OSHA Stays Serious About Temp Worker Safety

While the Trump administration has eased off a number of regulations and enforcement actions during the past two years, Fed-OSHA continues focusing on the safety of temporary workers as much as it did under the Obama presidency.

This puts the onus not only on the agencies that provide the temp workers, but also on the companies that contract with them for the workers.

As evidence of its continued focus on temp workers, OSHA recently released guidance on lockout/tagout training requirements for temporary workers. This was the third guidance document released in 2018 and the 10th in recent years that was specific to temp workers.

One reason OSHA is so keen on continuing to police employers that use temporary workers, as well as the staffing agencies that supply them, is that temp workers are often given some of the worst jobs and possibly fall through the safety training cracks.

OSHA launched the Temporary Worker Initiative in 2013. It generally considers the staffing agency and host employer to be joint employers for the sake of providing workers a safe workplace that meets all of OSHA’s requirements, according to a memorandum by the agency’s office in 2014 to its field officers.

That same memo included the agency’s plans to publish more enforcement and compliance guidance, which it has released steadily since then.

Some of the topics of the temp worker guidance OSHA has released since the 2014 memorandum include:

  • Injury and illness record-keeping requirements
  • Noise exposure and hearing conservation
  • Personal protective equipment
  • Whistleblower protection rights
  • Safety and health training
  • Hazard communication
  • Bloodborne pathogens
  • Powered industrial truck training
  • Respiratory protection
  • Lockout/tagout

Joint responsibility

OSHA started the initiative due to concerns that some employers were using temporary workers as a way to avoid meeting obligations to comply with OSHA regulations and worker protection laws, and because temporary workers are more vulnerable to workplace safety and health hazards and retaliation than workers in traditional employment relationships.

With both the temp agency and the host employer responsible for workplace safety, there has to be a level of trust between the two. Temp agencies should come and do some type of assessment to ensure the employer meets OSHA standards, and the host employer has to provide a safe workplace.

Both host employers and staffing agencies have roles in complying with workplace health and safety requirements, and they share responsibility for ensuring worker safety and health.

A key concept is that each employer should consider the hazards it is in a position to prevent and correct, and in a position to comply with OSHA standards. For example: staffing agencies might provide general safety and health training, and host employers provide specific training tailored to the particular workplace equipment/hazards.

Successful joint employer relationship traits

  • The key is communication between the temp agency and the host to ensure that the necessary protections are provided.
  • Staffing agencies have a duty to inquire into the conditions of their workers’ assigned workplaces. They must ensure that they are sending workers to a safe workplace.
  • Ignorance of hazards is not an excuse.
  • Staffing agencies need not become experts on specific workplace hazards, but they should determine what conditions exist at the host employer, what hazards may be encountered, and how best to ensure protection for the temporary workers.
  • The staffing agency has the duty to inquire and verify that the host has fulfilled its responsibilities for a safe workplace.
  • And, just as important, host employers must treat temporary workers like any other workers in terms of training and safety and health protections.

For a look at all 10 of the guidance documents OSHA has issued in the last few years, visit the agency’s temp worker page: www.osha.gov/temp_workers/

Top 10 Laws and Regulations for 2019

Every year comes with new laws and regulations that affect employers.

It pays to stay on top of all the new requirements, so we are here to help you understand those that are most likely to affect your business. The following are the top 10 laws, regulations and trends that you need to know about going into 2019.

1 Sexual harassment training

Since 2005, California law has required employers having 50 or more employees to provide at least two hours of sexual harassment training to supervisors every two years. SB 1343 changes this by requiring employers with five or more employees to provide non-supervisory employees with at least one hour by Jan. 1, 2020.
In addition, this training must be held every two years. Employers with five or more workers must provide (or continue to provide) two hours of the biennial supervisory training, as well.

2 Data privacy

Companies that collect data on their customers online should start gearing up in 2019 for the Jan. 1, 2020 implementation of the California Consumer Privacy Act of 2018, which is the state’s version of the European Union’s General Data Protection Regulation.

