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Importance of Medical Coding for Insurance

With health and diseases becoming a major issue these days around the world, it has become A LOT more important to have more and more coders involved in the medical field for insurance. But what is medical coding? A medical coder, clinical coding officer, or diagnostic coder are professionals involved in the health care sector who analyze clinical documents and using proper classification systems, assign standard codes to them. They provide medical coding guidelines and suggestions to help regulate the ways doctors, nurses, and other medical staff provide care for their patients. There are three main types of medical coding:

1) ICD (International Classification of Diseases): These are codes used for describing the cause of illness, injury, or death.

2) CPT (Current Procedural Terminology): These deal with anesthesia, surgery, pathology, radiology, measurement procedures, and new technological changes in the medical field.

3) HCPCS Healthcare Common Procedure Coding System): These include outpatient hospital care, medical aid, and Medicare.

Let us look at some points as to why coding is necessary for the medical field.

DATA SYSTEMS
When the coding is paired with the data systems of the hospitals, a powerful tool is made. By doing so, a large number of data from various hospitals, clinics, and other sources are stored, accessed, and used from one large online data system. This implementation helps in the transfer of any patient’s data from any hospital to another for any medical purpose. This information helps doctors to be more connected and make wiser decisions, especially in cases involving the life and death situation of the patient.

PATIENT CARE

Coding is very much required for reimbursements, which include submitting medical claims with insurance companies and bills between insurers and patients. The transfer of information for bill related purposes requires medical records, patient’s medical needs, lab results, pathology records (if any), and any other related documents. Appropriate payment is possible only when the required diagnostic codes are put in place, which also means to verify in case the medical claim is denied by the insurance company.

REGULATIONS

Medical billing and coding fall under the rules and guidelines of many countries and states. Coders in this field are also responsible for protecting the privacy of the patients and their families. They are supposed to take safeguards to preserve the confidential details concerning the patient and his/her medical background in a safe place. Electronic medical records fall under the International Classification of Diseases (ICD-10) codes issued by the World Health Organization (WHO).

Medical coding analysts are in the front line in healthcare data analytics. They work in many types of healthcare setups and not necessarily in hospitals and clinics. Their valuable service is very functional for research and development in the medical field.

 

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How to Select Your Insurance Advisor?

You must opt for a life insurance policy. If your finances allow, you must also get health insurance as well as home insurance. This way you would be able to save yourself from any sudden financial crisis. However, you need the best of persons when it comes to an insurance advisor. In this article, we will take you through five steps to hire the best LIC advisor in Delhi.

1. Always prefer a certified advisor

Your insurance advisor must have proper certification from the Insurance Regulatory and Development Authority (IRDA). This proves that he/she is not there to trick you or fraud you. Moreover, the guidelines laid down by this agency make sure that you are protected on all fronts. If a person is not certified by IRDA, legally he is not entitled to advise people on insurance. He may end up in jail. Therefore, before selecting an agent, make sure that he/she has all the necessary certifications.

2. He must be through with investment solutions

You must understand that insurance agents are much more than just a salesman. They must have a proper understanding of financial planning. They should be equipped with all the necessary information about the financial world, both domestic as well as globally. More importantly, your LIC advisor should have a proper understanding of your family and financial standing. This way he would be able to suggest you the best insurance for you. It is advised that you should first develop a good friendship with the advisor and only then allow him to enter your financial realm.

3. He must have a complete understanding of the product he wants to sell

The insurance advisor must have a thorough knowledge of all the insurance policies that his/her company sells. You should sit down and have a long conversation with him about the pros and cons of various policies. You must understand that every insurance company sells a hell lot of policies. Not all policies are meant for you. Your insurance advisor must suggest you the best policy for yourself after understanding your family and finances.

4. Does the follow-up?

He/she is a cheap insurance advisor if he/she forgets you after you have bought the insurance policy. This is not what a responsible advisor does. Even after you have bought the policy, you may have a hell lot of questions to be answered. He/she must update you about the product premium and all the necessary details to make the best of your insurance.

5. He must help you while fulfilling your claim

When a claim arises, an advisor plays a very important role. He is the sole contact person between the insurance provider and the policyholder. He must understand all the formalities that need to be fulfilled for a successful claim. If your claim is denied there was no point in opting for that insurance policy. A good insurance advisor will stand by you when you need him/her the most.

Everyone thinks that an insurance advisor is just another salesman. However, this is far from being the truth. He/she is a person who will be standing with you at the time of utmost importance. This is the reason you should research extensively before selecting best LIC advisor in Delhi. This short guide would be helpful in the same.

