15Jun 2017

Background screening of prospective employees is an effective risk management tool that can reduce employee turnover, deter theft and embezzlement and prevent litigation over hiring practices. Although background checks do present some costs, the risk of hiring someone without having performed this screening could signify considerably heavier financial consequences—the cost of recruiting, hiring and training an unqualified employee only to then search for a replacement is a significant burden.

Why Pre-screen?

Many job applicants have a criminal record that would compromise their job placement, yet they do not disclose this information. Therefore, consider these advantages of pre-screening potential employees:

  • Discourages applicants from hiding a criminal background or falsifying their credentials
  • Eliminates any uncertainties about applicants in the hiring process
  • Encourages honesty while going through the hiring process

Extent of Background Checks 

At a minimum, it is advisable to ensure that an applicant’s history does not include a criminal conviction or deferred prosecution for a specific crime. Searches for criminal records might include federal, state and county records.

Beyond the basic criminal background check, take a risk-focused approach to determining additional levels of screening, which might include identity verification, education verification and professional license verification. The access level and sensitivity of the position will be key factors in determining whether additional screening is appropriate. Maintain background checks on existing employees by continuing to perform them on a regular basis.

A final element that can be included in a thorough background check is a credit report, which not only provides ulterior verification of social security numbers and employment history, but reveals other troubling financial issues that could be a factor in the hiring decision.

Employment Applications

The background check will be more efficient, more valuable and less costly if the employment application contains certain elements, such as a statement that all information is accurate and that any untruthfulness or omissions are legal grounds for termination. A standardized format that consistently collects all necessary information will also speed the background screening process. Here are some other helpful elements:

  • Any other names used
  • Reason for leaving past positions (“disagreement” or “mutual agreement” are red flags)
  • Specification that names of actual employers must be listed (staffing firms should be listed, not the firm hosting temporary workers)
  • Detailed contact information for references listed

A simple way to streamline the process is to implement an online application process that requires certain fields necessary for the screening to be completed. When a need for revision arises, the form can be easily modified across the entire organization. The application can be linked directly to provider’s systems that will extract all necessary information for the background screen.

Verify that all information on the application is accurate, and check credit reporting agencies for any anomalies. 

Legal Duties

To simplify the task, you may find it helpful to outsource the process to a background screening service provider. For many screening tasks, such as criminal background checks, outside providers can be faster and more thorough. It is important that when selecting such a provider, you consider its financial statements and health, its hiring and employment processes, identity theft safeguards and, of course, service offerings.

You are have several obligations to the applicant under the Fair Credit Reporting Act (FCRA):

  • Any applicant on whom an institution performs a background screen must give his or her written authorization to conduct the report.
  • If you ultimately deny employment, you must provide notification through pre-adverse action and final adverse action notification letters.

For More Help

If you need more information about protecting yourself from liabilities associated with hiring and termination, contact Kaercher Insurance. Our insurance experts can keep you covered and give you peace of mind.

15Jun 2017

A growing trend in new construction and renovations is green building, an effort to be more environmentally friendly and reduce energy costs. This goal makes sense in the health care industry, as health care facilities tend to use much more energy than the average commercial building.

However, transitioning to a green facility is easier said than done. Health care facilities have unique needs that often clash with green initiatives, such as their 24-hour operation, varying lighting requirements in different rooms, large amounts of water usage and the variety of equipment that must be operated continually. However, there are ways to incorporate green features while still maintaining necessary health and safety standards in your facility. It is important that you educate yourself, so that you can make the best decision for your own organization regarding going green.

Green Standards 

If you plan to engage in a green building or renovation project, it is important that you are aware of federal green standards.

In the United States, the dominant standard is the Leadership in Energy and Environmental Design (LEED) rating, which is administered by the U.S. Green Building Council (USGBC). Commercial buildings that are LEED certified not only have lower operating costs and provide a healthier, safer environment for occupants, they also allow the owner to qualify for tax rebates, zoning allowances and other incentives. Because of the unique nature of the health care industry, the USGBC has created a special LEED rating system for health care buildings.

The interesting thing to note about LEED ratings is that contractors and builders have a large amount of latitude on how they reach the certification. LEED does not specify what kinds of technologies or green components must be used to reach each level, and aside from the established prerequisites, points need not be attained in certain combinations. That means two buildings with identical point totals and LEED status may use completely different strategies, techniques and technologies to attain unique green results. One may excel in innovation and the other may focus on sustainability, but they both could ultimately achieve the same status.

