For those of us who are unbelievers, that hold the attitude that it will never happen to us, here are some claim examples that we can turn to in order to demonstrate that errors and omissions liability insurance (a.k.a professional liability insurance) is not only relevant in our lives but sorely needed!

Example 1:

An auctioneer was hired to auction off a large estate containing several unique pieces. When the auction failed to bring what the heirs of the estate had hoped for, they sued the auctioneer claiming that he had  inadequately advertised the auction by not listing some of the key pieces in promotional brochures for the auction. Compensatory damages would be covered on an errors and omissions insurance policy

Example 2:

A management consultant for a trade association provided services that included event management related to an international seminar hosted by the trade association. During the course of the event preparation, errors were made in the advertising documentation sent to the participants relating to the scheduling and the topics to be addressed by the seminar’s speakers. Consequently, all the advertising documentation had to be reprinted and resent, which generated substantial additional costs. The trade association sought to hold the management consultant liability for the errors and commenced a lawsuit for damages consisting of the cost of reprinting the advertising documents

Professional errors and omissions is a real risk for anyone performing a specialized service. Whether you have ever had a claim in the past or not, the future will be full of litigation as more and more people are aware of their rights and seek compensatory damages for errors. Errors and Omission liability insurance forms part of your defense against such claims.

Karate Kid can sue

A recent decision by the British Columbia Supreme Court states that parents do not have the right to waive their child’s right to sue by signing a release on the child’s behalf.

Victor Wong was 12 years old when his mother enrolled him and his two brothers at Lok’s Martial Arts Centre in Richmond, B.C. A requirement for enrolment was that the boys’ mother sign the “conditions of membership and release” form. She claims that she did not read it carefully or fully understand it, but she knew that if she did not sign it, her sons would not be allowed to enrol.

Wong, now 20, alleges that during a sparring match at the Centre, he was violently thrown to the floor, fracturing his arm and leaving him partially disabled. He is now suing the school, the sparring partner and the school owner, Michael Lok.

The defense argued that the claim should be dismissed because Wong’s mother signed the waiver when he started. Wong said that he did not sign a waiver of his legal rights and did not authorize his mother to waive any rights on his behalf.

The major significance of this case is that no prior case has ever properly addressed the issue of whether a parent can effectively execute a pre-tort release on behalf of a minor.

The Court found that Section 40 of the infant’s act allows parents and legal guardians the right to sign waivers for such things as consent to health care and school trips and it doesn’t permit a parent or guardian to bind an infant to an agreement waiving their rights to sue…

This is big for your business insurance policy as a client could sue and the settlement could be huge (considering the courts are awarding bigger and bigger settlements all the time – the latest was $18 million) . How does that  $2,000,000 business liability limit sound now?

The Ontario Court of Appeal has upheld a $17-million award—the largest personal injury award in Canadian history—to a young man who was seriously injured in an automobile accident in June 2000.

Rob Marcoccia, 20, was driving straight through an intersection on the red light when he collided with an oncoming furniture truck making a left turn. Marcoccia suffered serious and permanent injuries, including profound brain damage, and will require 24-hour care for the remainder of his life.

The lower court decided that the truck driver was 61-per-cent at fault because he was making the left turn and Marcoccia was 39-per-cent to blame because he sped up instead of stopping when he saw the amber light.

The defendant’s truck was insured for relatively low limits, and the primary insurer settled for policy limits and partial indemnity costs, about $1.25 million in all. The furniture company had already agreed to pay $1 million. The remainder of the 61 per cent was to be paid by Ford Credit, the owner/lessor of the truck.

Ford Credit argued that it was “perverse” for the jury to find the driver of the truck at fault and to award so much for Marcoccia’s future care. At the time, Ontario’s “joint and several liability” doctrine made the leasing company jointly liable with the driver, so the majority of this award fell to Ford Credit. Ontario and several other provinces have since introduced a damages cap to insulate vehicle lessors from deep-pocket exposures like this.

