Handling workers’ compensation can be a stressful task for business owners. During MGIX 2018 in Columbus, Ohio, which took place Jan. 15 to 17, Cordell Walton, program manager at Columbus-based CareWorksComp, discussed some common workers’ compensation mistakes.
CareWorksComp serves as an expert on workers’ compensation, risk and claims management, and Walton outlined 10 of the most common mistakes:
1. Not understanding the system. Taking the time to familiarize yourself and your employees with your workers’ compensation program will help claims go smoother.
2. Not being involved. An easy way to be proactive in your workers’ comp process is to be actively involved. Walton suggests checking job sites and identifying any possible hazards.
3. Not having a knowledgeable point person. It’s imperative to develop a good relationship with your MCO (managed care organization).
4. Not having an injury reporting process in place. There needs to be a process understood by all employees in case of a workplace injury. “Always instruct your people to report to their superiors immediately when an injury happens,” Walton says. He also suggests putting the process in the employee handbook and having everyone sign off on it.
5. Missing deadlines. Missing a deadline can leave you with a lapse in coverage. If you receive discounts or rebates, you may lose those discounts after 40 days without coverage. You must report your payroll every year on April 15.
6. Not understanding how rates are established. This also ties in to paying attention to deadlines. Your payroll report factors into your rates, so giving timely and accurate numbers will keep your rate where it needs to be.
7. Not understanding how claims can impact your bottom line. Walton says to keep in mind that claims impact your rates for four years.
8. Not taking advantage of discount programs. There are different groups and rates for each company’s situation. For example, companies with no workers’ comp claims could see up to a 53 percent discount on their workers’ comp rates.
9. Not understanding and utilizing claim cost control strategies. Any proactive efforts like documenting any incidents can help control your claim costs.
10. Lack of communication with your MCO/TPA (third-party administrator)/BWC(bureau of workers’ compensation)/Claimant. Whenever an incident occurs or a claim is made, you need to ensure all the right people are in communication, even the person who was injured. This will help build your claim.
Six standard areas to insure: Keep your garden center protected
Marc McTeague, partner with SeibertKeck Insurance, has been involved in insuring green industry businesses for about 25 years.
During MGIX 2018, McTeague broke down a few standard areas of insurance and why each should be covered:
Stuff that sits still. This is your building, the contents inside and any of your inventory. “If you lease your building, you absolutely need water/fire legal liability coverage,” he says.
Anything inside your building is known as “contents,” even if it can be moved. Mowers and other equipment are all considered “contents.”
Stuff that moves. Large equipment, trucks, rented equipment and some materials need to be covered by insurance for when they are in transit or operation.
Your people. McTeague says employees can be the most dangerous part of your business in terms of liability. The “people” side of your insurance includes workers’ compensation, both in-state and out of state, and employment practices liability.
“Employment practices liability covers all those ‘isms’ you could encounter,” he says. “This includes racism, sexism, ageism, harassment and wage or hour disputes.”
McTeague says this type of coverage is essentially paying for your attorney if a situation occurs. But, companies need to understand that this may only apply to intracompany incidents. He also suggests having something called key person life insurance. If something were to happen to a key player in your company, there would be life insurance on that person.
Your work. Insuring your work will protect your products, property damage, subcontractor relationships and even mistakes.
“Error and omissions coverage will cover you if you misread a plan and have to restart your entire project. You will have a cushion with that coverage,” he says.
Having insurance on property damage will protect anything that may be damaged while in your care, custody or control. Additionally, when using a subcontractor, they are covered as if they are part of your company with this type of insurance. However, McTeague recommends subcontractors also get their own insurance to be safe.
Your customer. You will be able to insure anything in your care, custody or control on a jobsite. McTeague also considers issues regarding client feelings. These third-party employee policies cover liability claims brought by nonemployees, like customers and clients.
The public. Companies should consider additional protections for your business. You’ll also want to look into your liability when it comes to issues in neighboring properties. For instance, if you spray a yard and the wind carries the chemical next door and kills all the flowers.
“You must have an umbrella policy,” McTeague says. “Everyone needs this, no matter your size.”
Successful succession planning tips for family-owned businesses
A family business has more moving parts than other businesses, says Kelly Jasin, attorney and partner at Emens & Wolper Law in Columbus, Ohio. During MGIX 2018, Jasin highlighted several barriers that keep a family business running smoothly, especially in times of a transition of power.
“There’s a very high failure rate when it comes to passing the business to the second generation,” she said. A risk of failure can be reduced if the people involved in the business ensure there are steps in place to handle any curveballs when it comes to ownership succession.
Jasin explained how these seven areas of succession contribute to the future success of the business:
1. Leadership: The current owner needs to set an example for any potential owners.
2. Management: The prospective owner needs to be prepared to manage the employees of the company.
3. Authority: The prospective owner needs to have knowledge of the important authority figures and should communicate to the employees that authority will switch to them when they take over the company.
4. Values: The company values need to align with the prospective owner’s values.
5. Knowledge: The prospective owner needs to know the ins and outs of the company.
6. Relationships: The prospective owner should start forging relationship with key players involved in this business. Jasin suggested establishing relationships with any key advisers and accountants.
7. Ownership: This is the final part of the succession of the business.
“It takes about seven to 10 years to develop a good succession plan,” she says.
To start on the right foot and ensure the seven points are addressed, the current owner and the future owner should fill out a “wants and needs” analysis.
“This will get the communication started,” Jasin says. “Communication makes or breaks the family business.”
Some questions to have the current owner answer may include what their vision is, what they need in order to cut back on their power, and what they need to happen first in order to begin the process of passing down their business.
For the prospective owner, have them answer questions, such as what they need (it may be power, recognition or control for instance), if they are ready or what they need to feel ready, and what they wish the current owner would let them do.
Jasin recommends preparing early, as you never know what may come up. Pre-negotiating contracts that come with the “what if” scenarios that may be running through an owner’s head can ease nerves and feelings of uncertainty. “Pre-negotiating is by far the best strategy for successful succession of the family business,” she says.
Jasin also identifies a few aspects of a family business that may result in a failing company.
Fair isn’t equal. This is challenging in families that have multiple children who could potentially run the business. Jasin said hiring someone just because they are family is never the way to go.
Individual goals versus family goals. Some individuals may not have the same thing in mind when it comes to the family business.
Conflict management. Jasin says sibling rivalry often plagues the success of a family business. Current owners (mom and dad, for example) may not realize their children are still holding onto old disagreements, setting them up for more conflict down the line.