Choosing Your Contractor

When choosing a contractor, you need to be sure the company has experience designing and building according to LEED health care standards. A common problem occurs when a contractor cannot deliver on the promised design, leaving the client with a building that does not meet LEED standards and does not impact energy usage to the degree expected.

Do research before choosing a company to build or renovate your facility. If a contractor promises something that seems too good to be true, it might be. Check all references and compare several options before choosing.

Protect Yourself 

This may seem obvious, but it is essential that everything is put in contractual form when working with a contractor. That way, if the job is not completed according to your specifications or up to the standards promised by the contractor, you can hold that contractor liable. Green building is quite expensive, so you want to be sure you get the proper return on your investment. You may want to also make sure your contractor and sub-contractors are properly insured in case of a future problem.

Starting Small

Building a new facility or renovated your existing one to incorporate green features is a huge undertaking. If you decide your organization isn’t ready to make that kind of investment, there are still small steps you can take in the direction of efficiency and sustainability:

  • Institute a recycling policy, if your facility doesn’t already have one.
  • When possible use energy efficient products and machines. This will require some investment up-front if buying new equipment, but it will be cost-efficient in the long run.
  • Reduce or reuse materials when practical and sanitary. One example is using real dishes and silverware in the cafeteria to avoid using paper and plastic.
  • Choose environmentally friendly cleaning and sanitation products.


15Jun 2017

Depending on the location and type of business you run, in the eyes of the customer, offering valet parking may range from a nice perk to an expected service. But no matter what reason you have for providing valets, to protect yourself from out-of-pocket expenses, you must be prepared for the risks that come along with it.

There are two primary choices when it comes to offering valet services, either employ a staff yourself or contract a valet company. Hiring a company can defer some liability and will likely require less attention from you, while hiring your own employees will give you more direct control over operations.

Good Hiring Practices Reduce Risk  

Over the course of their employment, valets will not only be responsible for handling customer vehicles and their contents, but they will also be the first and last people to interact with customers during their visit. If you are building your own valet staff, selecting the right employees can make all the difference. Looking at an applicant’s history will help you hire valets who will not generate unnecessary risk. Obtain the following reports before hire:

  • Driving Record Check – tickets, suspended licenses and other traffic violations are all red flags for valet hires.
  • Criminal Background Check – staying away from those with a history of theft can help you avoid a customer relations problem in the future if things start disappearing from vehicles.
  • Drug Screen – some insurance policies will not pay out for damages if the driver was under the influence of drugs or alcohol.

It is also a good idea to have a short probation period where a senior valet rides along with any newly hired employee to make sure they exhibit safe driving practices and can properly handle both automatic and manual vehicles.

When contracting with a valet company, you won’t get a direct say in who they hire to work at your property. Stay away from companies that don’t disclose their hiring practices. If you do decide to use a service, it is important that you make sure they enforce the same type of safeguards that you would if hiring the employees yourself. Even if the service is liable for damages, their employees still will be representing your company. An unhappy customer and tarnished reputation is a loss that insurance can’t cover.

Covering Damage

Even with the proper safety measures in place and a staff of highly trained, responsible employees, providing valet services will always carry risk. Valets deal with hundreds of cars a day in a fast-paced environment, making it only a matter of time before an accident happens. Whether you decide to employ your own valets or contract with an independent service, having the proper insurance is important. 

If you have in-house valets, you will need to make sure you take out the appropriate insurance coverages to avoid being stuck with the bill for any damage to a customer’s property. It is important that you get coverage specifically related to employees driving customer vehicles. Some important coverages to consider are:

  • Garage Keepers Liability – this protects you in case a customer’s vehicle is damaged or stolen while in your company’s possession.
  • General Liability – covers costs related to personal injuries caused by the premises or employees.
  • Employee Dishonesty Coverage – covers customer loss caused by fraudulent employee activities.

While you may already have some of these coverages in place for other facets of your business, check with your provider on how they will apply to your valet operations. Given the relatively high number and value of the vehicles handled by valets each day, you may have to look at a specialty insurer for coverage.