 

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GREAT Scholarship Justice and Law 2022 at University of Westminster, UK

University of Westminster in collaboration with the UK government’s GREAT Britain campaign and the British Council is currently offering a £10,000 tuition fee scholarship opportunity to international students who want to pursue their studies at the institution.

Application Deadline: 13 June 2022.

GREAT Scholarship Justice and Law 2022 at University of Westminster, UK

Eligible Countries: Nigeria

Type: Masters

Value of Award: £10,000

Number of Awards: 1

Eligible Field of Studies: Master’s course in Law offered by the University of Westminster.

Eligibility: To be eligible, you must;

  • be Nigerians
  • hold an offer for a full-time master’s course in Law starting in September 2022 at the University of Westminster.
  • have a Minimum UK equivalent 2.1 Honours degree
  • be proficient in English Language

Application Process: Interested applicants are advised to complete application form including any required supporting evidence as PDF attachments to m.parzych01@westminster.ac.uk

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Athletic Scholarships at University of the Pacific, USA – 2022

The University of the Pacific, USA is pleased to offer scholarships to international students who want to undertaken a degree program at the Institution.

Why choose to study at the University of the Pacific? The University of Pacific aims to provide a superior, student-centered learning experience integrating liberal arts and professional education.

 

Application Deadline: 21st June 2022.

Eligible Countries: International

Type: Undergraduate

Value of Award: Tuition fee

Number of Awards: Not Mentioned

Eligibility:

  • You must be international students.
  • You must submit scores of the following English language proficiency tests:
    • TOEFL IBT – 80
    • TOEFL PBT – 550
    • IELTS – 6.5
    • Duolingo – 110

Application Process: You can apply for admission via the student portal of the university or the Common Application portal.

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2022 Creative Biolabs Scholarship for International Students – USA

The Creative Biolabs scholarship is open for application. This scholarship opportunity is valued at $1,000 and will be awarded to an outstanding student.

Application Deadline: September 30, 2022. 

2022 Creative Biolabs Scholarship for International Students - USA

Eligible Countries: International

Type: Undergraduate, Graduate, or PhD degree

Value of Award: $1,000

Number of Awards: One

Eligible Field of Studies: Undergraduate, graduate, or PhD in a science-related field such as Biology, Biochemistry, Chemistry, and Molecular Biology offered by the university.

Eligibility: 

  • You must be enrolled as a freshman, undergraduate, graduate, or Ph.D. student at an accredited college or university.
  • You must Major in a science-related field such as Biology, Biochemistry, Chemistry, and Molecular Biology.
  • You must have a cumulative average grade of a B (3.0 GPA).
  • You must demonstrate that they have a good level of written and spoken English.

Application Process: You must download and fill out the 2022 Creative Biolabs Scholarship Application and the recommendation letter. Then you should email the following documents to marketing@creative-biolabs.com with the “2022 Creative Biolabs Scholarship Application-Full Name”.

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IT Outsourcing Jobs In Canada

Software companies are required to produce lots of software products for their clients. These software products being used for giant organizations such as airlines, banks, financial institutions, big corporate houses and various government bodies, where lots of data being stored and updated every day. IT (Information Technology) software companies in US, Canada and Europe who are taking up these projects require massive investment in infrastructure as well as huge manpower to work on them.

This is competitive world and every industry wants to be very competitive in every business. So is IT software industry. To cut the labor costs, IT software companies are increasingly outsourcing their jobs to developing countries in Asia, Latin American, Africa and Middle East. Since “cost saving” is the prime objective of IT software firms, it is estimated nearly 50% of IT software jobs being outsourced to developing nations..

Most of the jobs outsourced are creating software in .Net, Java/J2EE, database solutions, smartcard solution and wireless/mobile application developments. BPO (Business Process Outsourcing) are also helping their foreign clients in voice and non-voice solutions, customer care, data management and so on. Outsourcing firms hire well educated English speaking young staff, who are energetic and willing to work in shifts. These outsourcing companies charge very economical hourly rates and most of them are working even less than $7/- per hour, which is much lower than standard hourly charges in U.S.

India has taken the lead in IT outsourcing jobs. Its Bangalore city is now said to be Mecca of IT industry. With favorable government policies and substantial investment in infrastructure are making India as the great attraction for IT software outsourcing jobs. By outsourcing their IT jobs to India, U.S., Canadian and European companies will not only save labor costs but this will also help them to be more competitive, concentrate more on core competent areas and enjoy tax benefits. Once the IT software jobs are outsourced, companies can concentrate on marketing, advertising, launching of new products, finding new customers and so on.

