U.S. Department of Labor Occupational Safety and Health Administration (OSHA) has officially suspended the Obama administration rule requiring companies to electronically file injury and illness reports.
The controversial rule was supposed to be in effect as of January 1, 2017, as we reported earlier in our Sur Advice Blog: “OSHA’s Big Change: What Does It Mean For You?” posted on February 2, 2017. However, OSHA did not launch the website that would have served as the portal for reporting.
The rule was vehemently opposed by multiple business groups. The Associated Builders & Contractors, the National Association of Home Builders and the Associated General Contractors of America all challenged the rule declaring it potentially damaging to the reputations of their members. Many companies expressed concern that information that is publicly disclosed could potentially be exaggerated and manipulated to possibly smear and damage reputations. Noting that accidents and injuries are a part of almost every workplace and that an accident or injury does not necessarily make the company an unsafe or dangerous place to work.
On the flip side, David Michaels, Head of OSHA from 2009 to 2017 says, “We know by making injury rates public some employers will work to prevent injuries because they want to be seen as safe employers and they want to be seen as good employers.” In addition an as we reported earlier, Michaels also says, “Access to injury data will also help OSHA better target compliance assistance and enforcement resources, and enable ‘big data’ researchers to apply their skills to making workplaces safer”.
OSHA intends to propose extending the date for reporting to July 1, 2017. According to OSHA spokeswoman Mandy Kraft, the agency has delayed the rule in order to address employers’ concerns about the rule. Approximately 441,000 workplaces are covered under the required reporting ruling making it a potentially massive measure. Again, click here http://bit.ly/2ePzE4y for more information about all potentially effected industries.
Keeping our Clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.
Recently, the federal government has implemented several changes that have resulted in an increased number of claims for W&H violations made against employers. And all indictors are pointing to more on the way. But first let’s define W&H and take a quick look at its history.
WHAT IS W&H?
It is commonly – and incorrectly assumed that W&H claims are restricted to either misclassification of exempt/nonexempt employment status or failure to pay overtime. However, W&H liability also includes allegations such as:
underpayment of overtime
not paying overtime
miscalculating wages
refusing breaks
expecting employees to work off the clock
not paying employees regularly
refusing to pay exempt employees for absences
following federal minimum wage guidelines when state guidelines warrant higher pay
A BRIEF HISTORY
In 1938, the Department of Labor’s passed the Fair Labor Standards Act (FLSA) giving birth to wage and hour claims. The law defined which employees were to receive overtime pay (nonexempt) and which were not (exempt). Since that time, W&H claims have risen steadily, with sharp increases starting in 1993 and additional increases every year.
THE NEWS
Recently, the federal government has implemented several changes that have resulted in an increased number of claims for W&H violations made against employers. And all indictors are pointing to more on the way.
New federal overtime rules taking effect in December 2016 will extend overtime payprotection to 4.2 million workers who are currently exempt. That, as well as proposedrules that would require companies to provide a breakdown of pay by race, gender andethnicity will likely bring more allegations of W&H violations.
THE RULES
Federal Legislation and Regulation
Overtime Pay
On December 1, 2016, the new federal overtime rule took effect. The biggest changes are the redefining of what it means to be an exempt and nonexempt worker. Thus, overtime pay protection will extend to 4.2 million workers who currently earn less than $47,476 annually. Also, there is a mechanism for automatic updates every three years, beginning on January 1, 2020 expanding the number of employees falling under W& H guidelines.
Franchisors: In the August 2015 Browning-Ferris Industries decision, the National Labor Relations Board refined its standard for determining joint-employer status. The decision held that two or more entities could be considered employers of a single workforce if:
they are both employers within the meaning of the common law; and
they share or codetermine those matters governing the essential terms and conditions of
This decision impacts staffing firms, subcontractors, and franchisees.
Equal Pay
In January of 2016 , the Obama Administration proposed new rules that would require companies to report what their employees are paid, broken down by race, gender, and ethnicity. Meant to close the gender pay gap, the new rules would apply to employers with 100 or more employees. Of course, in light of the new administration, this proposal remains up in the air. But it’s definitely something to keep in mind.
