Group Captive Seminar

You’ve probably noticed your commercial insurance premiums have increased over the last couple of years?  You’re thinking, “My losses have been excellent, why is cost of my insurance going up?” 

 The news isn’t all bad.  Savvy, and forward looking companies, have been, and are continuing, to seek other options – like the “alternative market,” for example.  The fastest growing segment of the alternative market is group captives.

 I’d like to invite you to a no-cost, informational seminar to educate you about Captive Property/Casualty insurance programs.  No matter what type of program you are currently in, you will find the information presented at this seminar very helpful in reducing your long-term insurance costs.


  • Unused premium dollars are returned to members in the form of a dividend
  • Initial premium pay-in amounts are often less than conventional insurance programs (up to 30% less)
  • Premiums are based on your own company’s loss experience
  • Captive participants earn investment income on the dollars in their loss fund
  • Enhanced risk control programs help reduce your losses, improving your dividend and ultimately reducing your up-front premiums
  • As an owner of a captive, you have control over your insurance destiny

 There is a reason why most, if not all, Fortune 2000 Companies, are some form of alternative risk financing – like captives.  The minimum premium to be considered is $100,000.


  • Workers Compensation
  • General Liability
  • Commercial Auto

 I invite you to join us on Tuesday, November 12, at the Dedham Hilton (right off Rt. 128).  The meeting will start at 7:30 AM and last for approx ninety minutes.  A continental breakfast will be served.  So, that we can reserve a space, please complete and fax the attached RSVP.  Alternatively, feel free to email me at:  Thank you for your interest, and I look forward to educating you.

Massachusetts Limited Other States Benefit Endorsement WC 20 03 06B

I received my monthly newsletter yesterday from Irene Morrill, VP of Technical Affairs, from the MA Association of Insurance Agents.  The topic was “Massachusetts Limited Other States Endorsement WC20 03 06 B.”  I don’t know how this blog topic got by me, but it did.  Well, better late than never.

There is a lot of confusion as to when a new state needs to be listed to section 3A of the Workers Comp policy.  Section 3A is where any and all states that a contractor could be working in are listed.  For contractors with a MA workers comp policy, who work only in MA, this isn’t a big deal, because MA will automatically be listed. 

The problem arises when MA based contractors cross state lines and work in other states.   The new Other States Endorsement (effective 6/1/13) WC 20 03 06B will pay benefits in this situation only “….. when required by the WC law of a state other than MA, the benefits due to employees pursuant to such other state’s law, but only if the claim for such benefits involved work performed by a Massachusetts employee.  For purposes of this endorsement, a MA employee is someone whose contract of hire was made in MA or whose work for you, as of the date of injury, has primarily been conducted in MA.

The easiest thing to do is to list any and all states where you will be working to section 3A of the policy.  Unfortunately, it’s not always that easy – some carriers will not add any/all states to the policy.  For instance, if you are written in the assigned risk pool, they will not add any state other than MA in section 3A.  In this situation, you will need to purchase a separate policy for that state. 

Some may be thinking “well I only have MA employees, and I do some small jobs in NH, so I’m all set.”  Not so.  To further complicate matters, there are certain states that require to be listed in 3A of the policy.  The two that come to mind are NH and NY.  You can’t work in either state, EVER, unless they are specifically listed on the policy.

Make sure when reviewing your insurances with your broker that you talk about the states in which you do business.  It’s certainly better to find out at the beginning which states your carrier is willing to add to 3A.  The last thing you want to be doing is scrambling around for coverage at the last minute, or worse, not be covered.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Protecting Women in the Construction Workplace

Women construction workers are, in some cases, exposed to unique safety/health hazards.  Although males make up the majority of construction workers, as of 2010, there were 800,000 female construction workers (9%), of which 200,000 were in the field.

On August 22, OSHA announced an alliance with the National Association of Women in Construction (NAWIC) that addresses some of the unique exposures women face in the field.  The alliance will “focus on “musculoskeletal, sanitation, and poorly fitting PPE.”

It’s a two year alliance, and Dr. David Michaels says “through this alliance, we will work together to forge innovative solutions to improve safety, health, and working conditions for women in the construction trades and retain female workers during a critical time of job shortages in this industry.”