 

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Job Opportunity – Free Visa to Europe

Vocational education is a preparation for the skilled jobs, this is the preparation based on manual and practical activities. The learner directly participates and develops expertise in a particular group of techniques or technology and sometimes referred as technical education.

In Philippines, Vocational/Technical Schools and their curriculum were accredited and approved by Technical Education Skills and Development Authority (TESDA). Schools affiliated by TESDA offers a short course that will last for 3 months and for 2 years. Upon the graduation, the students take the licensure examination from TESDA to obtain a certificate or diploma. Some courses for this are automotive technology, electronic technology, nursing aide, hotel and restaurant management, computer technology, drafting. Short courses may choose from housekeeping, culinary, food and beverages, welders, etc. Before, these vocational courses associated with the activities of lower social classes. But not for now, as Vocational Education has been developed and opened a lot of potential jobs and opportunities locally and abroad.

 

As a matter of fact, if you will try to search a job online, you will notice that there are wide list of skilled jobs vacancies on certain job sites. Countries like Australia, UK, Canada, Middle-East’s countries are in high demands for skilled workers. The problem for this, is most of the skilled workers can’t afford the high placement fees and papers processing of the job agencies. Good news, that there’s a few that offers a salary deduction. The other thing is you can search for a job site that will give you the information of the employers, through this, you can apply directly.

Nowadays, we are experiencing and battling on crisis. Many companies had been closed due to recession. Thousands of people lost their jobs. Even the OFW’s are affected. Vocational trainings and education had been the answer for them to start a new career. Government released a scholarship program for out-of-school youth and for the students that cannot continue their college. This scholarship has been the demand of many parents. Many believe that diploma and certificate from short courses can be use in advantage and for competencies.

Preparing yourself for skilled workers opportunities means a better chance of rewarding and well-paying career that you can be proud of.

Did you like reading this article? Have you learned from this?

 

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A Brief Introduction to Captive Insurance

Over the past 20 years, many small businesses have begun to insure their own risks through a product called “Captive Insurance.” Small captives (also known as single-parent captives) are insurance companies established by the owners of closely held businesses looking to insure risks that are either too costly or too difficult to insure through the traditional insurance marketplace. Brad Barros, an expert in the field of captive insurance, explains how “all captives are treated as corporations and must be managed in a method consistent with rules established with both the IRS and the appropriate insurance regulator.”

According to Barros, often single parent captives are owned by a trust, partnership or other structure established by the premium payer or his family. When properly designed and administered, a business can make tax-deductible premium payments to their related-party insurance company. Depending on circumstances, underwriting profits, if any, can be paid out to the owners as dividends, and profits from liquidation of the company may be taxed at capital gains.

Premium payers and their captives may garner tax benefits only when the captive operates as a real insurance company. Alternatively, advisers and business owners who use captives as estate planning tools, asset protection vehicles, tax deferral or other benefits not related to the true business purpose of an insurance company may face grave regulatory and tax consequences.

Many captive insurance companies are often formed by US businesses in jurisdictions outside of the United States. The reason for this is that foreign jurisdictions offer lower costs and greater flexibility than their US counterparts. As a rule, US businesses can use foreign-based insurance companies so long as the jurisdiction meets the insurance regulatory standards required by the Internal Revenue Service (IRS).

There are several notable foreign jurisdictions whose insurance regulations are recognized as safe and effective. These include Bermuda and St. Lucia. Bermuda, while more expensive than other jurisdictions, is home to many of the largest insurance companies in the world. St. Lucia, a more reasonably priced location for smaller captives, is noteworthy for statutes that are both progressive and compliant. St. Lucia is also acclaimed for recently passing “Incorporated Cell” legislation, modeled after similar statutes in Washington, DC.

