New Year-Is it possible to be too thin?

by Gretchen Houghton

Resolutions.  Every year it seems there is a huge surge of people that hit the gym to work off the holiday goodies they have been eating as well as everything else the year has added to their waistlines. While there are major health advantages to losing a few pounds, are there areas where it is possible to be too thin?

Yes.  It is possible to be too slim with your company’s insurance coverage.  As litigation increases from year to year and insurers try to cuts costs, more and more policies become too thin and exclude (or simply omit) many different types of coverage.  A simple property exclusion could end in a bad result for a company should there be any damage, and a management liability exclusion could result in personal liability to the individual, creating substantial damage to personal wealth. 

As you plan for the new year and a new budget, it is vital that you take into consideration your insurance coverage and costs. There are a great number of policies out there that do not get reviewed annually and therefore are not keeping up with current legislation and/or price competition in the market.  Some renewals contain exclusions that may not have been in the prior policy.  Many renewals happen without revisions or competitive quotes; they are simply automatic – which could be troublesome if left unchecked. 

It is possible to slim down too much with your insurance policies.  Like our waistlines, we need to keep a close eye on them.  Check with your broker or agent to make sure your coverage isn’t too thin and leaving you cold.

Definition of a “Subcontractor” – Know Who You’re Hiring

How do you define “independent contractor”? Misclassification of employees is a critical issue for workers and businesses. Because the potential penalties for noncompliance are so severe, we thought it beneficial to remind you of the amended definition of who is an independent contractor. In this post, we will tackle the Massachusetts Law. The MA Independent Contractor Law Amendment of July 2004 is designed to help employers distinguish employees from independent contractors using a clear, rigid 3-point test.

1. The worker must do their work independently and be self-sufficient. They must complete the job using their own approach without instruction and determine the hours they will work on the job. For Workers Compensation, if you provide materials they do not meet this test.

2. If the worker does the same work you normally do, the worker is not an independent contractor. A good example of this would be a company that specializes in window and door installation, if the worker installs windows and doors, under these tests, they cannot be classified as an independent contractor.

3. The public must see the person providing the labor as an independent business.

These 3 factors are not flexible and the law states that if all 3 are not met the worker is deemed an employee for MA workers compensation and wage laws. If a violation has been committed the employer can face substantial civil and criminal penalties. The maximum penalties carry a potential fine of $50,000 per civil violation and criminal violations could result in prison time as well as criminal fines.

For more information, please see An Advisory from the Attorney General.

New Hampshire’s definition of a subcontractor is also far more restrictive than the Federal government. In our next post we’ll look at the state’s 12-prong test for determining what classifies as an independent contractor.

Have you run into issues with subs being misclassified? We’d be interested to hear them. How did things turn out?

Regardless of where you live, knowing and understanding the state law and its definition of “subcontractor” is key to protecting yourself, and making sure you don’t get hit big at audit time. While it may be tempting to treat all your help as subs rather than employees, unless they truly are independent contractors, it’s just not worth the risk.

“Keep Your Eyes on the Road and Your Hands Upon the Wheel” – Dangers of Distracted Driving

The trivia question on our facebook page this week dealt with driving and cell phone use. It sparked some passionate opinions, and I thought it appropriate to take a deeper look at this issue of distracted driving here on the blog.

Let’s start with some research findings.

The #1 source of driver inattention is use of a wireless device (Virginia Tech).

Drivers that use cell phones are four times as likely to get into crashes serious enough to injure themselves (Insurance Institute for Highway Safety).

Texting while driving extends a driver’s reaction as much as having a Blood Alcohol Content level of .08% – the legal limit (University of Utah).

The National Safety Council has estimated cell phone use while driving to cause:

  • 636,000 crashes
  • 330,000 injuries
  • 12,000 major injuries
  • 2,600 deaths
  • $43 billion in damages

Carnegie Mellon reports that using a cell phone while driving reduces the amount of brain activity associated with driving by 37%. The statistics speak for themselves, cell phone use while driving is not just distracting, it’s dangerous. Even so, 7 out of 10 drivers admit to text messaging while driving. That means it’s more likely than not that you’re among them.