Coverage Limitations
Unfortunately, W&H violations are rarely covered by employment practices liability insurance (EPL). Many U.S. carriers are willing to endorse their standard EPL forms, on a case-by-case basis, to grant defense costs only W&H coverage, up to a specified sublimit.
THE SOLUTION
As new legislation and changes to employment rules come into effect, it’s critical that you are informed and well prepared with proper coverage and both short and long term strategies. Keeping our clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.
https://air-sur.com/wp-content/uploads/2017/03/Wage-Hour.jpg467702dianahttps://air-sur.com/wp-content/uploads/2015/10/logo-Air-Sur.pngdiana2017-03-04 00:31:042017-03-04 00:31:04Wage and Hour (W&H) Rules Are In and Claims Are Up: What You Need to Know
The United States Department of Labor Occupational Safety and Health Administration (OSHA) has significantly changed the way that workplace injuries are reported and accounted for. Essentially, workplace injuries and illnesses are now required to be submitted by employers for online publication to a public website. In the past, this information was only revealed to OSHA during the process of inspections or surveys, and now reporting and the unlimited access to that reporting are sure to have a dramatic effect on employers.
WHAT DOES IT MEAN?
From OSHA’s perspective, David Michaels, Assistant Secretary of Labor for OSHA says, “Our new rule will nudge employers to prevent work injuries, to show investors, job seekers, customers and the public they operate safe and well-managed facilities.” Michaels goes on to say. “Access to injury data will also help OSHA better target compliance assistance and enforcement resources, and enable ‘big data’ researchers to apply their skills to making workplaces safer”.
RETALIATION PENALTIES
In addition to the new reporting, the rule also invokes penalties for employers that take actions deemed retaliatory against employees who report accidents. This particular policy went into effect August 1, 2016 but OSHA began enforcing on November 1, 2016. The retaliation penalties could mostly effect employers that have safety incentive programs or require drug testing after an accident. Requiring drug testing for those with job related injuries also could be seen as pressure to NOT report an accident. Drug Testing has previously been an invaluable tool when it comes to post accident claims, and a tool to keep companies safe.
THE CHANGES: WHEN AND HOW
The new regulations take place on January 1, 2017 and require employers (based upon size of company) to submit injury and illness data electronically to OSHA.
Employers with more than 20 employees in specified “high-risk” industries, which includes Scheduled Air Transportation and Support Activities for Air Transportation, must submit their FORM 300A by July 1 in 2017 and 2018, and by March 2 every year thereafter.
Employers with more than 250 employees, OSHA is requiring submissions from 2016 and injury recordkeeping Form 300A by July 1, 2017. Then the following year these employers are required to submit information from all 2017 forms (300A, 300 and 301) by July 1, 2018. Beginning in 2019, and for future years, the information must be submitted by March 2nd.
Click here http://bit.ly/2ePzE4y for more information about all industries effected.
GETTING PREPARED
Of course we can help prepare you and your company for the challenges that come with the new OSHA Rules, but in the meantime, the following details the first, four steps that are essential.
Update injury and illness reporting procedures.
If you do not currently have injury and illness reporting procedures in place, then create them.
Eliminate automatic post injury drug testing and replace it with a policy that requires an individual assessment of each employee and accident.
Train staff on identifying impaired employees and how to document any incidents that may trigger OSHA reporting.
Marking a complete departure from the current practices, OSHA is requiring much of employers, and we are here to help.
Keeping our Clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.
https://air-sur.com/wp-content/uploads/2017/02/Rules-Regulations-web.jpg463500Tomhttps://air-sur.com/wp-content/uploads/2015/10/logo-Air-Sur.pngTom2017-02-02 15:51:512017-02-05 17:02:38OSHA’s Big Change: What Does It Mean For You?
An Aircraft Fleet Manager is directly responsible for all items relevant to the administration and quality control of the fleet. They must supervise and manage the day-to-day activities including aircraft maintenance, flight crews, training, scheduling, dispatch and compliance with regulations.
In addition, and equally important to the above, is that Aircraft Fleet Managers need to procure and maintain the insurance on all aircraft under management. Insurance industry best practices recommend that the Aircraft Manager, or FAR Part 135 Air Carrier Certificate holder, be the point person on this critical component. Very simply, it’s not a sound risk management practice to rely on a third party’s insurance policy to protect the aircraft management company.