Common Captive Insurance Abuses; While captives remain highly beneficial to many businesses, some industry professionals have begun to improperly market and misuse these structures for purposes other than those intended by Congress. The abuses include the following:

1. Improper risk shifting and risk distribution, aka “Bogus Risk Pools”

2. High deductibles in captive-pooled arrangements; Re insuring captives through private placement variable life insurance schemes

3. Improper marketing

4. Inappropriate life insurance integration

Meeting the high standards imposed by the IRS and local insurance regulators can be a complex and expensive proposition and should only be done with the assistance of competent and experienced counsel. The ramifications of failing to be an insurance company can be devastating and may include the following penalties:

1. Loss of all deductions on premiums received by the insurance company

2. Loss of all deductions from the premium payer

3. Forced distribution or liquidation of all assets from the insurance company effectuating additional taxes for capital gains or dividends

4. Potential adverse tax treatment as a Controlled Foreign Corporation

5. Potential adverse tax treatment as a Personal Foreign Holding Company (PFHC)

6. Potential regulatory penalties imposed by the insuring jurisdiction

7. Potential penalties and interest imposed by the IRS.

All in all, the tax consequences may be greater than 100% of the premiums paid to the captive. In addition, attorneys, CPA’s wealth advisors and their clients may be treated as tax shelter promoters by the IRS, causing fines as great as $100,000 or more per transaction.

Clearly, establishing a captive insurance company is not something that should be taken lightly. It is critical that businesses seeking to establish a captive work with competent attorneys and accountants who have the requisite knowledge and experience necessary to avoid the pitfalls associated with abusive or poorly designed insurance structures. A general rule of thumb is that a captive insurance product should have a legal opinion covering the essential elements of the program. It is well recognized that the opinion should be provided by an independent, regional or national law firm.

Risk Shifting and Risk Distribution Abuses; Two key elements of insurance are those of shifting risk from the insured party to others (risk shifting) and subsequently allocating risk amongst a large pool of insured’s (risk distribution). After many years of litigation, in 2005 the IRS released a Revenue Ruling (2005-40) describing the essential elements required in order to meet risk shifting and distribution requirements.

For those who are self-insured, the use of the captive structure approved in Rev. Ruling 2005-40 has two advantages. First, the parent does not have to share risks with any other parties. In Ruling 2005-40, the IRS announced that the risks can be shared within the same economic family as long as the separate subsidiary companies ( a minimum of 7 are required) are formed for non-tax business reasons, and that the separateness of these subsidiaries also has a business reason. Furthermore, “risk distribution” is afforded so long as no insured subsidiary has provided more than 15% or less than 5% of the premiums held by the captive. Second, the special provisions of insurance law allowing captives to take a current deduction for an estimate of future losses, and in some circumstances shelter the income earned on the investment of the reserves, reduces the cash flow needed to fund future claims from about 25% to nearly 50%. In other words, a well-designed captive that meets the requirements of 2005-40 can bring about a cost savings of 25% or more.

While some businesses can meet the requirements of 2005-40 within their own pool of related entities, most privately held companies cannot. Therefore, it is common for captives to purchase “third party risk” from other insurance companies, often spending 4% to 8% per year on the amount of coverage necessary to meet the IRS requirements.

One of the essential elements of the purchased risk is that there is a reasonable likelihood of loss. Because of this exposure, some promoters have attempted to circumvent the intention of Revenue Ruling 2005-40 by directing their clients into “bogus risk pools.” In this somewhat common scenario, an attorney or other promoter will have 10 or more of their clients’ captives enter into a collective risk-sharing agreement. Included in the agreement is a written or unwritten agreement not to make claims on the pool. The clients like this arrangement because they get all of the tax benefits of owning a captive insurance company without the risk associated with insurance. Unfortunately for these businesses, the IRS views these types of arrangements as something other than insurance.

Risk sharing agreements such as these are considered without merit and should be avoided at all costs. They amount to nothing more than a glorified pretax savings account. If it can be shown that a risk pool is bogus, the protective tax status of the captive can be denied and the severe tax ramifications described above will be enforced.

It is well known that the IRS looks at arrangements between owners of captives with great suspicion. The gold standard in the industry is to purchase third party risk from an insurance company. Anything less opens the door to potentially catastrophic consequences.

Abusively High Deductibles; Some promoters sell captives, and then have their captives participate in a large risk pool with a high deductible. Most losses fall within the deductible and are paid by the captive, not the risk pool.

These promoters may advise their clients that since the deductible is so high, there is no real likelihood of third party claims. The problem with this type of arrangement is that the deductible is so high that the captive fails to meet the standards set forth by the IRS. The captive looks more like a sophisticated pre tax savings account: not an insurance company.