The law gives consumers the following rights in relation to their personal information:

  • The right to know, through a general privacy policy and with more specifics available upon request, what personal information a business has collected about them, where it was sourced from, what it is being used for, whether it is being disclosed or sold, and to whom it is being disclosed or sold;
  • The right to “opt out” of allowing a business to sell their personal information to third parties;
  • The right to have a business delete their personal information; and
  • Not be discriminated against by opting out.

The law applies to businesses that:

  • Have annual gross revenues in excess of $25 million,
  • Annually buy, receive for their own commercial purposes, or sell or share for commercial purposes, the personal information of 50,000 or more consumers, households or devices, and/or
  • Derive 50% or more of their annual revenues from selling consumers’ personal information.

    3 Independent contractors

While this legal development happened in 2018, now is a good time to go over it. In May, the California Supreme Court handed down a decision that rewrites the state’s independent contractor law.

In its decision in Dynamex Operations West, Inc. vs. Superior Court, the court rejected a test that’s been used for more than a decade in favor of a more rigid three-factor approach, often called the “ABC” test.

Employers now must be able to answer ‘yes’ to all three parts of the ABC test if they want to classify workers as independent contractors:

  • The worker is free from the control and direction of the hirer in relation to the performance of the work, both under the contract and in fact;
  • The worker performs work that is outside the usual course of the hirer’s business; and
  • The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.

The second prong of the ABC test is the sentence that really changes the game. Now, if you hire a worker to do anything that is central to your business’s offerings, you must classify them as an employee.

4 Electronic submission of Form 300A

In November 2018, Cal/OSHA issued an emergency regulation that requires California employers with more than 250 workers to submit Form 300A data covering calendar year 2017 by Dec. 31, 2018. The new regulation was designed to put California’s regulations in line with those of Federal OSHA.

Starting in 2019, affected employers will be required to submit their Form 300A data by March 2. For instance, the 2018 summary would have to be posted before March 2, 2019. The law applies to:

  • All employers with 250 or more employees, and
  • Employers with 20 to 249 employees in specified high-risk industries.

    5 Harassment non-disclosure

This law, which takes effect Jan. 1, 2019, bars California employers from entering into settlement agreements that prevent the disclosure of information regarding:

  • Acts of sexual assault;
  • Acts of sexual harassment;
  • Acts of workplace sexual harassment;
  • Acts of workplace sex discrimination;
  • The failure to prevent acts of workplace sexual harassment or sex discrimination; and
  • Retaliation against a person for reporting sexual harassment or sex discriminat

The big issue employers will need to watch out for, according to experts, is that the new law could actually keep the employer and employee from reaching resolutions for disputes.

We will cover the five other top laws and regulations in our next blog post. 

Safety Risks Soar as Job Market Tightens

One by-product of a strong economy is more employment, but the increased activity usually results in more workplace injuries.

That’s because there are more inexperienced people on worksites and when a company is busy and there is more activity, the chances of an incident occurring also increase. This is especially the case in manual labor environments from production facilities, warehousing and logistics to construction and other trades.

The September USG + U.S. Chamber of Commerce Commercial Construction Index found that 80% of contractors said that the skilled labor shortage is affecting jobsite safety and it’s the number one factor increasing safety risk on the jobsite.

As business activity grows and the job market tightens, many companies are forced to hire more inexperienced workers who are not skilled at understanding all safety hazards.

Experienced personnel have the know-how to identify workplace hazards and understand the safety protocols for all aspects of their work. While training can help new hires, nothing beats experience.

Additionally, with many businesses working hard to fulfill orders, workplaces are busier, which can cause some workers to cut corners or take risks. Amidst all that hustle and bustle and people moving quickly, the speed and activity can also contribute to accidents in the workplace.

Also, aggressive scheduling may cause employers to use workers with less experience or training, and can push employees to work longer hours, which can lead to shortcuts and compromised processes. If employees are working overtime, they may also be tired and fatigued, which can contribute to poor judgment and workplace incidents.

One other issue that’s affecting workplace safety and is related to the tight job market is that employers are often having to settle for workers they may not normally hire in other times. As you know, the scourge of opioid addiction has been rampant and unfortunately if someone who has an addiction is hired, they may be a serious liability for the employer.