For instance, if the aircraft owner obtains the aircraft insurance, then the Aircraft Manager’s appointed insurance agent or broker will not have any authority to manage the critical function of claims. Claims by their very nature are problematic and aircraft owner and underwriter expectations need to be managed carefully to have a satisfactory result that leave both relationships intact for the Aircraft Manager.
In most cases, the Aircraft Manager has valuable experience negotiating fleet insurance programs. They work with commercial aviation insurance brokers. They know their underwriters and have relationships that, in many cases, span several years. Most importantly, they understand the claim handling process from experience.
The Aircraft Manager can have Peace of Mind that every time an aircraft is dispatched he has insurance coverage with standardized pilot warranties/training requirements, territories, limits of liability and purpose of use.
The Advantages Are Clear
Aircraft Managers who are given this task are empowered to more effectively manage and perform their task. This arrangement ensures the elimination of the following:
Eliminates the need to “chase” each aircraft owner for adequate proof of insurance. This includes very precise additional insured and waiver of subrogation language that have to be tracked and reviewed for compliance.
Eliminates duplication of certificates of insurance for interested parties, which can be literally hundreds with all the charter brokers, customers and other interested parties.
Potential Objections & Obstacles
Aircraft owner resistance to insuring their aircraft under the Aircraft Managers Fleet Policy generally fall into these areas:
They want control over the insurance.
They already have an existing insurance policy and broker relationship.
Perception that the Aircraft Manager may be over charging for the cost of the insurance.
Some feel they can get a cheaper price – and they may, depending on a number of individual factors.
Concern over not being covered in the event the Aircraft Manager voids the coverage.
Air-Sur Expertise
At Air-Sur, our knowledgeable and highly experienced team can provide you with key insights that can address any of the above “objections” and help you make informed decisions that are best for you and your business. Please contact us today and let’s get started.
https://air-sur.com/wp-content/uploads/2016/10/aircraft-fleet-mgr.jpg463694Tomhttps://air-sur.com/wp-content/uploads/2015/10/logo-Air-Sur.pngTom2016-10-04 17:16:522017-02-05 17:10:21Aircraft Fleet Managers and Their Critical Role in Procuring and Maintaining Aviation Insurance
The second part of any effective Disaster Plan is a Recovery Plan. A Recovery Plan details the steps it will take to put your business back on its feet as quickly as possible.
Following a loss, companies must deal with all the issues of the loss while simultaneously dealing with issues of re-building, work and revenue recovery.
Starting over means legal issues, planning for cash flow needs, temporary facilities, retaining key employees, satisfying creditors and demolition of damaged facilities. Next there’s rebuilding when replacing equipment, rebuilding inventory, securing building permits and hiring contractors all come in to play.
Work Recovery means getting work levels back to pre-loss levels, rehiring employees if needed, and rebuilding work-in-progress.
Revenue Recovery can obviously take longer as it is about recapturing the market and restoring sales to the level they would have been if no loss had occurred.
Having a roadmap for recovery gives you a tremendous advantage and allows you to get executional quickly and hit the ground running.
Where to Begin
Obviously, the first step in disaster planning is avoiding the potential of being “under insured” in the event of a serious loss. The second and more critical step is map- ping out an approach that will ultimately give the control and confidence that you’ve “planned for the unplanned.” This is probably the single most consistent area where we feel our clients need to plan and prepare more. While it may seem uncomfortable to contemplate the “unthinkable,” planning for the perpetuation of your business in the event of a serious loss is a critical management consideration.
At Air Sur, we work with our clients to developcomprehensiverisk management plans, and strongly encourage a detailed disaster plan. In response to the growing complexity of our client’s organizations and their risk management needs, our Professional Client Care® program delivers cutting edge solutions that provide you with maximum organization and accessibility to EVERY part of your corporate insurance program.
https://air-sur.com/wp-content/uploads/2016/09/disaster-recovery-1.jpg293353dianahttps://air-sur.com/wp-content/uploads/2015/10/logo-Air-Sur.pngdiana2016-09-12 19:08:322016-09-12 19:17:32Disaster Planning: Thinking the Unthinkable Part II
Business owners have plenty on their plates with the very real, day-to-day responsibilities that come with running a business. So, to ask them to stop and fully imagine a disaster, and its ramifications can seem overwhelming and a cruel and unnecessary exercise. However, when the reality is… asking them to do just that is one of the most valuable things that they can ever do.