A separate concern is that the clients may be advised that they can deduct all their premiums paid into the risk pool. In the case where the risk pool has few or no claims (compared to the losses retained by the participating captives using a high deductible), the premiums allocated to the risk pool are simply too high. If claims don’t occur, then premiums should be reduced. In this scenario, if challenged, the IRS will disallow the deduction made by the captive for unnecessary premiums ceded to the risk pool. The IRS may also treat the captive as something other than an insurance company because it did not meet the standards set forth in 2005-40 and previous related rulings.

Private Placement Variable Life Reinsurance Schemes; Over the years promoters have attempted to create captive solutions designed to provide abusive tax free benefits or “exit strategies” from captives. One of the more popular schemes is where a business establishes or works with a captive insurance company, and then remits to a Reinsurance Company that portion of the premium commensurate with the portion of the risk re-insured.

Typically, the Reinsurance Company is wholly-owned by a foreign life insurance company. The legal owner of the reinsurance cell is a foreign property and casualty insurance company that is not subject to U.S. income taxation. Practically, ownership of the Reinsurance Company can be traced to the cash value of a life insurance policy a foreign life insurance company issued to the principal owner of the Business, or a related party, and which insures the principle owner or a related party.

1. The IRS may apply the sham-transaction doctrine.

2. The IRS may challenge the use of a reinsurance agreement as an improper attempt to divert income from a taxable entity to a tax-exempt entity and will reallocate income.

3. The life insurance policy issued to the Company may not qualify as life insurance for U.S. Federal income tax purposes because it violates the investor control restrictions.

Investor Control; The IRS has reiterated in its published revenue rulings, its private letter rulings, and its other administrative pronouncements, that the owner of a life insurance policy will be considered the income tax owner of the assets legally owned by the life insurance policy if the policy owner possesses “incidents of ownership” in those assets. Generally, in order for the life insurance company to be considered the owner of the assets in a separate account, control over individual investment decisions must not be in the hands of the policy owner.

The IRS prohibits the policy owner, or a party related to the policy holder, from having any right, either directly or indirectly, to require the insurance company, or the separate account, to acquire any particular asset with the funds in the separate account. In effect, the policy owner cannot tell the life insurance company what particular assets to invest in. And, the IRS has announced that there cannot be any prearranged plan or oral understanding as to what specific assets can be invested in by the separate account (commonly referred to as “indirect investor control”). And, in a continuing series of private letter rulings, the IRS consistently applies a look-through approach with respect to investments made by separate accounts of life insurance policies to find indirect investor control. Recently, the IRS issued published guidelines on when the investor control restriction is violated. This guidance discusses reasonable and unreasonable levels of policy owner participation, thereby establishing safe harbors and impermissible levels of investor control.

The ultimate factual determination is straight-forward. Any court will ask whether there was an understanding, be it orally communicated or tacitly understood, that the separate account of the life insurance policy will invest its funds in a reinsurance company that issued reinsurance for a property and casualty policy that insured the risks of a business where the life insurance policy owner and the person insured under the life insurance policy are related to or are the same person as the owner of the business deducting the payment of the property and casualty insurance premiums?

If this can be answered in the affirmative, then the IRS should be able to successfully convince the Tax Court that the investor control restriction is violated. It then follows that the income earned by the life insurance policy is taxable to the life insurance policy owner as it is earned.

The investor control restriction is violated in the structure described above as these schemes generally provide that the Reinsurance Company will be owned by the segregated account of a life insurance policy insuring the life of the owner of the Business of a person related to the owner of the Business. If one draws a circle, all of the monies paid as premiums by the Business cannot become available for unrelated, third-parties. Therefore, any court looking at this structure could easily conclude that each step in the structure was prearranged, and that the investor control restriction is violated.

Suffice it to say that the IRS announced in Notice 2002-70, 2002-2 C.B. 765, that it would apply both the sham transaction doctrine and §§ 482 or 845 to reallocate income from a non-taxable entity to a taxable entity to situations involving property and casualty reinsurance arrangements similar to the described reinsurance structure.

Even if the property and casualty premiums are reasonable and satisfy the risk sharing and risk distribution requirements so that the payment of these premiums is deductible in full for U.S. income tax purposes, the ability of the Business to currently deduct its premium payments on its U.S. income tax returns is entirely separate from the question of whether the life insurance policy qualifies as life insurance for U.S. income tax purposes.

Inappropriate Marketing; One of the ways in which captives are sold is through aggressive marketing designed to highlight benefits other than real business purpose. Captives are corporations. As such, they can offer valuable planning opportunities to shareholders. However, any potential benefits, including asset protection, estate planning, tax advantaged investing, etc., must be secondary to the real business purpose of the insurance company.