It is likely that this case will find its way to the Supreme Court of Canada.

You can read this verdict in its entirety at http://www.ontario courts.on.ca/decisions/2009/april/ 2009ONCA0317.htm.

Work out at work:

Did you know that more than 15 million Canadians spend half of their waking hours at work and a full 51% participate in no physical activities in their leisure time?

According the Canadian Fitness and Lifestyle Research Institute, 63% of Canadians are not active enough to achieve health benefits, which leaves them at risk for heart and other diseases, disability and premature death. Now that many of us sit for long periods of time either commuting to and from work or while at work, it’s time to get up and use the time you spend at work to get moving.

The benefits to being physically active at work are not only good for you, but also your co-workers. According to Health Canada employers that have instituted or supported workplace activity programs have noticed improved morale, a sense of well-being, higher energy levels and improved team building among  their employees. Talk to your supervisor about these benefits. Health Canada recommends adults be active 30  to 60 minutes a day, most days of the week. No need to do it all at once.  Just try to be active in small increments throughout your day.

Here are 13 ways to get active during your work day, even if you only have 5, 10 or 30 minutes.

Got 5 minutes?

* During breaks, use the bathroom on another floor or one that’s farther away.

* Get up and get water from the cooler or kitchen in another department.

Got 10 minutes?

* If your company has space available, or in your office with the door closed, do a quick routine, alternating between marching, heel presses, jumping jacks and side touches.

* Go to the coffee shop next door or across the street for a break instead of heading to your workplace lounge.

* Try doing stretches at your workstation.  It’s a great stress reliever.

* Book a walking meeting with a co-worker.

* Create a strength routine at your workstation. During your lunch hour, warm up by marching in place, then do squats, lunges and push-ups, using your desk or the wall to make your body strong.

* Offer to run extra errands on your breaks to burn more calories than you would sitting at your desk.

Got 30 minutes?

* Over lunch, try a “walk-run,” alternating 2 minutes of walking with 2 minutes of running.

* Enlist 10 or more co-workers, book a meeting room, and hire a yoga or tai chi instructor.

* Recruit walking club members at lunchtime and walk a different route every day.

* Volunteer for field projects that get you out of the office altogether and require you to move more.

* Sign up at a gym near your workplace for lunch-hour aerobics, treadmill, stationary bicycle or elliptical workout.

For more workplace health ideas, go to Canadian Centre for Occupational Health website.

Before starting any activity program, be sure to talk to your doctor or other healthcare professional.

This physical activity column was written by a certified personal trainer and fitness instructor and reviewed by Foundation experts.

Posted: October 1, 2009 http://www.heartandstroke.com

Workers compensation programs are designed to provide employees who have been injured or disabled with compensation for injuries that occur while they were performing work related duties and tasks. The benefits available to those who have been injured include coverage for medical bills, vocational rehabilitation in the event that it is necessary, and survivor benefits to the families in the event that they are suffering because of the death of the main income provider.

Where an injury that has occurred will prevent an employee from ever returning to active employment in the same capacity as previously, workers compensation has an answer for that too. In these cases, workers’ compensation is meant to ease the reward process and prevent lawsuits, getting an employee back on his or her financial feet sooner.

Problems come up with workers’ compensation when dealing with the types of disability that exist. This basically means that it must be sorted out whether an injury is permanent or temporary for starters and then total or partial on top of that.

In permanent disability cases, it may be more difficult to convince the workers’ compensation insurer to pay out a settlement of sorts that will ensure that the now disabled worker will still be able to survive financially.

Permanent disabilities may arise in workers compensation situations when the employee suffers any kind of injury. Depending on the type of employment, the injuries that will result in permanent disability vary. Some examples are:

- Neck and back injuries
- Heart problem
- A decrease in vision
- Diminished hearing capacity
- Amputations

While these situations are all likely to create a permanent disability, they are not the only times permanent disability may arise. It is important to remember that the laws concerning workers’ compensation coverage as well as the criteria regarding payments for injuries vary from state to state. Some states are much more worker friendly than are others.