 

Texting while driving is illegal in both Massachusetts and New Hampshire, and while studies show that the ban has had an effect on driving habits, many continue to ignore the statistics (and law), and use their cell phones while navigating the road.

 

Legislation can have an impact, but it really all comes down to personal responsibility. You and I need to take an honest look at our own habits, and make some changes, if necessary. Keeping our eyes off the cell and on the road is a good start, but there are other things we can do to limit distracted driving as well. Program the GPS before getting behind the wheel. Designate a DJ to play with the radio. Make time to stop for lunch, rather than juggling sandwich and steering wheel.

What really drives it home for me is having a daughter who began Driver Education last week. They can give her all the statistics and warnings about the dangers of distracted driving (and they will), but I know that what she sees in me will leave a deeper impression than any PowerPoint presentation she sits through. I need to own that responsibility. Because not only does my life depend on it… hers is riding on it as well. Now that’ll teach.

Insuring Your Teen Driver Doesn’t Have to Break the Bank

If your teen is getting ready to put their hands on the wheel, it’s time to think seriously about insurance options – a dreadful thought for many parents, but with a little research and careful planning, you may be able to obtain affordable insurance for your teen. Here are some tips to control the cost of your teen’s Auto insurance.

Proper Driver Training. Many insurance companies offer discounts to those who have completed a driver’s education course successfully, so be sure to mention this to your agent.

Does Your Teen Make the Grade? Teens who demonstrate responsibility and carefulness in school are more likely to do the same behind the wheel of an automobile. Some insurers offer discounts to students who keep their grades up.

Choose Cars Wisely. Teens and fast cars– these words shouldn’t be used in the same sentence if you’re shopping for Auto insurance. Insurance companies know teens are especially vulnerable to temptation when it comes to showing off their new car and testing how fast it will go. Insurance rates reflect that knowledge. Opting for a sedan or family-style car with all the safety features possible will help to control your costs. A bonus with safety features is your insurance company will offer more attractive pricing when options like anti-lock brakes, air bags and added frame support are present .

Opt for an Add-On to Your Policy. When your teen first starts driving, consider adding them to your current insurance policy. Many carriers will not write a policy for anyone under the age of 18, but if you find one that will it’s going to be very expensive. Keeping your teen on your policy is another step in controlling costs.

Ask Your Agent To Compare. In looking for Auto insurance coverage for your teen, you’ll be surprised at the differences among companies. Every company varies in what it considers to be a “high risk” driver. Also, compare each company’s discounts for teen drivers. Some may offer more discount opportunities than others. An experienced insurance agent can help you determine which company is the best fit for you.

Having a teen driver creates awareness about road safety and Auto insurance like nothing else. An independent agent can assist you in achieving the delicate balance between price and protection. Insuring your teen driver doesn’t have to break the bank.

Don’t Forget Your Carbon Monoxide Alarms


More than 400 people are killed each year in the United States from carbon monoxide poisoning, according to the Centers for Disease Control and Prevention (CDC). The American Medical Association reports that carbon monoxide poisoning is the leading cause of accidental poisoning deaths in the United States.

Other CDC studies indicate that more than 20,000 people are hospitalized each year from this gas, and these poisonings are on the rise due in part to economic reasons. With a stressed economy and high unemployment, more families face utility shutoffs. As a result, they employ other sources of heat, such as kerosene heaters, gas generators, and improperly maintained wood stoves and fireplaces. Such heat sources carry a heavy risk of carbon monoxide poisoning.

Carbon monoxide alarms are essential protective devices in homes with gas appliances, gas heaters, and fireplaces. Here are some tips to consider concerning these important alarms.

To ensure a high-quality alarm, look for the Underwriters Laboratories certificate on any detector you purchase.

Connect these alarms to the smoke alarm system so that any alarm in the house becomes activated if a problem arises.

Periodically test these devices according to the manufacturer’s instructions. Batteries should be replaced at least once per year. Replacement of the alarm itself is often necessary after a few years since the average life span of carbon monoxide alarms is relatively short.