Recently, a large regional bank began offering “business and estate planning captives” to customers of their trust department. Again, a rule of thumb with captives is that they must operate as real insurance companies. Real insurance companies sell insurance, not “estate planning” benefits. The IRS may use abusive sales promotion materials from a promoter to deny the compliance and subsequent deductions related to a captive. Given the substantial risks associated with improper promotion, a safe bet is to only work with captive promoters whose sales materials focus on captive insurance company ownership; not estate, asset protection and investment planning benefits. Better still would be for a promoter to have a large and independent regional or national law firm review their materials for compliance and confirm in writing that the materials meet the standards set forth by the IRS.

The IRS can look back several years to abusive materials, and then suspecting that a promoter is marketing an abusive tax shelter, begin a costly and potentially devastating examination of the insured’s and marketers.

The IRS is aware that several large insurance companies are promoting their life insurance policies as investments with small captives. The outcome looks eerily like that of the thousands of 419 and 412(I) plans that are currently under audit.

Abusive Life Insurance Arrangements; A recent concern is the integration of small captives with life insurance policies. Small captives treated under section 831(b) have no statutory authority to deduct life premiums. Also, if a small captive uses life insurance as an investment, the cash value of the life policy can be taxable to the captive, and then be taxable again when distributed to the ultimate beneficial owner. The consequence of this double taxation is to devastate the efficacy of the life insurance and, it extends serious levels of liability to any accountant recommends the plan or even signs the tax return of the business that pays premiums to the captive.

 

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Global Explorer Scholarships at Linn–Benton Community College, USA 2022

Insurance solutions for businesses operating in the Marine Leisure Sector have been slow to evolve compared to other sectors. Until relatively recently, a boatyard owner could find him/herself having to source a suite of insurance products to cover buildings, contents, financial risks, vessels, pontoons and indemnity against a range of legal liabilities. Whilst the first Marine Traders “Combined” policy that provided cover for all these risks appeared in the late 1990s, the market did not rush to embrace the new paradigm. Some significant providers of insurance in this Sector did not release a “Combined” solution until as late as 2007 and others still only offer stand-alone covers.

Advantages of Combined Insurance Policies

There are numerous advantages to business owners of having a single insurance policy that combines cover in respect of the majority of their needs. First and foremost it streamlines administrative processes by reducing documentation considerably, thus saving business owners time and money. It also ensures the owner has a single renewal date to deal with. Probably the main benefit to businesses is the potential premium savings that can be made through this type of system: the more cover that can be placed on a single policy gives the provider more scope to reduce the overall insurance premium.

Marine Trades Insurance Providers

Combined Insurance policies for marine-related businesses are now available from a number of specialist providers. Whilst the majority of these providers will deal direct with the public, some will deal only through insurance brokers. An insurance provider that sells direct to the public will only offer their own product. Dealing directly with insurers not only restricts you in terms of available insurance options, it also means you have to invest valuable time in shopping around providers for competitive quotations. An independent specialist Marine Trades Insurance broker can potentially save you and your business time and money by conducting a full broking exercise across the market on your behalf.

Specialist brokers can also assist in arranging bespoke cover as opposed to a standard “off-the-peg” solution. This can give your business vital benefits where standard policy exclusions are amended or removed, widening the overall scope of protection. You may also benefit in the event of a claim:

 

  • Where a business buys direct from an insurer, in the event of a claim the owner is left to negotiate a settlement from the insurer. This can put the business at a disadvantage where there is a dispute over liability or settlement. Using an independent specialist broker to arrange cover provides the business owner with an experienced advocate in the event of suffering a claim. The broker is bound to act in the best interests of the client at all times and a specialist broker can often assist in instances where claims have initially been repudiated.

 

Structure of Marine Combined Insurance Policies

Before outlining the structure of a policy it is necessary to stress the importance of ensuring that the correct limits of indemnity form the basis of your insurance cover. It is tempting for businesses seeking to reduce their costs to deliberately underinsure their businesses. This can potentially prove catastrophic in the event of a loss, as an insurer will almost certainly invoke the principle of “Average” when underinsurance is discovered.

 

  • The Principle of Average: In the event of underinsurance any claim settlement will be based on the ratio of the sum insured to actual value. For example, where a business has insured stock worth £100,000 for only £50,000, the business has underinsured by 50%. In the event of a loss of £25,000, the insurer will apply average and only pay a settlement of £12,500.

