How to Open a Daycare

We have compiled licensing procedures for New York City. Make sure to follow your state’s specific requirements. Regardless this will give you a general idea of what you will have to do Read More »

What Daycare Owners Must Know About Lead Based Paint

The most common cause of childhood lead poisoning is the dust that comes from lead based paint. While lead paint was banned for NYC residential use in 1960, and nationwide in 1978, Read More »

How to Manage Abuse & Molestation Risks – Part 1

Above all else a school’s primary responsibility is to keep their children and teens safe at all times. Unfortunately this is not always the case as during the past few years several Read More »

Proper Insurance Claims Follow Up Procedures Yield Big Dividends for Schools & Non Profits

If you read our first article in the series “Managing Insurance Claims First Reports Can Have Big Impact  for Schools  & Non Profits” then you know that it’s a two part process, Read More »

 

Category Archives: Residential Care

Court Ruling Set To Impact Insurance Costs for Schools & Non Profit Organizations

Gavel_Blue

On Tuesday August 28th, 2012 U.S. District Court Judge Frederic Block ruled the statute of limitations didn’t automatically disqualify a sexual abuse case against Poly Prep Country Day School even as some allegations date back to 1966.  It’s well documented that NY State has one of the countries strictest statute of limitations for sexual abuse and molestation claims.

If the 40 page ruling stands it opens the doors for other potential victims to come forward and press legal action. According to the recent Wall Street Journal article by Sophia Hollander, the case against Poly Prep has been carefully followed as the impact could be wide spread.

Why then do I assert that insurance costs will be impacted? Simple; if insurance carriers begin to see an uptick in sexual abuse & molestation claims, forget merits for a second, just pure cases reported, premiums are going to rise. If the underwriters sense the NY Legislators in Albany will mollify plaintiffs and weaken the statute of limitations, more cases will be open, which will translate into more sexual abuse and molestation claims, which translates into higher losses for insurance carriers. Finally, as insurance carrier’s losses increase they need to raise insurance premiums to off set these losses.

For insurers, and ultimately buyers of liability insurance such as nursery schools, private schools, charter schools, and religious organizations, it’s very difficult to assess the final cost of an abuse and molestation claim. Sexual abuse and molestation insurance claims tend to get their initial reserves set low, and then watch the cost of the claims rise as time goes on. This is called loss development; as time grows so does the cost to administer, defend, and ultimately settle the loss.

Insurance carriers can predict through actuaries the number of sexual abuse and molestation insurance claims they can expect in a given year as the historical data tends to be accurate. If the laws change in favor of the plaintiffs allowing more cases and thus more liability claims to move forward the losses on this class of business will increase, perhaps dramatically. This will move their actuarial tables resulting in higher loss trending and thus the need for more premiums. The carriers won’t wait for the claims to start rolling in to raise rates, it will happen much sooner, perhaps as early as 1st quarter 2013.

There are macro events that happen in the insurance industry that affect both carriers and customers alike in one fell swoop. The key for any nursery school, private school, charter school, religious organization, or non profit is to find line items on their own P&L that they can impact. Our favorite is workers compensation insurance as that is rich in opportunity to lower costs though protocol. For purposes of this article our intent is to simply make you aware of this potential macro trend that may ultimately drive your costs for sexual abuse and molestation liability insurance.

Think Twice Before Purchasing Your Workers Comp Insurance Through Your Payroll Provider

Screen shot 2012-08-20 at 11.40.47 AM

We just posted an article on our company website but figured it was important enough to post here as well. The article speaks to those considering purchasing workers comp through a payroll provider such as ADP and Paychex. We give you the skinny on the pros & cons relating to admin costs, rates, and claims. When it comes down to it, the cost/benefit analysis reveals that the costs are significantly higher for most businesses. Click here to read the full article!

Risk Tip: Take Extra Care When Documenting Employees

risk

As is often the case with risk and insurance, a few extra steps and attention to detail can pay an enormous dividend. We all have basic employee files with the standard information. We suggest to many of our clients however that they should include a few extra details about their employees for future reference.