Verify that you have alarms in bedrooms and other locations where people may sleep since people who are sleeping can die from carbon monoxide poisoning without experiencing any symptoms.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Planning a Party? Check out these Social Liability Tips

Christmas is just around the corner and with it a beautiful array of holiday parties. In case you’ll be hosting one of them, we’d like to give you some tips for limiting your exposure. Social host liability, the legal term for the criminal and civil responsibility of a person who furnishes liquor to a guest, can have a serious impact on party throwers, according to the Insurance Information Institute. Should one of your guests be injured (or cause injury to others) on the drive home, you could be held responsible. With a little common sense and some risk management know-how, your can protect your guests, AND your own interests.

Most homeowners policies provide coverage for liquor liability, so long as you’re not selling the alcohol. Still, before hosting that Christmas celebration, check with your agent to be sure you’re aware of any exclusions, conditions or limitations that might affect your responsibility. Your liquor liability limits will follow the policy limits (usually from $100,000 – $300,000), but depending on your situation, that may or may not be enough to sufficiently handle your risk. If you host parties frequently, you would be wise to consider a personal umbrella liability policy. It can provide an additional $1m in additional coverage, for as little as $125 annually.

Regardless of the insurance you carry, here are some tips to further limit your liability:

  1. Consider venues for the party other than your home. By holding your gathering at a restaurant, the responsibility for liquor liability falls to the establishment, minimizing your risk.
  2. Hire a professional bartender. They are trained to recognize signs of intoxication, and also better able to limit the consumption of your guests.
  3. Offer non-alcoholic alternatives, and always serve food as well.
  4. Limit the guest list to those you know.
  5. Limit your own alcohol intake so that you are in a better position to be a responsible host.
  6. Arrange for safe transportation (or offer a sofa) for partygoers. Do not under any circumstances allow your guests to get behind the wheel of a car if they are intoxicated.

Although most risks cannot be eliminated entirely, with a little planning and care, you can host the party of the season, and actually enjoy it yourself, knowing that both you and your guests are better protected. If you have further questions about social liability, feel free to give us a call at (800) 298-0802. We’ll be happy to speak with you! Have a safe and happy holiday season!

New Rule on Commercial Vehicles and Cell Phone Use – Top FAQ

Prompted by a deadly crash in Kentucky last year which killed 11, the Federal Motor Carrier Safety Administration recently adopted a new rule which bans the use of hand-held cell phones while driving commercial vehicles. Below is a list of Frequently Asked Questions regarding the new ruling, courtesy of the FMCSA.

1 Q: What is the effective date of the Mobile Telephone rule?

A: The effective date of the rule is January 3, 2012.

2 Q: Are wired or wireless earpieces allowed?

A: Yes. Hands-free use of a mobile telephone is allowed using either a wired or wireless earpiece, or the speakerphone function of the mobile telephone. Wireless connection of the mobile telephone to the vehicle for hands-free operation of the telephone, which would allow the use of single-button controls on the steering wheel or dashboard, would also be allowed.

3 Q: Is Push-to-Talk allowed?

A: No. A driver’s use of the Push-to-Talk function on a mobile telephone violates the prohibition against holding the phone. This includes the continuous holding of a button that is necessary to use a Push-to-Talk feature through a mobile telephone, even when the driver is using a connected microphone or wireless earphone.

4 Q: Are holders of a commercial driver’s license (CDL) subject to the regulation only when driving a CMV, as defined in 49 CFR 383.5, or any vehicle?

A: CDL holders are subject to the Federal rule only when driving a CMV.

5 Q: What drivers are covered by the Federal rule: intrastate or interstate? CDL holders? All CMVs?

A: The rule covers both drivers of CMVs in interstate commerce and intrastate drivers who operate CMVs transporting a quantity of hazardous materials requiring placarding under 49 CFR Part 172 or any quantity of a material listed as a select agent or toxin in 42 CFR part 73.

If a CMV driver is employed by a State or a political subdivision of a State (e.g. county, city, township, etc.), FMCSA safety regulations do not apply, even if the driver is engaged in interstate transportation. But if a CMV driver employed by a State or a political subdivision of a State is operating a vehicle that requires a CDL, the applicable State traffic laws would govern (e.g., Maryland’s prohibition on the use of hand-held phones). The States have three years to implement by State law the disqualification provision.