 

The example above underlines the importance for businesses to establish the correct basis of cover with their provider and then negotiate a competitive premium. An independent specialist broker with access to a number of alternative markets will help you obtain the right solution at the best available premium.

Marine Trades Combined Insurance policies generally follow the same model, with the odd exception as to where a particular item may appear. For example, some policies will include pontoons in the Material Damage Section whilst others may bracket them in the Marine Section. Outlined below is a typical policy structure:

 

  • Material Damage: This Section will cover all property other than vessels at your business premises. It is split into various sub-sections that vary from provider to provider, but the splitting of property into these sub-sections enables you to benefit from lower premium rates on the lower risk items to be covered. Typically, a Material Damage Section will be divided as follows:

 

 

  • Buildings (with or without subsidence cover)
  • Marine Installations (pontoons, slipways, wet/dry docks etc)
  • Computers and Associated Equipment (at the business’ premises)
  • Machinery and Equipment (at the business’ premises)
  • General Stock (at the business’ premises)
  • Valuable & Attractive Stock (at the business’ premises)
  • All Other Contents (at the business’ premises)
  • Glass: Some insurers will include Glass within the cover for Buildings. However, most Marine Trade insurers will not cover Glass unless specifically requested and will also levy an additional premium. Cover will be provided for external and internal glass with additional extensions available for items such as glass signage and sanitary ware.

 

 

  • All Risks Cover: Must be obtained for businesses wishing to insure items they remove from the business’ premises such as:
  • Tools & Machinery
  • Laptop Computers, Mobile ‘Phones etc
  • Trailers (thease can also be covered under the Marine Section)
  • Frozen Food: Covers loss or damage to fuel resulting from change in temperature in fridges or freezers resulting from breakdown or interruption to power supply.

 

 

  • Goods in Transit: Protects against loss of goods whilst in transit or whilst temporarily stored in the course of transit. Business owners need to beware of the variation in scope of cover from policy to policy and of the plethora of exclusions that each insurer applies to cover.

 

 

  • The premium for Goods in Transit insurance is based on a combination of the total sum insured per vehicle, the number of vehicles used and the estimated total annual carryings of the business.

 

 

  • This Section can also be extended to insure postal sendings and carriage by third parties.

 

 

  • Goods in Transit cover for vessels is excluded on many policies unless specifically mentioned. However, it is possible to include insurance for vessels whilst in transit by endorsing the Marine Section of the policy. Organising a policy in this way can save a business money if vessels are the only items to be insured whilst in transit.

 

 

  • Exhibitions: Covers exhibits, stands and other materials at exhibitions.

 

 

  • Whilst insurers include this Section within their policies, a business could reduce costs by having the Marine Section of their policy endorsed to cover vessels at exhibitions rather than pay their insurers an additional premium for the same benefit.

 

 

  • Business Interruption: Covers the loss of Gross Profit and/or the Additional Cost of Working in the event of the trading activities of a business being interrupted by an insured peril, such as fire or flood. Extensions can be purchased to cover losses arising from perils such as:

 

 

  • Breach of Canal
  • Damage in the vicinity of Premises or to Contract or Exhibition Sites
  • Denial of Access to the vicinity of Premises
  • Damage to Moulds, Patterns, Jigs, Dies, Tools, Plans, Designs, etc
  • Loss or Damage to Property stored in locations other than own premises
  • Loss or Damage to Property in Transit
  • Damage to Premises of Suppliers or Customers
  • Loss of Utilities
  • Disease & Illness

 

 

  • Just as it is essential to insure property on the correct basis to avoid insurers applying “Average” in the event of a claim, it is vital to ensure the correct level of Gross Profit is used to determine Business Interruption cover.

 

 

  • The definition of Gross Profit in insurance terminology differs from that of accountancy. A business should always check with its provider as to the exact terms of their Business Interruption policy but the procedure below provides a general system that should fit most insurers’ methodology:

 

 

  • Obtain the income statement for the last full operating month and locate the net profit amount.
  • Employers Liability Tracing Office

  • Review each individual expense line item on the income statement to identify costs of operation that are not directly related to production, also referred to as “standing charges.” For example, office rent is due whether the business is in operation or not, and the price does not fluctuate based on production, whereas some worker salaries (such as casual, seasonal labour) would cease when trading is interrupted.
  • Employers Liability Tracing Office

  • Add each standing expense identified in Step 2 to the net profit obtained in Step 1 to obtain gross profit, or the company’s loss from lack of operations.