1. Take a Digital Picture (Head Shot)  -  You never know when and how valuable this one picture could be. Here a just a few examples of future potential uses:

  • If the employee travels domestically or internationally and runs into trouble either from a kidnapping or other nefarious event, the ability to respond quickly to local authorities request for recent information can make a huge difference.
  • In larger organizations, or organizations with a transitional workforce where you might not know all employees, a photo on file might help identify a potential assailant in a workplace violence event.
  • If you are ever in the unenviable position of having to hire a private investigator to track an ex employee it’s very helpful if the investigators have a recent photo to help them identify the person they are investigating as it saves time, and insures accuracy.

2. If employees travel with their own personal vehicle on business, such as sales people, job superintendents, e.t.c., it is helpful to have the declarations page of their personal auto policy showing coverage limits, effective dates, and the policy number. If they are involved in a motor vehicle accident HR will want to be sure a claim has been filed on their personal auto policy first. It also offers the opportunity to increase limits to protect the corporate P&L.

In our business the more info we have the better as I have yet to meet anyone smart enough to see it all coming from a mile away!

An Update on New York Non Profit Sector Reforms

New_York_State_Capitol1

Attorney General Eric T. Schneiderman first introduced a plan in February to reform and revitalize New York’s nonprofit sector. A major component of that plan is the “Non Profit Revitalization Act” which was brought to the New York State Senate in May. The act is scheduled to take effect January 1, 2013. The attorney general’s plan includes legislation to eliminate outdated and costly burdens on nonprofits, strengthen oversight and accountability, and reaffirm his commitment to policing fraud and abuse. Acknowledging that organizations throughout New York have been facing historic financial and strategic challenges, the attorney general’s plan also includes several new partnerships with the business and academic communities to enhance nonprofit governance.

Schneiderman’s legislation includes a number of key reforms:

  • Streamlining bureaucratic processes to expedite the formation of nonprofits and approval of key nonprofit transactions;

  • Modernizing outdated requirements, such as permitting the use of technology to facilitate more efficient operations and to reduce costs;

  • Requiring that boards provide improved and independent oversight of executive compensation;

  • Increasing board responsibilities to oversee financial audits;

  • Enhancing the Attorney General’s tools to police self-dealing and other forms of corruption;

  • Requiring nonprofits adopt conflict-of-interest and whistleblower policies.

The Nonprofit Revitalization Act represents the most comprehensive reform to New York’s nonprofit laws in over 40 years. If implemented, it will revitalize the nonprofit sector by substantially reducing burdens and costs on nonprofits and strengthening governance and accountability.

What does this have to do with risk and insurance? Simple, risk comes in all sizes and shapes. Insurance is just one way to transfer risk. However, not all risk can be transferred to insure such a legislative risk. It’s important that you engage with a risk advisor who works in the Non Profit industry instead of purchasing insurance through a broker who simply handles a transaction that deals with only a small part of your risk.

We think this report is a critical read for anyone who works in or leads a Non Profit in New York. Make sure to give the full report a read and as always contact us with any questions you may have on how this could affect your non profit.

The Basics of Your Directors & Officers Insurance Policy (D&O Insurance)

buy-do-insurance-to-cover-the-penalty

Federal regulatory agencies have been increasing investigations and enforcement in the past few years, and recent reforms in health care, banking, and consumer protection will likely generate new liabilities for companies.

Most mid-market for profit and not for profit businesses  carry some form of directors and officers liability insurance to protect the company and its executives in the event of a regulatory investigation or penalty. But those policies often have limits or exclusions to the coverage based on corporate structure, industry, and the nature of the investigation itself. Many companies that we have spoken to didn’t know how their D&O policies were structured.

Because insurance buyers at mid-market companies may not fully understand their D&O coverage, they expect that it’s all-inclusive, and that anything that comes about is going to be picked up. So when they receive a denial or a reservation of rights letter from the carrier, they are obviously surprised and disappointed.

Lets go over the basics:

  1. Costs from an investigation in which a company is merely a party of interest, and not the target of the investigation itself, are typically not covered by most D&O policies.
  1. Do not limit your coverage to any specific agency by listing them, as you could run into a problem with interpretation. If you’re investigated, but not by the particular named agency in the policy, the implication is that it’s not covered.
  1. Until recently, legal fees and other costs associated with an investigation prior to the issuance of a subpoena or official notice of an accusation, known as “pre-claim” costs, were the responsibility of the company or its directors. Private companies could only obtain coverage for costs after an official notice of investigation was received. Insurers have recently begun offering products to cover pre-claim costs in certain situations but have yet to form a comprehensive coverage package for costs on both sides of an official agency action.
  1. It would certainly benefit you to hire a lawyer before you sit down with any federal or state regulatory agency. Your policy may be limited to formal investigations only.  If so you may not be covered for costs, or at the very least you’re going to have a dispute over what constitutes a formal investigation.