Let’s face it, imagining worst case scenarios is not how anyone wants to spend their time. It can be scary, stressful and overwhelming. But smart business owners do. The fact of the matter is at Air-Sur, “planning and thinking through critical scenarios” is something that we encourage you to do.
Our experience has shown that the most effective way any complex organization can protect itself against loss is through a comprehensive risk management program. And a critical component of this program should be the development of a Disaster Plan – a clearly thought through, well written plan that outlines how your corporation would continue if it suffered a catastrophic loss such as fire, wind- storm or other major loss.
The Two Phase Plan
Phase One: Evaluate, Plan & Protect
AssetEvaluation Not only is this the cornerstone of any Disaster Plan, it is also a critical part of your overall Risk Management effort. For some assets, determining current value can be done from invoices and current financial records. The real trick is often defining replacement value, particularly for your significant assets such as real property and/or business personal property. Here you may wish to consider the assistance of a professional insurance appraiser (as opposed to a real estate appraiser) to help identify a realistic replacement cost in light of current and anticipated market conditions.
ReplacementPlanning Planning for business continuation and the replacement of critical assets such as buildings or computer systems presents some unique considerations. Replacing existing buildings may be more difficult due to new zoning requirements or building codes that will affect not only cost, but your ability to replace a structure in a reasonable time frame with similar size/capabilities. On the other hand, certain assets such as computers may cost less to replace with equal or enhanced capability, given the tremendous change in technology.
Income Protection Income protection planning is one of the most important parts of this process, and one that is often not evaluated properly. Your cash stream is critical to protecting vital “non-insurable” assets such as your employees, and having funds available to help protect your market position, etc. Make sure you adequately assess your needs.
While income protection insurance can be purchased in different formats, we generally recommend you consider blanket coverage for a set “face” amount. This removes confusing co-Insurance consideration, plus provides coverage for “ordinary payroll” expenses to help more effectively retain your employees during reconstruction.
Check back for Part Two in our next blog; detailed information on Post Disaster Recovery Plans.
At Air Sur, we work with our clients to developcomprehensiverisk management plans, and strongly encourage a detailed disaster plan. In response to the growing complexity of our client’s organizations and their risk management needs, our Professional Client Care® program delivers cutting edge solutions that provide you with maximum organization and accessibility to EVERY part of your corporate insurance program.
Our number one priority is you and Protecting Your Future at Every Moment® which includes the good times and the unthinkable times. Please contact us today and let’s get started keeping you and your company safe and sound.
https://air-sur.com/wp-content/uploads/2016/08/fotolia_97409590.jpg334500Tomhttps://air-sur.com/wp-content/uploads/2015/10/logo-Air-Sur.pngTom2016-08-16 20:51:082016-08-16 20:52:56Disaster Planning: Thinking the Unthinkable
ELECTRONIC REPORTING RULE SUSPENDEDMay 22, 2017 - 9:18 pm
Wage and Hour (W&H) Rules Are In and Claims Are Up: What You Need to KnowMarch 4, 2017 - 12:31 am
OSHA’s Big Change: What Does It Mean For You?February 2, 2017 - 3:51 pm
ELECTRONIC REPORTING RULE SUSPENDED
/in News/by dianaU.S. Department of Labor Occupational Safety and Health Administration (OSHA) has officially suspended the Obama administration rule requiring companies to electronically file injury and illness reports.
The controversial rule was supposed to be in effect as of January 1, 2017, as we reported earlier in our Sur Advice Blog: “OSHA’s Big Change: What Does It Mean For You?” posted on February 2, 2017. However, OSHA did not launch the website that would have served as the portal for reporting.
The rule was vehemently opposed by multiple business groups. The Associated Builders & Contractors, the National Association of Home Builders and the Associated General Contractors of America all challenged the rule declaring it potentially damaging to the reputations of their members. Many companies expressed concern that information that is publicly disclosed could potentially be exaggerated and manipulated to possibly smear and damage reputations. Noting that accidents and injuries are a part of almost every workplace and that an accident or injury does not necessarily make the company an unsafe or dangerous place to work.
