If you own a restaurant, chances are that at least some of your employees are offered some employee benefits by your company.  These can be in the form of retirement accounts, health insurance, life insurance or even disability insurance.  Your management of these benefits for your employees carries some risks for you.  If you make a clerical error, or if you give bad advice to an employee, your company could face a lawsuit and the resulting defense costs.  It’s clear you need some protection, but what it the correct form of protection for you?

This article discusses two different types of protection for employers in the area of employee benefits administration.  They are employee benefits liability insurance and fiduciary liability insurance.  Let’s take a look at each one separately.

Employee benefits liability insurance can often be found as an add on endorsement on your restaurant  business owners insurance policy.  The coverage limit will often be the same as the liability limit on your business owners policy.  This coverage is generally geared toward protecting your restaurant from losses caused by administrative mistakes in the handling of the employee benefits.  A good example would be a new manager who joins your team and you forget to add him to the health insurance policy.  Several months later he falls ill and the health claim is not covered since this person was never added to the policy.  Employee benefits liability can protect your restaurant from having to pay that loss out of your pocket.

Fiduciary liability insurance is designed for a different purpose.   This insurance coverage form is for claims arising out of wrongful acts.  The wrongful acts are negligent acts, errors, or omissions that result in an actual or an alleged breach of your fiduciary duties as imposed by ERISA in the administration of employee benefits.   Some examples of this type of mistake would be giving bad investment advice about which investment choices an employee should use when investing 401k funds.  You could even be held liable for your choice of the plan or the plan administrator for your restaurant’s 401k plan itself. 

So which choice is right for you and your restaurant company?  Generally speaking the fiduciary liability insurance is best suited for restaurants that provide a retirement plan of some sort for their employees.  And if you provide any other type of employee benefits, then employee benefits liability insurance is an important choice.  Some restaurants may need both forms of protection while others may only need one or the other.  The important point is to understand clearly the difference in terms of what triggers the protection and then to decide what is best for your particular restaurant.

If we can help you with any of your restaurant insurance questions or needs, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

Workers compensation insurance is an experience rated policy.  This means that your loss experience, both the frequency and the severity of your losses make up a big part of the premiums that you pay for your workers compensation insurance.  The restaurant owners who understand this take care to create a working environment for their employees that will reduce the chances of an accident or injury to an employee.  Despite these precautions, accidents still do occur.  Once the workers compensation claim has been filed, many of the ways to keep the costs low are out of the restaurant owners hands.  This is why the insurance company that you choose for your workers compensation insurance is so very important.  Let’s take a look at some of the cost containment areas that some of the more specialized workers compensation insurance companies implement to keep claims costs lower and thus, keep your restaurant insurance costs lower.

What is in a bill?  Well, when it comes to medical billing, often times there are errors in these bills.  These errors can be in the coding, the allowances, or even in the diagnoses and treatment of an injury.  You want to be sure that you select a workers compensation insurance company that has a cost containment strategy that involves careful review of all medical bills associated with your employees’ workers compensation claims.   The most basic of these containment strategies involves having all medical bills reviewed and checked for duplicate billings.  Yeah, double billing is more common than you might think.  Next each bill should have PPO discounts provided and the fee schedules must be reviewed for accuracy. 

Beyond the basic bill review there are a few steps that only the most elite workers compensation companies will take to contain costs.  Does your workers compensation insurance company integrate these steps into their claims process?

Each medical bill should be reviewed for the proper use of coding modifiers.  There are many codes that are catch all codes and you want an insurance company standing behind you that checks all of these codes very carefully.  For more information on how some of these catch all codes can drive up your workers compensation costs, read my blog on that topic here.

You want your workers comp insurance company to have a standardized procedure for comparing diagnosis versus relatedness of the treatment to the medical records.  Errors are made here that can cost you a lot of money on your experience modification factor later on.  In addition, you want your insurance company to be conducting a utilization review to determine the appropriateness of treatment and prescription use.  Last of all, make sure that your work comp company is applying national guidelines to medicare, NCCI and ODG edits.

It’s clear that the workers compensation insurance company that you choose today could have a tremendous influence on the rates that you will pay in the years to come.  Be careful and don’t just go for the lowest rate today; rather select an insurance company with the expertise and know how to keep your claims costs low and protect your mod for the future.

At Clinard Insurance Group, we insure hundreds of restaurant all across North and South Carolina.  Our workers compensation companies have careful cost containment programs in place and can help you keep your restaurant insurance rates low now and in the future.  If you need any help with your restaurant insurance, please give us a call today, toll free, at 877-687-7757 or visit us on the web at www.TheRestaurantInsuranceStore.com. 

There currently are two very strong demographic shifts that are beginning to impact workers compensation claims and as such will soon begin to have a driving influence on workers compensation rates.  They are the aging of the workforce and the increased obesity of the workforce.  The former of these changing demographics has some upside and the latter has only downside.  You need to understand just how these changes will affect your restaurant insurance program.

Let’s look at the aging of our workforce first.  As I mentioned, this change does have some hidden positives.  More people need to work later in life for financial reasons and it is estimated that in 2013 24% of the workforce will be age 55 or older.  What does that mean for you and your workers compensation rates?  Well, on the upside, older workers are injured less often.  This is because they are more experienced and tend to avoid injury causing activities.  The downside is that, when injured, an older employee takes longer to recover enough to work again.  What this means for you is that you are more likely to experience higher claim frequency with your younger workers and higher severity rates with your older workers.  The new workers compensation experience modification formula will tend to favor the younger workers as it will begin to include larger and larger losses in the frequency side of the equation.  For more information on how the new formula works, visit my blog here.