Benefits of Contracting Service

One of the benefits of using a valet service is that they absorb liability and keep you from having to pay out for damages or purchase additional coverage, assuming they have the appropriate coverage. When contracting with a service, make sure you see proof of insurance. Review all their information to make sure that you will not be held liable for any damage caused by their employees. To be on the safe side, it is recommended that you call their insurance provider directly to make sure they are accurately representing their coverage. If your contract with a valet company could expose you to liability, you need to know immediately so you can choose a different service or get any additional coverage you may need.

15Jun 2017

Technology companies own valuable intangible assets, such as sensitive data, software and intellectual property, which a general liability policy doesn’t account for. General liability provides protection in the event of bodily injury or property damage. Technology insurance coverage is designed to protect against the significant risk of economic loss related to intellectual property, network liability and network and cyber property security. 

A comprehensive risk management plan needs to guard against the unique exposures that technology operations present. Specialized technology insurance is relatively new and the terminology is still evolving as more claims are handled and new exposures are discovered. As a result, the terminology can be confusing and hard to understand. The following terms are some of the most common you will need to know to best understand your technology insurance protections:

  • Cyber liability: A cyber liability policy is a coverage that protects against damage from cyber-attacks, data breaches and other basic risks that result from using electronic communications and data storage. They often cover the cost of recreating damaged or lost data or systems, but do not include the costs that stem from the loss or damage, including legal expenses and data notification costs. Sometimes the term cyber liability is used broadly to describe technology related risks and technology specific insurance in general.
  • Data breach notification laws: These state laws dictate the requirements for notification if an organization were to suffer a data breach that compromised personal data, such as social security numbers and financial and health information. Each state law varies on the time period that individuals need to be notified of the breach and what situations are exempt from the requirement.
  • Cyber property: The intangible property your company owns. This can include websites, data and networks. These intangible assets can all be damaged. To protect your cyber property you may need to broaden the property enhancements on your existing policy. Also, check if you have any coverage that would protect if your company or an employee caused damage to another organization’s cyber property. 
  • Technology E&O: Technology errors & omissions (E&O) coverage protects against claims by a client that suffered a loss due to mistakes by your company. These mistakes must be due to error or oversight in a product such as a software program or web service.
  • Media and intellectual property liability: All content on the Internet is considered to be published, meaning it is subject to copyrights and infringement. Negative content about a person or company can be considered libelous. Take caution when publishing or posting anything to websites, forums or social networking sites.

The exposures and threats of technology business operations will continue to grow as the technology industry does. Kaercher Insurance can help you keep your business protected against these specialized risks.

15Jun 2017

According to the National Institute of Safety and Health, the most frequently cited Occupational Safety and Health Administration (OSHA) electrical violation is improper grounding of equipment or circuits. This is especially troubling for construction managers in light of the fact that construction workers suffer more electrical burns and fatal electrical injuries than workers in all other industries combined. Each incident carries significant costs in terms of lost time and resources and increases the employer’s risk of costly lawsuits. The most unfortunate aspect of this threat is that many of these accidents could have been prevented with the implementation of proper ground-fault protection practices.

OSHA Regulations

OSHA requires employers to provide at least one of the following:

  • Ground fault circuit interrupters (GFCIs) on construction sites for receptacle outlets in use and not part of the permanent wiring of the building or structure
  • A scheduled and recorded Assured Equipment Grounding Conductor Program (AEGCP), covering all cord sets, receptacles not part of the permanent wiring of the building, and equipment connected by cord and plug

About GFCIs 

Grounding a tool or electrical system involves creating a low-resistance electrical path that connects to the earth. A ground-fault occurs in a tool or electrical system when there is a break in this low-resistance grounding path. The electrical current may then take an alternative path to the ground through the user, resulting in serious injuries or death. GFCIs automatically limit or stop the flow of current in the event of a ground fault, overload or short circuit in the wiring system. They operate by monitoring the amount of current going into electric equipment and the amount of current flowing out along the circuit conductors. If the difference exceeds 5 milliamperes, the device automatically shuts off the power to prevent injury.