On the flip side, David Michaels, Head of OSHA from 2009 to 2017 says, “We know by making injury rates public some employers will work to prevent injuries because they want to be seen as safe employers and they want to be seen as good employers.” In addition an as we reported earlier, Michaels also says, “Access to injury data will also help OSHA better target compliance assistance and enforcement resources, and enable ‘big data’ researchers to apply their skills to making workplaces safer”.
OSHA intends to propose extending the date for reporting to July 1, 2017. According to OSHA spokeswoman Mandy Kraft, the agency has delayed the rule in order to address employers’ concerns about the rule. Approximately 441,000 workplaces are covered under the required reporting ruling making it a potentially massive measure. Again, click here http://bit.ly/2ePzE4y for more information about all potentially effected industries.
Keeping our Clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.
Wage and Hour (W&H) Rules Are In and Claims Are Up: What You Need to Know
/in News/by dianaTHE CHANGES
Recently, the federal government has implemented several changes that have resulted in an increased number of claims for W&H violations made against employers. And all indictors are pointing to more on the way. But first let’s define W&H and take a quick look at its history.
WHAT IS W&H?
It is commonly – and incorrectly assumed that W&H claims are restricted to either misclassification of exempt/nonexempt employment status or failure to pay overtime. However, W&H liability also includes allegations such as:
A BRIEF HISTORY
In 1938, the Department of Labor’s passed the Fair Labor Standards Act (FLSA) giving birth to wage and hour claims. The law defined which employees were to receive overtime pay (nonexempt) and which were not (exempt). Since that time, W&H claims have risen steadily, with sharp increases starting in 1993 and additional increases every year.
THE NEWS
Recently, the federal government has implemented several changes that have resulted in an increased number of claims for W&H violations made against employers. And all indictors are pointing to more on the way.
New federal overtime rules taking effect in December 2016 will extend overtime pay protection to 4.2 million workers who are currently exempt. That, as well as proposed rules that would require companies to provide a breakdown of pay by race, gender and ethnicity will likely bring more allegations of W&H violations.
THE RULES
Federal Legislation and Regulation
On December 1, 2016, the new federal overtime rule took effect. The biggest changes are the redefining of what it means to be an exempt and nonexempt worker. Thus, overtime pay protection will extend to 4.2 million workers who currently earn less than $47,476 annually. Also, there is a mechanism for automatic updates every three years, beginning on January 1, 2020 expanding the number of employees falling under W& H guidelines.
Franchisors: In the August 2015 Browning-Ferris Industries decision, the National Labor Relations Board refined its standard for determining joint-employer status. The decision held that two or more entities could be considered employers of a single workforce if:
This decision impacts staffing firms, subcontractors, and franchisees.
In January of 2016 , the Obama Administration proposed new rules that would require companies to report what their employees are paid, broken down by race, gender, and ethnicity. Meant to close the gender pay gap, the new rules would apply to employers with 100 or more employees. Of course, in light of the new administration, this proposal remains up in the air. But it’s definitely something to keep in mind.
Unfortunately, W&H violations are rarely covered by employment practices liability insurance (EPL). Many U.S. carriers are willing to endorse their standard EPL forms, on a case-by-case basis, to grant defense costs only W&H coverage, up to a specified sublimit.
THE SOLUTION
As new legislation and changes to employment rules come into effect, it’s critical that you are informed and well prepared with proper coverage and both short and long term strategies. Keeping our clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.
OSHA’s Big Change: What Does It Mean For You?
/in News/by TomThe United States Department of Labor Occupational Safety and Health Administration (OSHA) has significantly changed the way that workplace injuries are reported and accounted for. Essentially, workplace injuries and illnesses are now required to be submitted by employers for online publication to a public website. In the past, this information was only revealed to OSHA during the process of inspections or surveys, and now reporting and the unlimited access to that reporting are sure to have a dramatic effect on employers.
WHAT DOES IT MEAN?