Not only that, but more states are legalizing recreational marijuana and nearly 40 states have medical marijuana laws on the books. In many cases, people can easily get their hands on a medical marijuana card without an affliction that would require a prescription.

Here’s what’s concerning construction employers on the worker addiction front, according to the USG + U.S. Chamber of Commerce Commercial Construction Index:

  • 39% were concerned about the safety impacts of opioids.
  • 27% were concerned about the safety impacts of alcohol.
  • 22% were concerned about the safety impacts of cannabis.

The report showed that while nearly two-thirds of contractors have strategies in place to reduce the safety risks presented by alcohol (62%) and marijuana (61%), only half have strategies to address their top substance of concern: opioids, which is a growing issue.

What you can do

In this environment of labor shortages and high competition for workers, employers should focus on:

  • Creating a culture of safety.
  • Improving the safety climate in the worksite.
  • Improving the firm’s safety culture.
  • Providing more leadership training for supervisors.
  • Tracking near misses and injuries, and identifying the factors that led to the near miss or accident.
  • Ensuring accountability at all levels.
  • Demonstrating management’s commitment to safety.
  • Empowering and involving employees in the safety process.

Tackling substance abuse safety risks

The top strategies employers are using to reduce safety risks caused by substance abuse are:

  • Testing
  • Prescreening before hiring
  • Education
  • Communication oversight by supervisors
  • Zero tolerance policies
  • Counseling
  • Access to rehab.

Raft of Sexual Harassment Laws Puts Pressure on Employers

California Gov. Jerry Brown has signed into law a number of bills that will drastically change the landscape for employers trying to resolve sexual harassment and discrimination claims.

Brown signed three bills that will make it easier for workers to bring claims of harassment and discrimination in the workplace, and curtail the ability of employers to resolve the claims with motions for summary judgment.

They will also prohibit non-disclosure agreements, and will expand the number of employers that will be required to provide anti-sexual-harassment training to their staff.

Any organization with employees needs to be aware of the new laws to avoid any future legal quagmires, as failing to comply with some of these laws could drastically increase an employer’s liability.

Here’s a rundown of what you need to know:

SB 1343

Existing law requires that organizations with 50 or more employees provide two hours of sexual-harassment prevention training to supervisors every two years. This was mandated two years ago under another piece of legislation, AB 1825.

The new law expands this training requirement to all employers in California with five or more employees.

But SB 1343 goes beyond requiring only supervisors to be trained by also requiring that it must be provided to all employees every two years.

SB 820

This law takes effect Jan. 1, 2019 and will bar California employers from entering into settlement agreements that prevent the disclosure of information regarding:

  • Acts of sexual assault;
  • Acts of sexual harassment;
  • Acts of workplace sexual harassment;
  • Acts of workplace sex discrimination;
  • The failure to prevent acts of workplace sexual harassment or sex discrimination; and
  • Retaliation against a person for reporting sexual harassment or sex discrimination.

The big issue employers will need to watch out for, according to experts, is that the new law could actually keep the employer and employee from reaching resolutions for disputes.

SB 1300

This new law bars other nondisclosure agreements related to claims of sexual harassment, and also overturns prior court rulings that have limited harassment lawsuits.

SB 1300 bars employers from requiring an employee to sign a release of a Fair Employment and Housing Act claim or signing a non-disparagement or nondisclosure agreement related to unlawful acts in the workplace, including sexual harassment in exchange for a raise or bonus, or as a condition of employment or continued employment.

One good thing, the prohibition does not apply a “negotiated settlement agreement to resolve an underlying claim under [FEHA].”

The new law will also make it more difficult to collect attorneys’ fees and costs. Now they will only be granted if the court finds that the action was “frivolous, unreasonable, or totally without foundation when brought or the plaintiff continued to litigate after it clearly became so.”

SB 1300 also expands current law under which an employer can be held responsible for sexual harassment committed by non-employees like clients, vendors and other third parties, if the employer knew or should have known of the conduct and failed to take immediate and appropriate corrective action.