The laws also vary from state to state as to how an injury is classified. Some states have provisions that allow an injury to be classified as a temporary disability leading to or becoming permanent. Another classification of permanent disabilities is the “partial permanent disability.” Partial permanent disabilities are disabilities that limit the worker in his or her original job capacity but still allow the worker to perform some job functions.

I often encounter contractors and manufacturers that ask me about bonding and how it works. They are often taken aback when they find out how long

it takes to set up the facility and how involved it really is. I wrote an article a while about the technical

process of applying for a bond, but i don’t think I approached the personal side of bonding and what it means to a business.

Applying for a bond in a detail rich process. I have written about the first step in becoming bonded – establishing a facility. This is the step where the insurance company determines whether or not they want to back your company up in your attempt  do land the bid and/or any future bids.

The insurance company wants to know all about the company, its finances, its projects, its capacity to handle the work, its capacity to finance the project, the capacity of the owners to remain solvent and whether or not the company can get credit (in the form of a bank letter)

You see, in order to stand behind you and bond you to a project, the insurance company need to ensure that you and your company can handle the work. Can you handle the extra capacity or the extra workers? Can you handle the extra expense?

Let’s take an example of a $2,000,000 dollar contract that requires a 50% labour and materials over a 2 year period. They are asking to guarantee $500,000 per year (not so bad right)?  The risk will change from company to company – some companies only have $500,000 in sales in a year – this will result in the company moving 100% over its capacity whereas a company with $1,000,000 in sales will only need 50% more capacity.

When your company becomes bonded, it opens up a new world of clients and contracts. The companies that award contracts will see you as a contender, the insured limits from the insurance company will allow you to manage your company and to know how much you can truly handle and you will eventually start making allot more money.

Another ’sign’ of a stroke is this: Ask the person to ’stick’ out his tongue.. If the tongue is ‘crooked’, if it goes to one side or the other, that  is also an indication of a stroke.

I wanted to pass this information along because it is important for people to be informed. Critical illness insurance pays the insured for various dread diseases but most coverage out there will cover the “big 3″ i.e. Cancer, Heart Attack, Stroke.

How many times do we wake up to hear of another person, suddenly hospitalized with a dread disease, to fight courageously and pass? We know its happening more and more often. We live in a world filled with toxins.

I was recently shown a video from the far east of a child smoking a cigarette (i believe he was 2 years old). I was appalled that a parent would do that.

The diseases are real. It is a numbers game. We can fight them – but unfortunately it takes money. You may not be able to afford the best version of the coverage – that’s okay! Get what you can – for yourself, for your key people, for your kids.

The main issue centers around the concept of “Tied selling”. It is illegal in Ontario to sell insurance by either implying or forcing the product for fear of losing another. HUH? Basically this – we as professionals can’t tell you that your mandatory auto insurance policy won’t be placed unless your buy life insurance as well. In the case of the banks, the law is put into place to protect the consumer from feeling as if they have to take the bank’s insurance product for fear of losing their mortgage or loan.

Another issue centers on customer base and marketing to those customers. The banks have a much bigger potential client base than most insurance brokers. These people are walking in and out of the doors every day – the potential for business is staggering. Ontario law has decreed that banks can sell insurance products but they cannot do so from the physical bank property – they have to sell the product in a physically different location (although you will likely find banks and their insurance companies operating side by side, separated by glass walls).

The various insurance broker lobbies are constantly attacking, looking for violations of the rules and bringing them to light – It is a good idea to keep the banks in check but I firmly believe that we as brokers should do more.

