restaurants, department stores, hairdressers and car dealers.

If traffic drops below a certain level, it pays out, whatever the reason.

“This is the type of coverage which … businesses thought they had paid for when they bought their current business interruption policies before the coronavirus pandemic,” the company’s founder Inder-Jeet Gujral told Reuters.

“I believe this will be a major opportunity because post-COVID, it would be as irresponsible to not buy insurance against pandemics as it would be to not buy insurance against fire.”

The company is backed by insurer Hiscox and individual investors, mostly from the insurance and private equity world.

Restaurants in Florida’s Miami-Dade County, where Mayor Carlos Gimenez on Monday ordered dining to shut down soon after reopening, are now reeling, said Andrew Giambarba, a broker for Insurance Office of America in Doral, Florida.

“It’s been like they made it to the ninth round of the fight and were holding on when this punch came out of nowhere,” said Giambarba, whose clients include restaurants that did not get payouts under their business interruption coverage.

“Every niche that is dealing with insurance that is affected by business interruption needs every new product they can have.”

Filling the Void

Pandemic exemptions have helped some insurers emerge relatively unscathed and the sector has largely resisted pressure to provide more virus cover. Indeed, some insurers that paid out for event cancellations and other losses have removed pandemics from their coverage.

British risk managers association Airmic said last week that the pandemic had contributed to a lack of adequate insurance at an affordable price and most of its members were looking at other ways to reduce risk.

To help fill the void in a locked-down world, Lloyd’s of London insurer Beazley Plc, started selling a contingency policy last month to insure organizers of streamed music, cultural and business events against technical glitches.

“These events are completely reliant on the technology working and a failure can be financially crippling,” said Mark Symons, contingency underwriter at Beazley.

Marsh, the world’s biggest insurance broker, has teamed up with AXA XL, part of France’s AXA, and data firm Arity, which is part of Allstate, to help businesses such as U.S. supermarket chains, restaurants and e-commerce retailers cope with the challenges of social distancing.

With home deliveries surging, firms have hired individual drivers to meet demand, but commercial auto liability insurance for “gig” contractors with their own vehicles is hard to find.

Marsh and its partners devised a policy based on usage with a price-by-mile insurance, which can be cheaper than typical commercial auto cover as delivering a pizza doesn’t have the same risks as driving people around.

“Even when the pandemic is over, we believe last-mile delivery will continue to grow,” said Robert Bauer, head of Marsh’s U.S. sharing economy and mobility practice.

A report by consultants Capgemini showed that demand for usage-based insurance has skyrocketed since COVID-19 first broke out and more than 50% of the customers it surveyed wanted it.

However, only half of the insurers interviewed by Capgemini for its World Insurance Report said they offered it.

Bespoke Cover

Since businesses are only now learning how outbreaks can affect them, some new products are effectively custom-made.

Elite Risk Insurance in Newport Beach, California, has been offering “COVID outbreak relapse coverage” since May for businesses forced to shut down a second time, its founder Jeff Kleid said.

The policies are crafted around specific businesses and only pay out when certain conditions are met, Kleid said.

For film and television production companies that could be when a cast member contracts the virus, forcing them to stop shooting. Another client, which raises livestock for restaurants, is covered for a scenario in which it would be impossible to get animal feed.

Such policies do not come cheap. A $1 million policy could cost between about $80,000 to $100,000 depending on the terms.

“The insurance … is costly because it covers a risk that does not have a historical basis for calculating the price,” Kleid says.

And in March, when COVID-19 ravaged northern Italy, Generali’s Europ Assistance offered medical help, financial support and teleconsultations for sufferers when discharged from hospital, on top of regular health insurance.

It sold 1.5 million policies in just two weeks and now has 3 million customers in Europe and United States.

Some insurers are also working on changes to employee compensation and health insurance schemes. With millions of workers not expected to return to offices anytime soon, some large insurers in Asia are preparing coverage to account for that, according to people familiar with those efforts.

At least one Japanese insurer has started work on a product to cover employees for injury while working at home, they said.

“Working from home will be the new normal for years to come. That would make the scope of the employee compensation scheme meaningless if a person suffers an injury while at home,” said a Hong Kong-based senior executive at a European insurer.

(Reporting by Noor Zainab Hussain in Bengaluru, Suzanne Barlyn in Washington Crossing, Pennsylvania, Carolyn Cohn in London and Sumeet Chatterjee in Hong Kong; additional reporting by Muvija M; Editing by Tomasz Janowski and David Clarke)

https://www.insurancejournal.com/news/international/2020/07/10/575081.htm

 

Commercial Lines Prices Rose +6% During Q1

According to a survey conducted by Willis Towers Watson, Property and Casualty premiums increased by over 6% in aggregate during Q1 which marks the 2nd quarter in a row for such an increase.   As has been the trend for years, Workers’ Compensation was the only line to experience consistent rate reductions during the same time period. However, many presume there is a hard market ahead for comp as well. Time will tell.

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U.S. commercial insurance prices climbed more than 6 percent in aggregate during the 2020 first quarter compared to the year, Willis Towers Watson’s pricing survey for the sector.

Price increases surpassed 6 percent in aggregate for the second quarter in a row, Willis Towers Watson said.

Once again, nearly all commercial lines saw price hikes. Some saw double-digit increases: Directors and Officers liability, excess/umbrella, commercial auto and property.

For most other lines, however, Willis Towers Watson said price changes trended higher at a similar rate to the previous quarter.

Price increases were more muted for small commercial accounts and higher across mid-market accounts, with large accounts nearing double digits, Willis Towers Watson said.

Workers’ compensation continued to be a notable exception with many carriers reporting rate reductions, Alejandra Nolibos, senior director, Insurance Consulting and Technology for Willis Towers Watson, said in prepared remarks.

As well, Nolibos said that the statistics don’t yet reflect reactions to short and midterm impacts of COVID-19, “among them changes in task and employment mix and the economic situation.” He said that continued analysis of emerging data will track those effects for future premium trends.

Willis Towers Watson’s CLIPS survey is a retrospective look at historical changes in commercial property/casualty insurance (P&C) prices and claim cost inflation.

Source: Willis Towers Watson

https://www.insurancejournal.com/news/national/2020/06/09/571470.htm

 

NCCI Presumptions Tracker

Below are the latest updates from NCCI regarding state presumptions:

Illinois: (Past by Both Chambers on 5.22.20) HB 2455 In Part, Provides That There is a Rebuttable Presumption That an Employee’s Contraction of COVID-19 Arises Out of and in the Course of the Employee’s First Responder or Frontline Worker Employment and That the Injury or Occupational Disease Shall Be Rebuttably Presumed to Be Causally Connected to the Hazards or Exposures of the Employee’s First Responder or Frontline Worker Employment

Massachusetts: (In Joint Committee) HB 4739 Creates a Presumption of Relatedness for Essential Workers Suffering From COVID-19

Michigan: (In Senate Committee) SB 928 Relates to Infectious Disease Presumption for Essential Employees During a Declared Emergency

Ohio: (Introduced the Below)

HB 667 Makes COVID-19 Contracted by a Corrections Officer an Occupational Disease   Under the Workers Compensation Law

HB 668 Makes Coronavirus Contracted by a Peace Officer, Firefighter, or     Emergency Medical Worker an Occupational Disease Under the Workers Compensation Law

As a reminder, NCCI provides regular updates regarding presumption activity.  To access the tracker, click here.

Stay Safe,

Team Libertate