Now that you know the basics, let’s go over some common mistakes that are made:

 

  1. One common mistake is failing to notify your broker/insurer when contacted by a regulator. Most policies have a fixed time period within which a client must report a claim. As a result failing to do so at the earliest possible opportunity could jeopardize coverage for the investigation and subsequent claims arising from the original event.
  1. Employers worried about their company’s profits may assume that simply fulfilling an agency’s initial request for information will satisfy their obligations under their D&O policy. Then they may decide not to report the contact to their insurer, hoping to improve their chances at favorable renewal rates.
  2. Employers sometimes struggle to file claims in a timely manner if their staff has not been properly instructed on the matter. The problem we see all the time is a human resource director often won’t know that they need to inform their CEO or CFO that they were contacted by a regulator, because that’s what triggers coverage.
  3. A final mistake lies in the selection of counsel once a director has been contacted by a regulator. Smaller companies often turn to an in-house legal adviser or an external general practice lawyer that they’ve worked with before. General business litigation experience likely will not prepare a company or its lawyers for the intricacies of regulatory investigations and the insurance policies that guard against the damage they can inflict.


We hope you come away from this article with a greater education on D&O Insurance policies. If you have any more questions on directors and officers insurance please feel free to contact one of our experts.

5 Ways to Get Facebook Likes for Your Non Profit

facebook

Why is a Facebook “like” important; because every like means another person receiving your status updates in their newsfeed. Every like means another person who can share a story with all of their friends. This is why likes grow exponentially, especially with non profits. People love to help, or at least feel like they are helping a great cause. This could be through donations or through awareness. To put it simply, with every like there is a greater chance of donations, participation, and ultimately exposure for your non profit all done on the cheap as it costs nothing but your time.

If you are still reading this then you agree that likes are important; but how do you get them? As I mentioned it’s a much easier feat for a non-profit than a for-profit business. Here are a few strategies to get lots of likes.

1. Email campaign – Simply ask your current contacts to “like” your page. If you’re new to using a mass email service, consider utilizing Mail Chimp’s “Forever Free Plan.” They say you get up to 2,000 subscribers and 12,000 emails per month for free.

2. Run a contest – To be eligible to win people must like the Facebook page. Give away an item or an experience to the lucky winner. We’ve seen groups raffle free ipads, but anything from t-shirts to water bottles could help.

3. Ask someone to match a donation – For every “like” the non-profit receives Person X will donate $1. Or maybe to put it differently, “If the Facebook page reaches 1000 followers Person X will make a $1000 donation.”

4. Create Interesting content that people will share – This is the most important thing you can do. Post photos of the great work you are doing. Write articles that your followers can share all over the web. Put videos on Youtube. Your work will spread naturally.

5. Write press releases – Media sources are always on the lookout for content, and non profit work is often an easy sell. Ask to include a mention about your Facebook page at the end of the article.

These were just a few ideas to get you started. Be creative, think outside of the box and be genuine. Good luck!

Using Facebook for Non Profit Fundraising

Every Non Profit business should be utilizing Facebook to some extent. It is a great tool to help with fundraising whether you collect your donations through it or not. The major benefits Facebook brings to your business are increased awareness and efficiency. In this article we will get those of you who do not currently utilize Facebook for fundraising started. Feel free to contact us with any questions you may have.

Step 1. Obviously step one is to create your Facebook page. Under “Company, Organization, or Institution,” make sure to categorize yourself as a “non profit.” Add a description about your cause, and start inviting employees, friends, family, etc. Gaining followers or “likes” is an exponential process so invite as many as you can to start out. Periodically ask for your fans to invite their friends to “like” your page.

Step 2. Setup a Paypal account if you don’t already have one. There are no startup, cancellation, monthly or annual fees.

“PayPal has partnered with FundRazr to bring you an app that helps raise money and awareness for causes you care about. Reach out to your friends on Facebook, your Website, blog and more. Get the FundRazr app now

It’s Shareable - Your friends can share your FundRazr with their friends. Before you know it, your cause can go viral.

It’s Easy to Donate - Friends can donate right from their Facebook News Feed, your Website, your blog-wherever they view your FundRazr.