Now employers can be held responsible for all forms of unlawful harassment committed by non-employees, not just sexual harassment.

The law also includes an unusual section on “legislative intent,” which is language that was designed as guidance for the courts but is not legally binding. It includes:

  • Single incident grounds for a claim – The new law declares that a “single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment.”
  • Stray remarks doctrine – Even a single discriminatory remark, even if not made directly in the context of an employment decision or uttered by a non-decision-maker, may be relevant and circumstantial evidence of discrimination.
  • Summary judgments – Harassment claims are “rarely appropriate for summary judgment.” According to the law, summary judgment is a motion usually filed by the defendant to have the case thrown out before trial.

Employers Failing to Report Serious Injuries to OSHA, DOL finds

Workplace Injury

A recent federal government report has urged the Occupational Safety and Health Administration to take steps to ensure that employers report fatalities and injured worker hospitalizations.

Many employers may not be aware, but in 2015 OSHA amended its severe-injury reporting rule to require that employers report the inpatient hospitalization of a single injured employee. Prior to the new rule, they only had to report to OSHA if three or more workers were hospitalized.

Other parts of the rule were left unchanged, including:

  • The requirement that employers report to OSHA workplace fatalities within eight hours.
  • The requirement that employers report any amputations or the loss of an eye within 24 hours.

 

Amputations are defined by OSHA as: “… the traumatic loss of all or part of a limb or other external body part. This would include fingertip amputations with or without bone loss; medical amputations resulting from irreparable damage; and amputations of body parts that have since been reattached.”

Inpatient hospitalization is defined as: “A formal admission to the in-patient service of a hospital or clinic for care or treatment. Treatment in an emergency room only is not reportable.”

Between January 2015 (when the new rule took effect) and April 2017, employers reported 23,282 severe injuries to OSHA in addition to 4,185 workplace fatalities, according to the report by the U.S. Department of Labor’s Office of Inspector General.

OSHA shortcomings

But the report found that OSHA had no assurances that employers reported hospitalizations, amputations and losses of an eye – and that only about half of those injuries were reported.

It also found that the agency was not consistent in citing employers that failed to make the reports in a timely manner.

Overall, the report found that OSHA had not been consistent in monitoring employers that it had authorized to conduct their own investigations into what had caused the incidents.

The report had sampled 100 severe injuries and found that OSHA had made inspections in only 37 of the cases and allowed employers to investigate in 63 of the cases.  But in 50 of the 63 cases that employers were supposed to investigate, the report found that OSHA failed to document its decision to allow employers to perform an investigation.

In about 87% of employer investigations, OSHA lacked justification for its decisions to allow employers to perform an investigation or closed investigations without sufficient evidence that the employers had abated the hazards that caused the accident, according to the report.

Employer takeaway

Safety specialists predict that the report could spur OSHA to take a tougher stance and improve its policing.

The report recommendeds that OSHA develop guidelines and train its staff on how to detect non-reporting of these incidents, and issue citations for late reporting or failure to report.

As an employer, you should be diligent about always following OSHA regulations, and now in particular, by following the rules on reporting serious injuries or fatalities.

If you do have a serious injury as defined above, here’s what you need to know:

 

To make a report:

  • Call the nearest OSHA office;
  • Call the OSHA 24-hour hotline at 800-321-6742; or
  • Report online, at www.osha.gov/pls/ser/serform.html.

Be prepared to supply:

  • The name of your business;
  • Names of employees affected;
  • Location and time of the incident;
  • Brief description of the incident;
  • Contact person and phone number.

NLRB Moves to Restore Joint-Employer Standard

The National Labor Relations Board has issued a proposed rule that would roll back an Obama-era board decision on joint-employer status for companies that hire subcontractors or use staffing or temp agency workers.

The decision by the NLRB in 2015 overturned a long-time precedent (a standard in place since 1984) that a company must have “immediate and direct” control over a worker to be considered a joint employer. The board ruled instead that a company need have only “indirect” control of a worker and not even exercise that control to be considered a joint employer.