The Insurance Broker’s Association of Ontario has launched the website: www.myinsuranceshopper.ca – a site that consumers can use to quote insurance and find a broker nearby. It is a site structured similarly to the hot-line sites and it actually competes with Insurance Help Canada, sort of

The problem that I see is that they (IBAO) are attacking the banks under the guise of another broker. Whenever I see the ads for their site, they appear to me as a broker who has big money and can advertise like the banks.

Their logo is quite correct – my best insurance is a broker. We have the lower loss ratios (less of our clients have claims that our competitors).

I think this should go further – as brokers we should go on the offensive. We have something that the banks will never have: knowledgeable, talented entrepreneurs who use experience and training to get the right product for our clients. We go for additional regulation (i figure we are highly regulated anyway, what’s a little more?)

We should lobby for additional licences – I think that business insurance should only be sold by a licensed expert – even though many small businesses fit into a package, they will grow into bigger businesses and just because you are a licensed insurance professional, doesn’t mean that you can handle that account. I know of a direct writer agent who knows nothing about business insurance – but he sells it anyway! He has an underwriter come out with him to assess the risk. How ridiculous it that!

Here is the main issue for consumers – do you want the ability to make your own choice? We are bombarded with ads for home and auto insurance. Great, everyone wants a piece of the pie while you have a good record – what happens when you have an awful year: You get a couple of tickets and then get hit in a parking lot – you become a residual risk driver. Companies that sell their own product just kick you off – they have no interest in writing your business now. Brokers – you make get kicked off the current insurance company’s plan, but we can find you an alternative that may even include the discounts that you currently enjoy (multi-vehicle & multi-line)

For businesses – do you really want your business’s risk management handled by an entry-level employee, sitting in a cubical who really doesn’t give a damn about you?

The power is in your hands – take a stand, stand up for your right to have the best – the prices are comparible anyway! You work hard and deserve the best.

The right insurance is provided by a broker because that is what we do.

I have a client (who will remain anonymous) who recently purchased business liability insurance and professional liability insurance through me because the contract that he has with a US company required him to have the coverage (since no one in Canada asked for the coverage, he felt he didn’t need it). One stipulation of the contract is that he carried worker’s compensation or a product of similar design. 

A long term disability plan is similar if not superior to the worker’s compensation plan and after a few quotes, he submitted an application – again, because it was required of him.

in my follow up communication with him, I tried to collect some data that was incomplete but i never received any answers to my questions. It was a little frustrating to say the least.

After a few weeks, i received a call from my client. he apologized for being out of touch and explained that he had undergone emergency surgery for a problem that we disclosed on the application and as a result of that surgery, it was discovered that a tumor was inadvertently removed from his body – He was diagnosed with cancer. 

His contract with the US firm was cancelled because they required him to physically work at the plant, he has to undergo Chemotherapy and is currently not working.

I mentioned in our conversations that the disability policy was not enough – while it does afford some critical illness coverage, it is not a replacement for that coverage. He didn’t feel it necessary to get the coverage – and I can’t blame him for his decision. It is very difficult to come to terms with our own mortality – our consciousness can’t bear it. 

Think about this:

You insure your home for fire: Odds of a fire taking it all away – 1 in 18000  (ish)

You insure your car (mandatory, yes): odds of an accident – 1 in 1800 (ish)

Do you insure your life / mortgage: odds of death (for anyone up to 60) – 1 in 100 (ish)

Do you insure your health? Cancer, stroke heart attack – 1 in 3. (you don’ t want me to say ish) 

Why would you not get critical illness? Who is going to pay your bills? Who is going to pay for your medication?  Quoting Canadian Medical Association Journal, Vol 137, Issue 10 903-906:

“The cost of chemotherapeutic agents administered on an outpatient basis over 4 to 6 months in established drug protocols ranged from $260 to $5374 (mean $2224)”

How are you going to pay for this – by draining your RRSP’s? You can fight the disease – critical illness insurance is paycheck insurance – keeps money in the pot for you to not worry about anything other than recovery.