What is Waiver of Subrogation and why you need it:

When performing work for general contractors or other larger entities, subcontractors are usually required to provide certificates of insurance. The certificates of insurance are generally required to evidence the contractor’s insurance program, but in many instances, they require something else. Subcontractors are often asked to change the terms of their insurance policies to the benefit of the other party. A very common provision requested in a certificate of insurance is “additional insured” status, where many of the rights of the general liability policy are granted to a third party, such as a general contractor. In addition to additional insured status, many parties will also request the subcontractor’s insurance carrier grant them a “waiver of subrogation” clause. So what’s the purpose of waiver of subrogation? First understand that subrogation is the process where an insurer pursues reimbursement from another insurer for claims they paid that were caused by the actions of their policyholder. Waiver of subrogation prevents the insurer from pursuing reimbursement the other insurer for such claims. For example, a general contractor requires waiver of subrogation status from a subcontractor on General Liability, Commercial Auto and WC policies. The subcontractor‘s insurer grants the request and a certificate of insurance is issued. Later on the job site, a general contractor employee drops a tool while on the second level, striking a subcontractor employee on the first floor. The employee is rushed to the hospital for a head injury and damage to his eye. The subcontractor’s workers compensation policy responds by paying for the medical bills and lost wages of the injured employee. The total claim is expected to run about $185,000. Under normal circumstances, the subcontractor’s workers compensation insurer would then subrogate against the general contractor’s general liability policy for reimbursement of the $185,000. However, since the subcontractor agreed to grant the general contractor waiver of subrogation status, the subcontractor’s workers compensation insurer is blocked from doing so. The end result is that the general contractor’s insurance program is spared from having to pay for the actions of their employee that resulted in bodily injury to a third party. The general contractor’s loss history stays clean while the subcontractor’s workers compensation experience modification gets hit with a big loss. The subcontractor will have to pay increased premiums for 3 years due to the increased experience modification and ARAP penalty. In the end, the increased premium costs could be greater than the amount the subcontractor made on the job in the first place. A waiver of subrogation doesn’t sound all that threatening at first glance, but as shown above, the results can be very expensive. As with any change to your insurance protection, granting a waiver of subrogation should not be agreed to lightly.

Testimony!

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Party Time!!

It's that time of Year again, where everyone is having Holiday Parties for Business and/or Personal. TJM Insurance Services has many markets for one day events. Example: for $1Mill., Limit non host bar base premium $500 to $750. This is based on the number of guest and Hours of the Event. Please contact TJM Insurance Services for your Holiday Event Parties.

New Specialty Program Available

NATIONAL SPECIALTY PROGRAMS USL&H Longshore Products Two "A" or Better Rated Carriers Available Workers’ Compensation • $10,000 minimum premium with USL&H for nearly all classes (1% or more exposure) • Can write the WC on Marinas • Guaranteed cost • State Act and USL&H on same policy • Large deductibles available Maritime Employer’s Liability (MEL) • Written on a monoline basis • Low minimum premium for incidental exposures • Primary or excess MEL coverage available Benefits • In-house binding authority with prompt turn around • Policies are non-assessable: no joint & several liability • Committed USL&H claims expertise • USL&H underwriting professionals Available in All States • Two "A" XV rated carriers available • New ventures welcome • A.M. Best rating of "A" or better Required Information A Complete Submission is Requested to Assure Best Terms & Prices are Offered Along with: • Fully Completed & Signed ACORD application • 5 years currently valued loss runs • Experience Modification Worksheet • Supplemental application (N/A for Marinas without USL&H exposure) • Target Pricing or Expiring Premium

What Does General Liability Cover You For

The Facts A general liability insurance policy covers claims of damage and injury caused by the insured during the course of business. This insurance covers four categories: bodily injury, personal injury (which includes libel or slander), property damage, and advertising injury. General liability is usually bundled with other types of insurance. When packaged, the limits for this blanket coverage may be lower than needed. Companies can opt to purchase this insurance as a standalone policy. What's Covered A general liability insurance policy protects a company and its employees from many types of incidents. This insurance covers bodily injury, property damage, product-completed liability, contractual liability, liquor liability, employer injuries, and damages from fire, lightning and explosion. Medical payments for personal injury, coverage for advertising injury and legal defense costs fits under the umbrella of a general liability insurance policy.

Workers' Comp Reform Bill Signed

FLASH REPORT! Workers' Comp Reform Bill Signed Gov. Jerry Brown has signed SB 863, the comprehensive workers' comp reform bill that Sen. Kevin DeLeon (D-Los Angeles) sponsored. Brown's administration worked behind the scenes to assure its passage. The negotiated deal between big labor and big business sets into motion a process designed to lower costs for employers and raise benefits for injured workers and their attorneys. The benefits to injured workers will ultimately increase by more than $700 million beginning January 1, 2013 and continuing the following year. The projected savings to the employers, which fund the workers' comp system, are said to come from reducing frictional costs, delays in care, and the addition of some new price controls on services. Supporters maintain that these changes will not only offset the mandated increase in permanent disability benefits, but will produce actual system-wide savings. Estimates, however, vary widely and will depend on the effective implementation of the bill's provisions and the ability to withstand the inevitable challenges in court. A 12.6 % pure premium price increase has been requested by insurance carriers to be effective January 1st, 2013 contemporaneously with the legislation. It is pending likely approval by Insurance Commissioner Dave Jones. Comes now the litigation to see what will really happen.

KTLA Breaking News: Must Read

L.A. probation officer arrested in alleged workers' comp fraud September 4, 2012 | 12:42 pm An L.A. County probation officer was arrested Tuesday on suspicion of workers' compensation insurance fraud, and officials say other potential criminal investigations are ongoing into other employees in the department. Rochelle Williams, a six-year probation department veteran, allegedly filed nine fraudulent on-the-job injury claims dating to November 2009, according to county probation officials who made the arrest with state insurance investigators at the agency's Downey headquarters. Authorities say Williams forged "both departmental and medical documents, including signatures, to support her claims for workers compensation." Williams has been relieved of duty and placed on administrative leave, pending the outcome of the administrative and criminal investigations, according to Los Angeles County Chief Probation Officer Jerry Powers. The county Probation Department is currently initiating investigations into several other potential criminal cases involving department employees, officials said in a statement. Powers said he is committed to ensuring that all staff in the Probation Department adhere to the highest standards required of a professional law enforcement organization and will seek appropriate remedies, including criminal prosecution when staff violate the laws “We are continuing to work closely with other law enforcement agencies, including the Los Angeles County district attorney’s office, to crack down on instances of employee fraud,” Powers stated, noting workers' compensation fraud and criminal activity are some of issues he has addressed since taking over the department. “Hopefully, this will serve as a clear message that this chief and, this Probation Department will not tolerate criminal behavior by the staff," he said. "This is a law enforcement agency and as such, we will hold ourselves to a higher standard both on and off duty.”