About AEGCPs

The OSHA-approved alternative to using GFCIs on a construction site is an AEGCP, which is a regimented system for testing electrical tools and extension cords to assure their proper grounding. If an AEGCP is used in place of GFCIs for ground-fault protection, the following minimum requirements apply:

  • Keep a written description of the program at the jobsite. Outline specific procedures for the required equipment inspections, tests and test schedule, and make them available to OSHA and to affected persons upon demand.
  • Designate one or more competent persons to implement the program. OSHA defines a competent person as someone who is qualified to identify hazards and authorized to take prompt corrective measures.
  • Visually inspect all cord sets, attachment caps, plugs and receptacles, and any equipment connected by cord and plug, before use each day. If you see any external damage—such as deformed or missing pins, or damaged insulation—or discover internal damage, take the equipment out of use until it is repaired.
  • Perform two OSHA-required tests on all electrical equipment, a continuity test, and a terminal connection test. These tests are required under the following circumstances:

o   Before first use 

o   After any repairs, and before placing back in service

o   After suspected damage, and before returning to use

o   Every 3 months

  • Maintain a written record of the required tests, identifying all equipment that passed the test and the last date it was tested (or the testing interval). Like the program description, make it available to OSHA inspectors and affected persons upon demand.

Using GFCIs in Conjunction with AEGCPs

Although OSHA permits the use of an AEGCP in lieu of GFCIs, it would be a mistake to view the choice as strictly an either/or proposition. The best course of action is to use GFCIs in conjunction with an Assured Equipment Grounding Conductor Program. Taking this step will not eliminate the possibility of a costly electrical accident on the worksite, but it will significantly reduce the risk of injury or death due to ground faults.

For more risk management tips, contact Kaercher Insurance at (702) 304-7800.

15Jun 2017

In a time when layoffs and foreclosures are widespread, your firm may be forced to manage vacant real estate. The insurance risks and liabilities associated with owning vacant property can be extensive, and to ensure you are adequately protected, it is important to know these risks. In addition to purchasing comprehensive insurance coverage, there are numerous preventive strategies for maintaining vacant properties to reduce risk and liability.

Potential Risks

There are a host of risks and concerns associated with owning vacant property. Vacant buildings are an obvious target for theft, trespassing and vandalism. For example, the rising cost of copper has given rise to an increase in the theft of copper pipes from vacant properties. In addition to any loss or property damage that may occur, keep in mind that the owner of a property can be held liable for criminal activities or accidents that take place on the premises.

In addition, vacant properties are susceptible to undetected damages, such as fire, water damage, electrical explosions, wind or hail damage, and mold. A study by the U.S. Fire Administration shows that approximately 30,000 fires occur every year in vacant buildings, costing $900 million annually in direct property damage. Many of these incidents occur in vacant buildings due to small, undetected maintenance issues; someone in an occupied building would have recognized and handled the problem before it caused a larger loss.

In certain facilities, there may also be environmental hazards that the owner needs to consider. Facilities that are used to store chemicals or other pollutants should ensure that such materials are removed or securely stored—the owner may be held liable for any hazardous materials that contaminate groundwater or other nearby natural resources. Also, underground fuel tanks present serious challenges and thus should be frequently and carefully inspected by professionals.

Other Ways to Mitigate Risk 

In addition to extending coverage, there are some simple steps that owners of vacant property can take to limit their risk and liability.

Prevent vandalism: Notify local authorities of vacated properties so they can watch for criminal behavior. Maintain an “occupied” appearance to the property—mow the lawn, have mail forwarded or picked up regularly and install light timers and/or a security system.

Limit liability: Make sure the property is free from significant hazards (e.g., broken railings or steps, broken windows) that could cause injuries to anyone on the property—this could include police officers, maintenance workers, firefighters or even trespassers.

Avoid damage: Performing regular maintenance on the property can decrease the odds of sustaining damage. Make sure the heating system and chimney are cleaned and inspected regularly. Have the plumbing system winterized to prevent frozen pipes. Periodically inspect roof, insulation, attic, basement, gutters and other areas of the property for any necessary repairs, mold, damage or other problems. Consider installing smoke detectors that are tied to a centrally monitored fire alarm system so the fire department will be notified in the case of an alarm. Remove all access material and combustibles from in and around the building.

Insuring Residential Properties

Most insurance companies include a clause that the homeowner’s insurance will expire if a home is left vacant for more than 30 or 60 days. This leaves the property owner financially vulnerable for all previously noted risk. However, many insurance companies do offer vacant property insurance, also known as vacant building insurance or vacant dwelling insurance.