There are some interesting studies that indicate that older workers can be returned to work more quickly with better use of drugs that treat things other than the injury, such as diabetes, high blood pressure and high cholesterol.  Traditionally, workers compensation would not pay for these medications but now there are indications that these conditions slow the older worker’s recovery time and perhaps should be part of the workers compensation solution.

The other changing demographic that employers face when hiring is that of obesity.  Unfortunately, unlike the aging workforce, this demographic has no upside at all.  The obesity problem is growing at an alarming rate.  In 2001, no state had an obesity prevalence of more than 30%.  In 2010, there were 10 states with more than 30% of their citizens considered to be obese.  As you can imagine, obese workers who are injured take much longer to heal and return to the workforce.  They frequently have other medical issues such as diabetes, high blood pressure and high cholesterol to combat along with their workplace injury.

What can a restaurant owner do to help keep workers compensation costs low?  The best advice out there seems to be that you should begin to take an active role in the wellness of your employees.  Find ways to support their efforts to exercise more and to eat a more healthy diet.  Make sure that the exercise programs that you support make sense for the people engaging in them.  Obese people will put more pressure on their joints and need to take care in choosing a safe exercise in the beginning. 

Lastly, you should take a hard look at your restaurant workers compensation insurance carrier.  Do they have the claims support to protect your interests after a claim?  Will they assign nurses and case workers to the claim in order to help get your employee healed and back to work sooner?  What is their position on the drugs to deal with ancillary conditions such as diabetes and high blood pressure that may slow healing?

At Clinard Insurance Group, we are a niche player in the restaurant insurance market.  We understand restaurant insurance and we speak your language.   I have owned 4 restaurants myself and I know where you are coming from on these issues.  If you would like help with your restaurant insurance program or just need help with your workers compensation issues, please give me a call, toll free, at 877-687-7557 or visit me on the web at www.TheRestaurantInsuranceStore.com.

In the restaurant business, employee turnover can come at you like a tidal wave in the darkness.  Sometimes you are blessed with calm waters and then before you know it, your life is being turned upside down by change as you find yourself struggling to find good help to keep your doors open.  It is in the midst of these turnover crises that a restaurant owner can find himself taking steps that might lead to huge costs down the road.

There are more and more sophisticated loafers out there.  In my last blog I even outlined a scam where new employees who plan to lay out of work, report you to the health department as soon as you give them a warning for being late or not showing up to work.  Later, when you fire this person, he or she will contact an attorney and claim the firing was in retaliation for their report to the health department.  This is just one of many scams out there that can prey on your pocketbook.  Other tactics include seeking job protection under the Family Medical Leave Act, and the Americans with Disabilities Act.  Any conflict that you get drawn into with one of these scammers could cost you thousands of dollars of retention fees and attorney fees, assuming you have adequate EPL Insurance and a good workers compensation policy.  Without them, you could face hundreds of thousands of dollars in costs.

But there is a better way.  You have the one chance before you hire a person to find the good eggs and screen out the undesirables.  But you must have a plan designed to do so.  You must have a plan with specific steps and triggers that will keep you from making an emotional or a rushed decision.  Here are some ideas that may help you put into place a plan that will better protect you from the employment scams out there that so many restaurant owners fall prey to.

Start by creating a meaningful job description.  There are many places on the web that can help you do this in a step by step fashion at no charge.  Be sure that your job description not only describes the type of work that you expect your new employee to perform, but be specific about rules describing behavior, tardiness and other areas where a new employee might fail to perform and need to be let go.

Conduct a thorough interview.  You want to be sure that you don’t base your hiring decision on personal feelings or the initial impression that you have with your candidate.   Ask them if they ever felt that they were mistreated in a job situation.  If they answer in the affirmative, keep asking why until you have a clear understanding of how your job prospect feels about this issue.  Ask this same question to any references that you speak with.  This can be the leading indicator for revealing a scammer type personality.

Create some skills tests that will tell you if this person can do the work that he or she says she can.  If you are hiring a person with no experience, then develop a skills test for that scenario that will help you understand if this person is a quick learner or a slow learner.

Make a character assessment.  You will need to develop some open ended questions that will give you insight into each candidate’s basic character traits.  In addition, you should find some services that will help you conduct a background check on anyone who gets far enough in the interview process that you are considering hiring them.

If you require a pre-hire physical examination that includes a drug test, then you may be able to avoid costly future claims that you would miss without this type of screening.  Don’t try to do this yourself, hire medical professionals so that you don’t become involved in any actions regarding the physical and the drug testing.

It’s clear that hiring employees is an area where many restaurant owners get into trouble.  Taking the time to understand the risks and make a definitive plan that you follow without exception should help to mitigate the risks associated with a new hire.

Clinard Insurance Group, located in Winston Salem, NC is a niche player in the restaurant insurance game.  We insure hundreds of restaurants all across North Carolina and South Carolina.  If you need help with your restaurant insurance, or if you just have questions about restaurant insurance that you would like answered, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantStore.com.