From OSHA’s perspective, David Michaels, Assistant Secretary of Labor for OSHA says, “Our new rule will nudge employers to prevent work injuries, to show investors, job seekers, customers and the public they operate safe and well-managed facilities.” Michaels goes on to say. “Access to injury data will also help OSHA better target compliance assistance and enforcement resources, and enable ‘big data’ researchers to apply their skills to making workplaces safer”.
RETALIATION PENALTIES
In addition to the new reporting, the rule also invokes penalties for employers that take actions deemed retaliatory against employees who report accidents. This particular policy went into effect August 1, 2016 but OSHA began enforcing on November 1, 2016. The retaliation penalties could mostly effect employers that have safety incentive programs or require drug testing after an accident. Requiring drug testing for those with job related injuries also could be seen as pressure to NOT report an accident. Drug Testing has previously been an invaluable tool when it comes to post accident claims, and a tool to keep companies safe.
THE CHANGES: WHEN AND HOW
The new regulations take place on January 1, 2017 and require employers (based upon size of company) to submit injury and illness data electronically to OSHA.
Employers with more than 20 employees in specified “high-risk” industries, which includes Scheduled Air Transportation and Support Activities for Air Transportation, must submit their FORM 300A by July 1 in 2017 and 2018, and by March 2 every year thereafter.
Employers with more than 250 employees, OSHA is requiring submissions from 2016 and injury recordkeeping Form 300A by July 1, 2017. Then the following year these employers are required to submit information from all 2017 forms (300A, 300 and 301) by July 1, 2018. Beginning in 2019, and for future years, the information must be submitted by March 2nd.
Click here http://bit.ly/2ePzE4y for more information about all industries effected.
GETTING PREPARED
Of course we can help prepare you and your company for the challenges that come with the new OSHA Rules, but in the meantime, the following details the first, four steps that are essential.
Marking a complete departure from the current practices, OSHA is requiring much of employers, and we are here to help.
Keeping our Clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.
Aircraft Fleet Managers and Their Critical Role in Procuring and Maintaining Aviation Insurance
/in News/by TomAn Aircraft Fleet Manager is directly responsible for all items relevant to the administration and quality control of the fleet. They must supervise and manage the day-to-day activities including aircraft maintenance, flight crews, training, scheduling, dispatch and compliance with regulations.
In addition, and equally important to the above, is that Aircraft Fleet Managers need to procure and maintain the insurance on all aircraft under management. Insurance industry best practices recommend that the Aircraft Manager, or FAR Part 135 Air Carrier Certificate holder, be the point person on this critical component. Very simply, it’s not a sound risk management practice to rely on a third party’s insurance policy to protect the aircraft management company.
For instance, if the aircraft owner obtains the aircraft insurance, then the Aircraft Manager’s appointed insurance agent or broker will not have any authority to manage the critical function of claims. Claims by their very nature are problematic and aircraft owner and underwriter expectations need to be managed carefully to have a satisfactory result that leave both relationships intact for the Aircraft Manager.
In most cases, the Aircraft Manager has valuable experience negotiating fleet insurance programs. They work with commercial aviation insurance brokers. They know their underwriters and have relationships that, in many cases, span several years. Most importantly, they understand the claim handling process from experience.
The Aircraft Manager can have Peace of Mind that every time an aircraft is dispatched he has insurance coverage with standardized pilot warranties/training requirements, territories, limits of liability and purpose of use.
The Advantages Are Clear
Aircraft Managers who are given this task are empowered to more effectively manage and perform their task. This arrangement ensures the elimination of the following:
Potential Objections & Obstacles
Aircraft owner resistance to insuring their aircraft under the Aircraft Managers Fleet Policy generally fall into these areas:
Air-Sur Expertise
At Air-Sur, our knowledgeable and highly experienced team can provide you with key insights that can address any of the above “objections” and help you make informed decisions that are best for you and your business. Please contact us today and let’s get started.
Disaster Planning: Thinking the Unthinkable Part II
/in News/by dianaPhase Two: The Road to Recovery Plan
The second part of any effective Disaster Plan is a Recovery Plan. A Recovery Plan details the steps it will take to put your business back on its feet as quickly as possible.
Following a loss, companies must deal with all the issues of the loss while simultaneously dealing with issues of re-building, work and revenue recovery.