Unoccupied Commercial Building Insurance

Vacant commercial buildings are more difficult to insure because they present greater risks, including increased chance of theft, malicious damage and burst pipes. It is important to disclose all relevant facts when seeking insurance, including the reason for the property’s vacancy and a schedule of any work to be done on the property.

Because of the increased risks and liability associated with a vacant property, these types of insurance tend to be costly—ranging from one and a half to five times the cost of a property insurance policy. It is important to look beyond the price and consider the suitability and comprehensiveness of the coverage being purchased.

For more information about vacant property insurance and other strategies to help protect your assets and mitigate loss, contact us today at (702) 304-7800.

15Jun 2017

Building a comprehensive safety culture is the best way to reduce illnesses and injuries, and their associated costs. But creating such a culture is not an overnight process or “flavor of the month” program. Instead, it is a multi-year, top management commitment that results in an organization with low accident rates, low turnover, low absenteeism and high productivity. This is a big-picture, long-term project.

A robust safety culture has the following characteristics:

  • At the highest organizational level, there is a well-articulated commitment to safety. This translates into organization-wide values, beliefs, and behavioral norms.
  • Employees’ base compensation ties directly to their commitment to the safety culture. This commitment is assessed in regular performance reviews.
  • Safety takes precedence over everything else, even production and efficiency. Employees who err on the side of safety should be rewarded, even if a later review suggests that the additional safety measures or concerns were unnecessary.
  • Communication about safety occurs across all levels of the organization in a consistently open, unedited, and honest manner. If problems or errors are identified, they are eagerly communicated, recorded, and analyzed without anyone being “persecuted.”
  • Unsafe acts—the main cause of accidents—are rare.
  • Employees continuously learn and identify opportunities for process improvements that will decrease the likelihood of an accident.

The following sections explore in more detail some of the key components of a successful safety culture.


It is difficult to just guess the quality of your safety culture. Therefore, it is important to benchmark where you are now, both in subjective terms and in objective, analytical measurements. By combining an analytical tracking system with a periodic, subjective culture survey, you can better understand the impact your efforts to improve the safety culture are having over time.

Hiring to Avoid Workplace Injuries

Due to preexisting medical conditions or limitations, some potential job candidates may be more prone to workplace injury.

It is a common misconception that the Americans with Disabilities Act (ADA) prevents you from asking any medical questions during the hiring process. However, according to the Department of Labor, there are actually three stages of employment: pre-employment, post-offer, but pre-placement (after the conditional offer of employment) and finally, employment. During the first and third stages, it is true that you cannot ask any medical questions. However, during the second phase (after a conditional offer of employment is extended) you can ask the applicant to fill out a medical questionnaire and/or take a medical exam. If, in medical opinion, the applicant is unfit for the job, you can withdraw the offer. It’s that simple. To avoid hiring your next workers’ compensation claim, there are two key processes you need to implement.

The Conditional Offer of Employment

The ADA says that employers cannot require a job applicant to provide medical information or undergo a medical exam until a conditional offer of employment is made. When a conditional offer is made you are essentially hiring the candidate. The only way an offer may be withdrawn prior to the effective date of employment is if, in medical opinion, the candidate will be unable to perform the job duties safely with reasonable accommodations.

The Medical Questionnaire/Exam

After you extend a conditional offer of employment, it is time to perform a medical screening of the candidate. If information emerges from the screening that indicates that the candidate will not be able to perform the job duties safely even with reasonable accommodations, then and only then can you withdraw the offer of employment.

Stay Out of Trouble with OSHA

OSHA most often shows up at your workplace in response to an employee complaint or serious accident. The best way to be prepared is to be in compliance. Not only does OSHA compliance help you avoid costly fines, it also ensures that safe work practices are being encouraged. Fortunately, some of the most common OSHA violations are also the easiest to address. 


OSHA requires that employers display certain posters and notices in the workplace. Not all employers need to post every notice—some apply only to very specific industries or situations—but you need to know which notices you are required to post and do so.


OSHA also requires certain employers to track workplace injuries and illnesses, and report them periodically.


OSHA’s Hazard Communication Standard states that employees must be made aware of all chemicals used in their workplace, the hazards they present and instruction for safe handling. This is accomplished with labels, safety data sheets (SDS), and employee information and training.