6 Q: What is required of the employer in terms of company policy or training?

A: The rule does not require motor carriers to establish written policies in terms of company policy or training programs for their drivers. However, employers are prohibited from allowing or requiring their drivers to use hand-held mobile phones. A motor carrier may establish policies or practices that make it clear that the employer does not require or allow hand-held mobile telephone use while driving a CMV in interstate commerce. The carrier is responsible for its drivers’ conduct.

7 Q: Is dialing a phone number allowed under this rule?

A: No. Dialing a mobile telephone while operating a CMV in interstate commerce is prohibited by the rule. A driver can initiate, answer, or terminate a call by touching a single button on a mobile telephone, earpiece, steering wheel, or instrument panel – comparable to using vehicle controls or instrument panel functions, such as the radio or climate control system.

8 Q: Can a driver reach for a mobile telephone even if he/she intends to use the hands-free function?

A: No. In order to comply with this rule, a driver must have his or her mobile telephone located where the driver is able to initiate, answer, or terminate a call by touching a single button while the driver is in the seated driving position and properly restrained by a seat belt. If the mobile telephone is not close to the driver and operable while the driver is restrained by properly installed and adjusted seat belts, then the driver is considered to be reaching for the mobile phone, which is prohibited by the rule.

9 Q: Are tow trucks exempt?

A: No. The interstate operation of tow trucks that meet the definition of a CMV are not exempt. Tow trucks, however, are exempt when responding to police emergencies in accordance with 49 CFR 390.23(a)(3).

SOUND OFF – What do you think of the new rule? Do you see it as an indicator of the future for all cell phone use while driving? Do you agree or disagree? Leave your rants (for or against) here. :)

Are You Social? – Social Media & Your Risk

By the beginning of 2011, social networking websites had more than 900 million combined users. This has opened up completely new ways for people and businesses to communicate with each other. While the potential benefits of social media are great, there are some risks that use of these services creates.

Employees making posts on these sites might make inaccurate statements, inadvertently release confidential information, post things that embarrass the company, and can even open them up to lawsuits if someone follows advice they dispense and gets unfavorable results. Any of these situations can harm a company’s reputation, and its general liability policy might not pay for the costs of defending against these claims or paying settlements. For example, the insurance will not cover losses resulting from:

* An injury caused by or at the direction of an employee when he knew that the action would violate a person’s right to privacy.

* An injury caused by or at the direction of an employee when he knew that a statement was false.

* Claims that the business’s products or services do not live up to statements about their quality

* Injury arising out of statements made in Internet chat rooms or on bulletin boards the business owns, or over which it has control.

* Unauthorized use of someone’s name or product in a manner that misleads that company’s potential customers

Also, the insurance only covers liability for certain types of injuries that are not bodily injuries. It will not cover a lawsuit filed by someone who suffered financially after relying on advice on the company’s blog. That said, there are things you can do to reduce the chance that an uninsured loss will result from the use of social media. Keep written procedures for employee use of social media including:

* Who may post on the company’s behalf.

* Definitions of acceptable and unacceptable behavior.

* A clear distinction on employees’ personal sites that says they are not representative of the company.

* The consequences of non-compliance.

* Company policies regarding employees ability to link to the company’s website on their personal social media pages.

* Company policies on the content that employees may post on blogs which either belong to the company or are posted on the company’s behalf.

* Purchasing special insurance to fill in gaps left by the general liability coverage.

Social media offers exciting new opportunities for businesses to build relationships with customers, but they need to approach it with care and proper planning in order to minimize risk.

Identity Crisis

No, I’m not confused about who I am, or my role in life. ;-) Instead, I’d like to discuss a crisis of a different kind. According to the FTC, as many as 9 million Americans have their identities stolen each year, resulting in $50 billion in unnecessary costs on our nation’s businesses every year. Particularly in today’s economy, that’s a hefty price tag.

Here are the most common ways thieves go after your identity, as well as some steps you can take to protect yourself from their schemes.