Under the 2015 standard, a company could be deemed a joint employer even if its “control” over the essential working conditions of another business’s employees was indirect, limited and routine, or contractually reserved but never exercised.

The ruling was roundly criticized by businesses as it put both the hiring employer and its contractor or staffing agency on the hook for labor violations. The decision also applied to franchisors that were suddenly liable for labor issues at individual franchisees’ operations.

The ruling also spread plenty of confusion in the employer community, and it sent companies that used contract or temp labor to set strict written procedures of where their responsibility ended and the subcontractor’s began.

 

The proposed rule

The proposed rule affects businesses:

  • That are franchisees or franchisors,
  • Use temporary staffing agencies to supply manpower, or
  • Hire outside or subcontractors to work on their sites.

 

Under the proposal, an employer may be found to be a joint employer of another employer’s employees only if it possesses and exercises “substantial, direct and immediate control” over the essential terms and conditions of employment “and has done so in a manner that is not limited and routine,” according to a statement issued by the NLRB.

“Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship,” the statement said.

In announcing the proposed standard, the NLRB included a number of examples of how it would apply. Here are two:

Example 1: Red Line Staffing supplies line workers and first-line supervisors to Sporting Apparel at Sporting Apparel’s manufacturing plant. On-site managers employed by Sporting Apparel regularly complain to Red Line Staffing’s supervisors about defective products coming off the assembly line.
In response to those complaints and to remedy the deficiencies, Red Line Staffing’s supervisors decide to reassign employees and switch the order in which several tasks are performed.
Sporting Apparel has not exercised direct and immediate control over Red Line Staffing’s line workers’ essential terms and conditions of employment.

Example 2: Temp Worker Plus supplies line workers and first-line supervisors to Breadstone Enterprises at Breadstone’s baking plant. Breadstone also employs supervisors on site who regularly require the Temp Worker Plus supervisors to relay detailed supervisory instructions regarding how employees are to perform their work. As required, Temp Worker Plus supervisors relay those instructions to the line workers.
Breadstone possesses and exercises direct and immediate control over Temp Worker Plus’s line workers.
The fact that Breadstone conveys its supervisory commands through Temp Worker Plus’s supervisors rather than directly to Temp Worker Plus’s line workers fails to negate the direct and immediate supervisory control.

The proposed rule is currently up for a 60-day comment period, after which it may be amended following input from stakeholders. For now, you should stick with the contracts you have had since the Obama-era decision until this new rule is set in stone.

 

 

 

Preventing Substance Abuse in the Workplace

Drug and alcohol use by employees on or off the job is a troublesome societal plague that has put many employers on the defensive.

Research by the U.S. Department of Labor shows that between 10% and 20% of the nation’s workers who die on the job test positive for alcohol or other drugs.

The same research shows that industries with the highest rates of drug use are the most physically dangerous and involve the operation of machinery, such as construction, mining, manufacturing and wholesale.

With this in mind, you need to know all of the tools available to you as an employer to ensure that you keep a strong drug- and alcohol-free workplace policy in place, while trying to minimize the effects of employees who are heavy users off the job.

An effective policy can reduce the risk of workplace injuries to an impaired employee as well as co-workers and anybody your company may come in contact with, particularly customers or vendors. The actions of one impaired person, or someone that uses heavily off the job, can have far-reaching effects and turn out to be a significant liability for your company.

Various Occupational Health and Safety Administrations (OSHAs) at both the federal and state level offer employers help in sorting out the complexities of putting together an effective drug- and alcohol-free workplace policy.

Federal OSHA outlines five components it considers necessary for a drug-free workplace: a policy, supervisor training, employee education, employee assistance and drug testing.

Drug testing, it says, “must be reasonable and take into consideration employee rights to privacy.”