In addition to the three key areas of frequent OSHA violations, there is an easy way for you to identify the top violations in your specific industry. OSHA provides a searchable database of the most frequent OSHA violations by company size and Standard Industrial Classification (SIC) code.

Promoting the Health of Your Workers

As an employer, you bear many of the direct costs (such as medical claims) and the indirect costs (such as absenteeism and lowered productivity) of diseases, disorders and conditions that afflict your employees.

Research shows that you can avoid or reduce many of these costs by providing early behavioral and/or clinical interventions for your employees. Clinical preventive services include screenings and immunizations, as well as follow-up care. Behavioral interventions can include counseling and health promotion programs such as smoking cessation, weight management and physical activity initiatives.

Beyond what it does for them in their personal lives, improving your employees’ health has two fundamental and practical benefits for the health of your business.

Increased productivity

It is a simple fact that employees in good health are much more likely to be performing at optimal levels than employees in poor health.

Reduced health care costs

Employees with poor health use more health care resources and generate more claim costs than their healthy peers. Overall, you can expect to save about $3.50 in health care costs for every dollar you invest in effective health promotion.

Implementing a wellness program does not have to be an overwhelming task. In fact, you are more likely to have a successful program if you focus on a few key areas that are of interest to most employees and where results can be significant.

15Jun 2017

According to the Bureau of Labor Statistics nearly 500,000 workers are currently employed in the oil and gas extraction industry in the United States, and that number is on the rise as the world’s demand for energy continues to grow. This increase means more risks for well operators as they struggle to keep up with demand. Fortunately, there are many types of coverages available to those in the oil and gas industry to help mitigate these risks.

What Kinds of Risks Does the Extraction Industry Face?

Risks in the oil and gas industry can be split into three categories: 

  1. Environmental
  2. Equipment and property
  3. Worker health and safety

Environmental risks are the most far-reaching risks faced by the oil and gas industry. Major oil spills, gas emissions and other contaminations are well-documented and are considered to be part of doing business.

Equipment risks include malfunctions and downtime, which lower the profitability of the operation. Preventive and predictive maintenance are key for combating these risks.

Property risks include lost or damaged drills or wells and damage to equipment during transportation. Additionally, fleet risks, such as fuel costs, rollovers and spills, need to be addressed by employers.

Finally, worker health and safety is a big concern because of the dangerous nature of the industry; the fatality rate for oil and gas workers is seven times the national average for all workers. Providing the proper training and safety measures for workers as the industry continues to expand will be important for employers to remain profitable.

What are Your Coverage Options?

There is a host of coverage options available to those in the oil and gas industry. Typical commercial general liability (CGL), protection and indemnity (P&I), marine employer’s liability (MEL) and hull insurance policies are likely not sufficient to cover many of the risks the industry faces:

  1. Environmental Coverage Options

Pollution insurance is a necessary coverage because CGL policies typically exclude pollution events. Under the terms of pollution coverage, the incident that leads to an environmental loss must be “sudden and accidental” and must be detected within a certain timeframe. This coverage generally does not pay for cleanup costs. Specific pollution insurance coverages often cover operators from gradual environmental incidents; coverages include:

  • Pollution legal liability (PLL) or environmental impairment liability (EIL), which are site-specific coverages written on a claims-made basis. Incidents that are gradual in nature and take a long time to discover, such as a small pipeline leak, may trigger a claim. If an operator knows the exact point at which the incident occurred, it is usually not covered under a PLL/EIL policy.
  • Contractors pollution liability (CPL) insurance, which covers oil and gas contractors against claims from third-party bodily injury, property damage, cleanup costs and/or environmental damage due to their work on a worksite.
  • Storage tank liability (STL), which covers damage from leaking storage tanks, whether they are above- or below-ground.
  1. Equipment and Property Coverage Options 
  • Control of well insurance (also may be known as operators extra expense (OEE)), which covers expenses incurred in regaining control of a well after cratering or blowout. Additionally, endorsements may be added to this policy to cover pollution, equipment malfunction (such as casing damage), evacuation costs and damage to the property as a result of the cratering or blowout.
  • Oil lease property (OLP) coverage, which covers a loss or damage to petroleum storage tanks at scheduled locations.
  • Riggers legal liability coverage, which insures oil contractors when handling a worksite’s equipment. For example, this coverage would cover damage to a wellhead during installation by a contractor. A standard CGL policy would not cover such an event.
  • Rig and equipment physical damage coverages, which will protect much of the equipment used on a worksite from theft, breakdown and weather events, such as hurricanes and tornadoes. These coverages are often written with business interruption coverage, which replaces income lost due to a loss of production. Specific types of physical damage coverage include the following:
    • Onshore production property damage
    • Offshore platform and pipeline damage
    • Onshore and offshore construction
    • Drilling rig physical damage
    • Terrorism
    • Marine cargo insurance and hull physical damage
  1. Worker Health and Safety Coverage Options
  • Workers in the oil and gas extraction industry face many more health hazards than the average worker, so it’s important that employers have robust workers’ compensation and return to work programs to keep workers safe and healthy. In addition to these programs, providing worker training and implementing various safety measures will minimize the number of days your employees are away from work.
    • Training should focus on the following oil and gas safety hazards: 
      • Struck-by/caught-in incidents
      • Falls
      • Explosions and fires
      • Confined spaces
      • Ergonomic issues
      • Machine hazards
      • Hot work
    • Training should also focus on the following health hazards:
      • Hydrogen sulfide
      • Silica
      • Noise
      • Diesel particulate matter
      • Hazardous materials
      • Fatigue
      • Extreme temperatures
    • Remember that you must provide the proper personal protection equipment (PPE) for the job.
  • When employing contractors to work at your site, it is important to make sure both parties are fully insured. Carefully scrutinize all contracts and joint operating agreements. If a joint operating agreement requires each party to carry $1 million coverage, agree to split the amount if the claim is in excess of $1 million.
  1. Additional Coverage Options
  • Umbrella liability will cover excess costs over the policy limit associated with a claim. This type of coverage has become more restrictive in the past decade.
  • Professional liability is important for the development of a drilling site, including exploration, well design, testing and decommissioning. This coverage will pay for bodily injury and property damage, along with pollution incidents arising from these professional services.
  • Inland marine coverage covers onshore activities associated with running an operation, including transportation of equipment and other moveable parts. Similarly, ocean marine coverage will pay for damage and losses due to transportation of equipment via sea vessel.

Contact Kaercher Insurance today at (702) 304-7800 to learn more about your oil and gas coverage options.


30May 2017

Your organization should always be alert to possible employee theft, but more so during rough economic periods. During these periods, many employees are financially burdened, and normally honest individuals may be tempted to commit theft from their employer. This is even more of a risk if your company is also struggling, particularly if you have had layoffs and employees are fearful for their jobs. It is important that you take preventive measures and institute extra safeguards to prevent employee fraud.

Theft comes in many shapes and sizes, depending on your business and employees. Typically, employees may embezzle money or take advantage of their access to sensitive customer information. In addition, employees may use company time to take care of personal obligations—known as time theft. They may use company time to look for a new job, if they are in fear of losing their current one, or may use work time to take care of personal business. Furthermore, if employees are under large amounts of pressure due to their uncertain job fate, they may be more inclined to take breaks to surf the Web as a way to reduce some of their stress.

Tips to Avoid Employee Fraud 

To prevent theft at your organization, consider the following safeguards:

  • Communicate with your employees about the economy and how it will affect your organization. Be open and honest, but discourage them from panicking.
  • Try to maintain a positive work environment even during tough times. Encourage open communication, listen to employees’ ideas and recognize employee achievement.
  • Educate your employees about what is considered fraud and the consequences associated with it, and emphasize that the company has a no-tolerance policy.
  • Conduct more internal audits.
  • Increase company oversight by upper management and owners.
  • Reconcile bank statements immediately.
  • Consider using a payroll service to ensure accuracy.
  • Purchase Embezzlement Insurance.
  • Consider installing surveillance equipment. Be mindful that this may decrease employee morale if they feel that they are not trusted. You may also want to monitor computer activity more closely.
  • Upper management may consider taking a pay decrease or not receiving bonuses, so that lower-level employees see that everyone in the organization is affected by the economy.
  • Regarding financial tasks, give different employees different jobs, such as one person handling transaction authorizations, one person collecting or paying cash and one person maintaining records. Do not allow one employee to have too much control.
  • Encourage employees to use their vacation time. If someone is stealing, it may become more evident once they are away for a few days.
  • Establish a fraud hotline for employees to report suspicious or fraudulent behavior. Give them the option to call anonymously.
  • Conduct thorough background checks on all your new hires.
  • Train managers and supervisors to monitor employees and watch for suspicious behavior. Any suspicious behavior should be reported and further investigated.