  • Dumpster diving. Bills? Receipts? Credit Card offers? These are like gold to an identity thief. Solution: Invest in a shredder, or burn all mail with your personal information in the fireplace.
  • Skimming. In this method, a special storage device steals your information when your credit or debit card is processed. Sometimes installed directly to the credit card machine, and sometimes a separate device, this method has proven effective for thieves. Solution: Never let your credit card out of your sight. When dining out, pay at the register if possible, rather than giving your card to the server. Only use secure ATMs. Carefully monitor your credit card and checking statements for unfamiliar transactions.
  • Phishing. The thief approaches you electronically, pretending to be from a financial institution or company, trying to get your info through email or pop-up messages. Solution: Be wary of emails looking for personal information, especially of a financial nature. Never use links in an email to connect to a website. Instead, type the URL directly into a new browser window. Lastly, install (and maintain!) effective software to combat phishing.
  • Hacking. Technology is great, but if you don’t take precautions, it can leave you vulnerable to an attack. Solution: As mentioned above, install software to guard against hacking. Also, put passwords on all of your accounts – and don’t use your mother’s maiden name. Make up a fictitious word or better yet, a combination of random letters and numbers.
  • Old-fashioned Stealing. Of course there’s always the old standby: outright physical theft. Whether it’s your wallet or purse, bank or credit card statements, new checks or tax information, thieves are looking for any opportunity to gain access to your personal information. Solution: store important personal information in a secure location. Rather than carrying your social security card in your wallet, keep it in a locked file. Also, don’t put your social security number on your checks.

Here at Mason & Mason, we’re committed to your protection. While our main focus is insurance, the bottom line is that we want to make sure your risk as a whole is managed, and managed well. Information is key in meeting that goal. A complaint filed with the Federal Trade Commission, along with a police report, constitutes an Identity Theft Report. This report entitles you to certain protections. It can be used to (a) permanently delete fraudulent information from your credit report, (b) ensure that debts do not reappear on your credit report, (c) prevent a company from continuing to collect debts as a result of identity theft, and (d) place an extended fraud alert on your credit report. This means that being the victim of identity theft doesn’t have to destroy your financial outlook, but still… the hassle of getting things straightened out might make you wish you had taken steps to prevent the theft to begin with.

This is a very brief synopsis of some of the ways you can safeguard your personal information and protect against being the victim of identity theft, but there are many others. Now it’s your turn… do you have a tip to share with our readers? Leave it below.

ATTENTION Massachusetts Business Owners: Don’t Buy into the “Compliance Services” Scam!

An entity calling itself “Compliance Services” recently mailed solicitations entitled “Annual Minutes Requirement Statement Directors and Shareholders” to numerous Massachusetts corporations. The solicitation offers to complete corporate meeting minutes on behalf of the corporation for a fee. This is misleading because despite the implications contained in the solicitation, Massachusetts corporations are not required by law to file corporate minutes with the State.

In March of this year a ruling was passed down in North Carolina regarding “Corporate Services, Inc.”, the company sending out this solicitation. Selwyn J. Monarch was barred from sending the deceptive mailings to NC businesses, and his company was required to pay the State $25,000. The court stated that “any future mailing by the company must clearly disclose that it is an offer for solicitation of commercial services and is not approved or endorsed by a government agency”, and if you look closely, you’ll see that the language IS included on the form, but because of the design and subtle nuances contained in the document, many busy entrepreneurs mistakenly believe it is coming from the State and feel pressured to respond. Please note that any official communication from the State will include the name of Secretary of State William Francis Galvin.

We already know of at least one local business that fell for the scam, but then received a notice (like this one) from the Eastern Mass Chapter of the National Association of the Remodeling Industry and was able to stop payment on the check. It is our hope that you will see this notice and not be caught off guard. Please help us spread the word!

You can read the “Notice regarding ‘Compliance Services’ Solicitation” on the State website. If you receive this communication, please notify Laurie Flynn either by fax (617.878.3505) or email (laurie.flynn@sec.state.us). As always, if you have any questions please don’t hesitate to give us a call. It’s what we’re here for.