The federal agency has guidelines available to help resource-challenged small businesses formulate a policy aimed at a drug- and alcohol-free workplace. They include:

  • Drug-Free Workplace Advisor Program Builder. For employers needing to develop a policy from scratch, this guides them through the various components of a comprehensive written drug-free workplace policy. It then generates a policy based on an employer’s specific needs.
  • Substance Abuse Information Database (SAID). This includes sample drug-free workplace policies, surveys, research reports, training and educational materials and regulatory information.
  • Resource directories. These contain current lists of national, state and local resources, including summaries of state laws on workplace-related substance abuse, community organizations that help make businesses drug-free, and help lines for those who have a drug problem.
  • Training and educational materials. These include presentations, articles, fact sheets and posters to help employers provide workplace drug and alcohol education.
  • Workplace Frequently Asked Questions. These are available free of charge.

 

More detailed information for each of the above guidelines is online at: www.osha.gov/SLTC/substanceabuse/index.html

 

The New Zealand example
One good approach to drug and alcohol policies comes from New Zealand. Its OSHA – in simple, practical language – advises employers in that country to:

  • Formulate rules, agreed to by all parties, which apply the same for everyone: employees, contractors and employers.
  • Write the policy clearly and make it available to all in the workplace.
  • Describe steps needed to ensure a drug- and alcohol-free workplace.
  • Enforce the rules “consistently and fairly.”

 

The policy, says New Zealand OSHA, should aim to avoid worker drug or alcohol impairment without discriminating against or punishing employees.

Once formulated, the agency adds, the policy should be part of the company’s official health and management practices in recruitment and training, integrated into its human resources department and widely circulated throughout the business.

 

Fifteen Warning Signs of Workers’ Comp Fraud

Workers’ compensation fraud costs the insurance industry roughly $5 billion each year, according to estimates by the National Insurance Crime Bureau. And depending on whom you ask, fraud accounts for as much as 10% of the costs of all workers’ comp claims.

This type of fraud is typically associated with malingering employees who fake injuries in order to collect compensation and some paid vacation time.

In tougher economic times, particularly as lay-offs mount, some experts think there is an increased exposure for employees to claim a work-related injury for a variety of manufactured reasons, such as for an injury that occurred on personal time.

Anytime you feel you have a suspicious claim on your hands, look for these tell-tale signs of potentially fraudulent claims. Usually one of these items alone is not enough to point to fraud, but if you have two or more of them, it could suggest a problem.

  1. Late reporting. If you have an employee who suffers a legitimate on-the-job injury, they will generally report it right away. Late reporting may not always be indicative of a fraudulent claim, though, because sometimes the true effects of an injury may not be known until the following day.
  2. The Monday morning claim. If the injury allegedly occurred on Friday, usually late in the day, but did not get reported until Monday, there is reason to suspect there might be a little more going on than meets the eye. The logic is that the employee likely suffered an injury over the weekend and does not want to pay for it themselves if they lack health coverage, or if they don’t want to foot the bill even for their coverage deductible.
  3. Lack of witnesses. Often your employees won’t be working in a solitary environment and there ought to be somebody on your staff who witnessed the accident. Still, not every claim has a witness and this should not be used solely to determine fraud.
  4. Sketchy details or conflicting descriptions. Most claimants can recall the details of their injury. If the claimant seems to be fuzzy on the details and gives vague responses to questions, it could be a warning sign.
    Also, if the employee’s description of the accident conflicts with the medical history or First Report of Injury, there may be a problem. This could arise if, upon further investigation, the employee keeps changing the story and adding or removing pertinent information – a good reason to suspect it to be a fraudulent workers’ compensation claim.
  5. Disgruntled employee. A disgruntled employee is more likely to place fraudulent claims than an employee with high job satisfaction.
  6. Financial hardship at home. Workers’ compensation benefits are sometimes seen as a way out of a tight financial situation at home. Although temporary disability benefits are lower than normal working wages, the worker could use the time to “double dip,” that is, take on extra work when they are supposed to be at home recovering from the alleged injury.
  7. Hard to reach. This ties in with number 6. If this occurs every time the claimant is called, there is a possibility of fraud.
  8. Misses medical appointments. If an employee is truly injured, they want to get better and will make sure to go to all medical appointments. Missing appointments is another reason to suspect fraud.
  9. Engaged in activities not consistent with the injury. If your employee reported a back injury and other employees find that he is playing softball on the weekends or renovating his yard, there is good reason to suspect fraud.
  10. Employment change. The employee reports the injury right before or after being laid off, near the end of a contract job or near the end of seasonal work.
  11. Post-termination claims. If an employee files a claim after being laid off or fired, red flags should pop up.
  12. Frequent moves and changes. The claimant has a history of frequently changing physicians, addresses and places of employment.
  13. History of claims. If the claimant has filed suspicious or litigated claims in the past, they could be a person who feeds off the system.
  14. Employee refuses treatment. There should be no reason that a legitimately injured worker refuses a diagnostic procedure to confirm the nature or extent of an injury.
  15. Rigorous hobby. If the injured worker has a pastime that could cause an injury similar to the alleged work injury, the claim could warrant further investigation.