To learn more about Embezzlement Insurance, contact Kaercher Insurance at (702) 304-7800 today.

30May 2017

In a business climate driven by results, shipping terms are often treated as little more than an afterthought of a sale. However, the shipping terms you agree to directly influence the amount of risk you’re exposed to and the amount of insurance you’ll need to mitigate it. This can affect your bottom line, as assuming additional risk increases your potential for loss.

Shipping Terms 

The terms laid out in a shipping agreement determine when ownership of the goods transfers from you to the buyer. The longer you hold ownership, the more risk you face. To make sure you are adequately prepared in the event of a loss, it is important to have a clear definition of when risk transfers. Published by the International Chamber of Commerce (ICC), the International Commercial terms, or Incoterms, are a set of internationally respected and recognized shipping terms used in transactions both domestically and between nations. While the definition of a given term should be explicitly defined in the shipping agreement to avoid any confusion, they are typically defined as follows:

  • Group E

EXW, EX works: The seller makes goods available at their premises. The buyer is responsible for carriage arrangements and any subsequent risk.

  • Group F

FCA, Free Carrier: Risk and responsibility for shipping costs transfer to the buyer when goods are presented to the carrier at the named location.

FAS, Free Alongside Ship: Risk, and responsibility for shipping costs, transfer to the buyer when the seller deposits goods alongside the ship before departure.

FOB, Free on Board: Risk, and responsibility for shipping costs, transfer to the buyer when goods pass the ship’s rail during the loading process.

  • Group C

CFR, Cost and Freight: Risk transfers to the buyer when the goods pass the ship’s rail during the loading process. The seller is responsible for shipping costs to the named port of destination.

CIF, Cost, Insurance and Freight: Risk transfers to the buyer when the goods pass the ship’s rail during the loading process. The seller covers the insurance and shipping costs to the named port of destination.

CPT, Carriage Paid To: Risk transfers when the goods are presented to the carrier. The seller covers cost of carriage to the named place of destination.

CIP, Carriage and Insurance Paid To: Risk transfers when the goods are presented to the carrier. The seller covers cost of carriage and insurance to the named place of destination.

  • Group D 

DAT, Delivered at Terminal: The seller covers all transportation costs and bears all risk until the goods are unloaded at the named place of destination.

DAP, Delivered at Place: The seller covers all transportation costs and bears all risk until the goods are made available to the buyer at the named place of destination.

DDP, Delivered Duty Paid: The seller covers all transportation costs and bears all risk until the goods are made available to the buyer at the named place of destination. The seller is responsible for all cost associated with importing goods.

It is important for your sales force to understand the potential costs involved in shipping agreements. Making concessions in shipping responsibilities to achieve a higher selling price could work out poorly in the long run if the shipping agreement then puts a majority of the risk on you. Ideally, you want to transfer risk to the buyer as soon as possible.

Undefined Shipping Responsibilities

If you fail to establish in the contract when risk transfers and a loss subsequently occurs, the resulting dispute of ownership will most likely be resolved in court. There, ownership will be decided based on whether the contract was of the shipment or destination type:

  • Shipment Contracts: Contracts that require the goods to be shipped by a carrier but do not specify an end destination. In these situations, seller responsibility extends only until the goods are put into the hands of the first carrier. After that, the buyer is responsible.
  • Destination Contracts: Contracts that specify an endpoint or final destination, such as the buyers place of business. In these situations, risk transfers at the point when the merchandise is presented to the buyer at the named destination.

While these categories are used as a general outline of how risk is assigned, it is ultimately up to the court to determine who owned the goods at the time of loss. To prevent an unfavorable court ruling, always define the transfer of risk in your shipping agreements. Clearly establishing your responsibilities, as well as those of the buyer, will help both parties obtain the proper amount of protection without leaving gaps or paying for additional coverage that is not needed.

For further coverage or risk management information and assistance, contact Kaercher Insurance at (702) 304-7800.