There is a specific webpage they developed that outlines the Women in Construction program.  In addition, for more information on the program, you can visit the OSHA/NAWIC site.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Employer Retaliation Claims On The Rise

I read an interesting article in the Wall Street Journal the other day.  James Hagerty wrote about the contradiction of a drop of workplace injuries (31% in the last decade), but an increase in employer retaliation claims.

While some will argue the drop in injuries is a result of improved jobsite safety, others say it’s the fearfulness of losing your job for having submitted a WC claim.  Personally, I think it’s a little bit of both.  I had written in a prior blog about using safety incentives as a method to reduce injuries, and Mr. Hagerty has a quote from OSHA cautioning companies against using this practice.

Although most of the article is about the railroad industry, he does make mention of the construction industry.  As you may suspect, various groups, from the AFL-CIO, U.S. Chamber of Commerce, Employers, to various Political Organizations, have differing views on the data, and what it means.

“HEI Hospitality LLC last year held a “Super Safety Bingo” program in which employees of the US Hotel operator could vie for prizes, including a Ford Mustang.”

“If someone is injured, that hotel’s associates are no longer eligible for the bingo game, the rules states.  Many safety experts say such incentives create peer pressure that discourages employees from reporting injuries.”  This program has since been suspended.

He also quotes a 2011 study of construction sites that showed only 47% of injuries were reported.  While most companies I know of do the right thing, there are obviously those that don’t.  Beware, OSHA is on the lookout for those skirting the law, and I think we all know, they mean business. 

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Every Business Should Purchase Employee Dishonesty Coverage

One coverage often underappreciated, and overlooked, is employee dishonesty coverage.  What is employee dishonesty?  Employee dishonesty is the theft of money & securities, and other property by an employee.  Don’t think it can happen to you?  Think again.

In the last month, I’ve had two separate claims for employee dishonesty – one for over $100,000, and another for about $20,000.  In both situations, the theft was by a trusted, long time employee.  One of the big problems with employee dishonesty claims is a lot of companies don’t figure it out until after a significant amount of time has elapsed.

One of the most talked about cases in recent memory was the J&J Materials case.  Angela Platt was employed by J&J as a staff accountant.  In that position, she was responsible for accounts payable and was allowed to write checks to pay expenses.  Starting in 2000 and ending in 2006, she embezzled a total of $6.9 million.

This is an extreme case, and you’re probably saying, “This could never happen to me.”  Think again.  Sure, it’s unlikely any employee would be able to steal that amount of money, but don’t be blind to the fact they could get something.

The US Small Business Administration (SBA) offers 6 tips for preventing employee dishonesty.  I’ll list them, but would recommend clicking the link for a full description.  They are:

  1. Use pre-employment background checks
  2. Check candidate references
  3. Proactively communicate conduct guidelines
  4. Don’t be afraid to audit
  5. Recognize the signs
  6. Set the right management tone

Employee dishonesty coverage is not expensive, and oftentimes can be combined with your ERISA bond coverage.  I recommend every business to purchase the coverage.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

OSHA’s Initiative to Protect Temporary Workers

Many contractors have the need, at times, to hire temporary workers.  OSHA has recently launched an initiative to protect temporary employees, because of a spike in workplace fatalities.  As part of their program, they have begun to work with temp agencies on best practices.

It goes without saying, that temp employees would be more susceptible to workplace injuries than regular full time employees, especially in the first days on a job.  Many times temp employees are hired at the last minute, and aren’t trained in some of the same safety programs as regular full time employees.  It can be a recipe for disaster.

OSHA inspectors have found that temp workers have not received the requisite training needed (in a language/vocabulary they understand), and are not provided with the same PPE as are permanent employees.  It’s because of this that OSHA has stepped up its enforcement efforts, with the hope of reducing fatalities amongst temporary workers.

Be on the lookout for when and OSHA inspector shows up on a job, and you are using temporary workers.  They are going to assess whether or not the temp employees have the proper training, and if they are exposed to hazardous conditions.

On a side note, there could be an insurance issue when using a temp agency.  Typically, a temp agency will provide the workers compensation coverage for the employee, but it’s imperative the temp agency has the “alternate employer endorsement” AND schedules the alternate employer (contractor).  It would make good business sense to have the temp agency supply you with the endorsement showing where they added you.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Smith Buckley & Hunt Mobile App Ready For Use

Finally, our mobile app is ready for action.  The app is available for download on Apple, Android, or Kindle devices.  Check it out and let us know what you think.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Check Out OSHA’s Heat Safety App

Last week we had 50 degrees and rain, and within five days, we have a 90 degree heat wave.  Welcome to New England!!  This is a perfect time to introduce you to OSHA’s heat safety tool app. 