Starting over means legal issues, planning for cash flow needs, temporary facilities, retaining key employees, satisfying creditors and demolition of damaged facilities. Next there’s rebuilding when replacing equipment, rebuilding inventory, securing building permits and hiring contractors all come in to play.
Work Recovery means getting work levels back to pre-loss levels, rehiring employees if needed, and rebuilding work-in-progress.
Revenue Recovery can obviously take longer as it is about recapturing the market and restoring sales to the level they would have been if no loss had occurred.
Having a roadmap for recovery gives you a tremendous advantage and allows you to get executional quickly and hit the ground running.
Where to Begin
Obviously, the first step in disaster planning is avoiding the potential of being “under insured” in the event of a serious loss. The second and more critical step is map- ping out an approach that will ultimately give the control and confidence that you’ve “planned for the unplanned.” This is probably the single most consistent area where we feel our clients need to plan and prepare more. While it may seem uncomfortable to contemplate the “unthinkable,” planning for the perpetuation of your business in the event of a serious loss is a critical management consideration.
At Air Sur, we work with our clients to develop comprehensive risk management plans, and strongly encourage a detailed disaster plan. In response to the growing complexity of our client’s organizations and their risk management needs, our Professional Client Care® program delivers cutting edge solutions that provide you with maximum organization and accessibility to EVERY part of your corporate insurance program.
Disaster Planning: Thinking the Unthinkable
/in News/by TomBusiness owners have plenty on their plates with the very real, day-to-day responsibilities that come with running a business. So, to ask them to stop and fully imagine a disaster, and its ramifications can seem overwhelming and a cruel and unnecessary exercise. However, when the reality is… asking them to do just that is one of the most valuable things that they can ever do.
Let’s face it, imagining worst case scenarios is not how anyone wants to spend their time. It can be scary, stressful and overwhelming. But smart business owners do. The fact of the matter is at Air-Sur, “planning and thinking through critical scenarios” is something that we encourage you to do.
Our experience has shown that the most effective way any complex organization can protect itself against loss is through a comprehensive risk management program. And a critical component of this program should be the development of a Disaster Plan – a clearly thought through, well written plan that outlines how your corporation would continue if it suffered a catastrophic loss such as fire, wind- storm or other major loss.
The Two Phase Plan
Phase One: Evaluate, Plan & Protect
Asset Evaluation
Not only is this the cornerstone of any Disaster Plan, it is also a critical part of your overall Risk Management effort. For some assets, determining current value can be done from invoices and current financial records. The real trick is often defining replacement value, particularly for your significant assets such as real property and/or business personal property. Here you may wish to consider the assistance of a professional insurance appraiser (as opposed to a real estate appraiser) to help identify a realistic replacement cost in light of current and anticipated market conditions.
Replacement Planning
Planning for business continuation and the replacement of critical assets such as buildings or computer systems presents some unique considerations. Replacing existing buildings may be more difficult due to new zoning requirements or building codes that will affect not only cost, but your ability to replace a structure in a reasonable time frame with similar size/capabilities. On the other hand, certain assets such as computers may cost less to replace with equal or enhanced capability, given the tremendous change in technology.
Income Protection
Income protection planning is one of the most important parts of this process, and one that is often not evaluated properly. Your cash stream is critical to protecting vital “non-insurable” assets such as your employees, and having funds available to help protect your market position, etc. Make sure you adequately assess your needs.
While income protection insurance can be purchased in different formats, we generally recommend you consider blanket coverage for a set “face” amount. This removes confusing co-Insurance consideration, plus provides coverage for “ordinary payroll” expenses to help more effectively retain your employees during reconstruction.
Check back for Part Two in our next blog; detailed information on Post Disaster Recovery Plans.
At Air Sur, we work with our clients to develop comprehensive risk management plans, and strongly encourage a detailed disaster plan. In response to the growing complexity of our client’s organizations and their risk management needs, our Professional Client Care® program delivers cutting edge solutions that provide you with maximum organization and accessibility to EVERY part of your corporate insurance program.
Our number one priority is you and Protecting Your Future at Every Moment® which includes the good times and the unthinkable times. Please contact us today and let’s get started keeping you and your company safe and sound.