It’s Flexible - You can personalize app content, colors and payment options. Add a picture or a video. FundRazr works for personal causes, groups and other organizations.

Pricing - No setup or monthly charges-there’s a fee per transaction. (Click the image below)”

You could skip the PayPal badge if you’d like and direct people to your website, or other methods that you currently use. This will avoid the transaction fees which can add up over time (See above). For example an employee of mine recently ran a charity hockey event for wounded veterans. Since it was just a one time event they created a Facebook page, invited hundreds and hundreds of people over time and directed most donations to at the door ticket sales, in game events, and old fashioned checks. They ended up raising over $12,000 in just about 1 month! They did sell some tickets and collect some donations ahead of time by using a site called ticketriver.com. Worth checking out if you plan to have an event where tickets are needed. They also take a transaction fee, but a smaller one than Paypal. The Facebook page became the source of information for media outlets and the hub for people to find out what was going on.

Step 3. Now that you have your page and possibly a means of collecting donations, the hard stuff is done. If you plan to hold charity/fundraising events, make sure to create a Facebook event (hosted by your business page) for EVERY event you are planning. To spare the length of this article here is a great resource on setting up a Facebook event.

Step 4. Continue to update your timeline with comments, LOTS of pictures and videos, and track your metrics. Finally, send a friendly email to your contact list asking for people to “like” your page.

We hope this is a good starting point for you if you haven’t yet thought about using Facebook for fundraising. We will add a few more articles on the subject. In the meantime, feel free to contact us with any questions.

Did You Know That Non Profits Can Avoid Unemployment Insurance?

In case you didn’t know, 501(c)(3) organizations are not obligated to pay unemployment taxes.  Non profit organizations typically are not aware of this option since the state unemployment office rarely provides this information. Nonprofits can choose to protect themselves by participating in a private unemployment trust such as The Nonprofit Trust. Funding unemployment obligations this way can help nonprofits substantially reduce their costs, especially if the organization has over $1,000,000 in payroll.

The option has existed since 1972 which was when nonprofits were required to provide unemployment benefits to their employees. They were given an option that the private sector does not have – Becoming a reimbursing employer.
.
Lets go in to a bit more detail. The employee laid off from a reimbursing employer still files a claim at the unemployment office and still receives checks from the department. The difference is a reimbursing employer does not pay unemployment taxes, but instead reimburses the state for actual unemployment claims paid on their behalf.
.
So the only change is in how the organization funds the benefit. Typically they fund it by paying the unemployment tax, but this is rarely the best way for a nonprofit organization to fund unemployment claims because of the following:
  1. Nonprofit employees often make less in wages yet nonprofit employers are still charged just as much, if not more, than private sector employers.
  2. Nonprofit employers tend to have more part-time labor which actually increases unemployment tax expenses.
  3. Nonprofits usually have lower unemployment claims than private sector employers.
Contact a Risk Advisor at Metropolitan Risk Advisory to get more information about the program as well as our other cost saving programs.
.
The tax system as a whole has contributed to the problem because:
  1. Due to the economy, unemployment taxes increased in 29 states last year. (Increases were as high as 161% in certain states).
  2. Over 25 state unemployment departments are now insolvent and borrowing money from the Fed. just to pay claims, increasing the need to increase tax rates. This number is expected to climb to nearly 40 by the end of 2011!
  3. States are overpaying claims in error by more than $1,000,000,000 per year!, and the problem is increasing due to the sheer volume of claims being processed due to the economy.
The Nonprofit Trust, mentioned above, offers your clients a safe, secure and cost effective alternative to the unemployment tax system in every state. In addition to the savings, the Nonprofit Trust offers a variety of services not available through State Tax systems:
  1. Savings average between 40% and 50% EVERY year.
  2. Claims administration handles all communications with the unemployment office including initial notifications, claims protests, hearing representation, etc., reducing staff time spent on unemployment, driving claims costs down by winning more cases than employers do on their own (94% vs. less than 50% for employers) and by auditing every single claim processed, catching overpayments made by the states and they are corrected.
  3. Free Human Resources Hotline that assists with any type of HR issue, not just unemployment related issues, which can save the nonprofit time and money in getting the answer they need.
Contact a Risk Advisor at Metropolitan Risk Advisory  to get more information about the program as well as our other cost saving programs for non profits.