The phone app is available for Android, Blackberry, and iPhone.  Check it out on the OSHA website.  For those contractors working in the heat, it’s a pretty cool tool to help stay safe during the summer heat.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Changes to Experience Mod Worksheets Could Help Some Massachusetts Contractors

Kudos to the Mass Division of Insurance (DOI), and the Mass Workers Comp Bureau (WCRIBMA) on agreeing to make changes to experience mod worksheets.  I had written in a prior blog about whether or not it was fair for a subcontractor to be disqualified to bid due to their experience mod being over 1.0.  If a subcontractor has a mod over 1.0, it doesn’t necessarily mean they don’t run a safe operation.

For instance, when payrolls go down, X mods go up.  When rates go down, mods go up.  What about claims that are going to be subrogated due to the fault of others?  When any of the aforementioned happens, X mods go up – through no fault of the subcontractor.  It’s this last point where subcontractors could see some relief.

The DOI wrote to the WCRIBMA concerning “that bidders on public and private contracts sometimes may be harmed by a failure of prospective contractors to understand the limitations of workers’ compensation experience rating as a proxy for employer safety.”

Starting on May 1, 2013, the WCRIBMA will, when requested, promulgate an illustrative experience mod taking out any claims that are being subrogated.  It’s important to note that the mod calculation is purely for illustrative purposes, and meant to be used to help subcontractors when bidding.

When requested by the client and/or insurance broker, the WCRIBMA will contact the insurance carrier to confirm whether or not a claim is being subrogated.  Within 10 days time, the WCRIBMA will recalculate the “illustrative mod” with the subrogated claim(s) taken out of the mod calculation, and then forward to the person(s) who made the request.

Starting on September 1, 2013 when a mod worksheet is produced, the following language will be on the mod worksheet “Experience Modifications should not be used alone as a test for workplace safety.  Experience modifications may not reflect the possibility of future recoveries for accidents which are ultimately determined to be the liability of another entity, and third party recoveries, when received, may retroactively reduce both experience modification and employer premiums.  In addition, while Massachusetts ‘balances’ its experience ratings at 1.00, some other jurisdictions do this ‘balancing’ at a number less than 1.00 will look lower but produce the same policy premiums due to counterbalancing offsets in basic classification rates in those jurisdictions.”

So, there you have it.  Finally some good news for subcontractors on the workers compensation front!

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

What to Expect in Insurance Pricing for 2013

I read an article, 2013 Insurance Forecast.  It was written by Jeffrey Cavignac, and I found it to be very informative, and mirrors exactly what I’ve been saying, and seeing over the last yr or so.  It starts out talking about what is happening in the industry right now – that being a definite firming of the market.  Translation – a definite upward shift in the price of insurance with the biggest increases in the workers compensation line.

There are several reasons why we are now seeing price increases.  They are:

  1. Return on average net worth is subpar
  2. Poor underwriting results
  3. Insufficient investment returns
  4. Change to the NCCI Experience Mod formula

Jeffrey states “the industry needs five to ten points of rate to achieve the returns to continue attracting capital.”  One question many contractors have is, how does this affect overall insurance premiums?  As stated above, and espoused in this blog, the biggest increases are being seen in the workers compensation line, anywhere from 5 – 20%.  For those contractors with an NCCI (interstate) mod, the mod formula changed on 1/1/13, and many contractors could see, and have seen, significant mod increases as a result of the change.

Massachusetts contractors have been fortunate on the rate side because we haven’t had a rate increase in several years.  However, that’s not entirely true.  Even though we haven’t seen an actual increase in rates, we have seen significant scaling back of “rate deviations.”  For those of you that do work in other states, you most certainly have seen WC rate increases.

How are the other lines being impacted?  GL, Property, Auto, Inland Marine and Umbrella policies can expect increases in the 5 – 15% range.  The increases seen by many contractors are not as a result of poor loss history, it’s just what is going on right now.  For those contractors with losses, many of you will see bigger increases than that.

It’s even more important now to get a handle on your insurance program.  What are you and your broker doing to drive your costs down, and profitability up?  Dropping off a policy, returning your calls, and getting COI’s out aren’t helping you get your costs down.  Isn’t it time to demand more?  I certainly think so.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.


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