 

Remember, if you suspect fraud, you should talk to your broker or the insurance company claims representative to alert them. All insurance companies are required to have special investigation units that look into claims fraud. It benefits both you the employer and the insurer if the insurance company investigates and ferrets out a fraudulent claim.

If the insurer suspects fraud, they can reject the claim and report their suspicions to the local district attorney’s office and the Department of Insurance.

Prompt Filing of Commercial Auto Claims Can Stop Problems before They Start

While a driving employee may be flustered after an accident and may not be thinking of reporting the incident immediately, for you, the policyholder, the clock starts ticking the moment the accident has occurred.

To ensure that the claim is dealt with in a timely manner and to prevent a number of unforeseen consequences, the sooner after an accident that you report a claim, the better.

The reason it’s so important to file the auto claim in a timely manner is that there is often a third party involved. If there is a gap between when the accident occurs and your insurer getting involved in the claim, the chances the third party may take legal action increase.

This is especially true in commercial auto accidents, since some people may be more likely to take legal action in the belief that a business has deeper pockets than an individual. And with a third party that is out of the business’s control, there are more uncertainties.

Here are a few reasons why dawdling on filing your commercial auto claim can be detrimental to you:

Better chance the third party takes legal action – Insurance companies know that the longer it takes them to contact the third party and/or their insurer, the more likely they will secure the services of a lawyer and sue your organization. Prompt response puts the other party more at ease and makes them confident the claim will be handled in a timely manner that makes them whole again.

Claims costs can increase – As time ticks on filing the claim, related costs (potentially for your firm and the third party) are likely to rise, including:

  • Repair costs
  • Car rental costs
  • Down time for the vehicle
  • Storage costs, and more.

 

More time spent dealing with tasks following the accident – If you delay in filing the claim, you will have to take on some of the administrative work that the claims adjuster would normally handle. Claims adjusters have at their disposal resources you may not have access to, such as specialist repair and recovery services.

Reduced chances of a good result – Claims adjusters are trained in assessing your liability after an accident, and are also trained in detecting fraud by the other party. The more that time passes after the accident, the harder it will be for the claims adjuster to detect any fraudulent activity on the part of the third party.

Reputation and brand vulnerability – These days, many people take their grievances to social media. If a member of the public feels slighted by your firm or that your company mistreated them in some way, they may vent about you on Facebook or Twitter or other social media platforms.

If, however, you file that claim quickly and the claims adjuster reaches out to them, the chances that the other party feels victimized will greatly diminish. Also, claims adjusters are adept at working with third parties and know how to relieve their stress about the accident.

Getting claims reported on time

As you can see from the above, it’s imperative that your insurer knows about the accident as soon as possible so they can assign a claims adjuster to step in. Zurich insurance recommends the following to make sure that happens:

  • Assess your internal reporting procedures for auto incidents. A lengthy internal “chain of command” slows down reporting to your broker and insurer.
  • Regardless of who is at fault, report it to your broker or carrier immediately.
  • Discourage your employees from trying to resolve the claim directly with the third party or that person’s insurance company.
  • Include incident reporting as part of your fleet safety training program. Make sure employees know to report accidents regardless of fault.
  • Never assume a claim will “just go away.”

 

The bottom line is you can trust us, your insurer and their claims adjuster to handle the claim expediently and professionally. Leaving it in the claims adjuster’s hands will ensure the claim is investigated and that all claims are paid fairly.