 

 

  • Money: Provides insurance for cash, cheques etc whilst on premises, in transit or in bank night safes. Some policies will also provide extensions for money in directors’ homes and at exhibition or contract sites. Policies will usually provide a Personal Accident extension that offers nominal sums in the event of Death or Disability arising from assault during attempted robbery or theft.

 

 

  • Defective Title of Vessels: Reimburses the purchase price of a vessel bought or sold by a business in the event of the true owner of the vessel reclaiming it (or its value). It will also provide indemnity where a business has a valid claim brought against it as a result of being unable to provide good title for the vessel.

 

 

  • Employers Liability: It is a statutory requirement for all businesses to carry Employers Liability Insurance where they employ people be it on a paid or voluntary basis. It indemnifies the business in respect of its liabilities arising from death, injury or illness to its employees

 

 

  • Premium is based on the total annual wages of the business. Each occupation within a business’ workforce will attract its own premium rating based on the perceived hazards associated with that particular occupation. A rigger, for example, will attract a higher premium rating than an employee engaged in light yard work.

 

 

  • You should ensure you accurately declare your annual wageroll to insurers. Deliberately under-declaring could be construed as failing to disclose a material fact and may result in a claim being repudiated.

 

 

  • Labour only sub-contractors should be treated as Employees as far as insurance is concerned. Generally they work under the direction of the Insured and do not provide their own materials or tools (with the exception of small hand tools). Cover would therefore be arranged for such individuals by the hiring business under the Employers Liability Section of their policy.

 

 

  • There is a requirement that businesses must confirm their Employers Reference Number (ERN) or as it is commonly known Employers PAYE Reference to the insurer covering the Employers Liability which is recorded centrally with the Employers Liability Tracing Office (ELTO). This is to ensure that the correct insurer can be identified where claims are submitted by an individual, which can be years after their employment has ceased. It is not unusual, for example, for certain diseases or conditions such as respiratory disease, industrial deafness or repetitive strain injury to take many years to manifest.

 

 

  • The ERN is the unique reference which attaches to a business and does not change which means that it will identify the correct employer and then the insurer for any given time period from 2011 onwards.

 

 

  • Public Liability: Indemnifies your legal liabilities to third parties arising from your business activities that result in death or injury to any person or loss of or damage to property. The insurance only attaches to those activities disclosed to your insurer and noted on your schedule so it is essential that a full description of all your business activities is provided.

 

 

    • Premium is based on the estimated annual turnover of the business. Each activity will attract its own premium rating based on the perceived hazards associated with that particular activity. Paint Spraying, for example, will attract a higher premium rating than Chandlery Sales.

 

  • You should ensure you accurately declare your annual turnover. Deliberately under-declaring could be construed as failing to disclose a material fact and may result in a claim being repudiated.

 

 

  • Exclusions and Extensions to Public Liability Insurance vary from insurer to insurer. For example, some policies will automatically provide Yachtyard Liability Insurance as a standard extension to their Public Liability cover. Others will charge an additional premium for Yachtyard Liability.

 

 

  • Liability in respect of hiring-in of cranes is normally excluded on most Marine Trade policies unless specifically requested. The additional premium for this cover is based on your estimated annual hiring-in costs. Standard cover is usually £100,000 which may not be adequate to replace the crane you hire. Find out what your exposures are and get your cover topped-up if necessary.

 

 

  • Yachtyard Liability: Protects your liabilities in respect of moving vessels on water for reasons such as testing, demonstration and deliveries. Like most policy sections, scope of cover will vary from insurer to insurer. For example, policies will restrict your permitted range, but distance you are permitted will vary greatly.

 

 

  • Not all insurers provide this cover under the “Yachtyard Liability” heading. Some insurers will provide “General Liability” that will automatically encompass the Yachtyard Liability element of other policies.

 

 

  • Products Liability: Insures your legal liabilities in respect of the products you manufacture and/or supply.

 

 

  • Whether you are manufacturing or distributing (wholesale or retail), you need to make sure the products you supply are safe. Failing to meet your responsibilities can have serious consequences. You could face legal action with possible fines or even imprisonment. You could also be sued by anyone who has been injured or has suffered damage to personal property as a result of using your product.

 

 

  • Products Efficacy Insurance: Designed to cover the failure of an item to perform its intended function Efficacy Insurance is often excluded from the Public & Products Liability Sections of Marine Trade policies. If your business is involved in the manufacture, supply or installation of performance critical products you need to check with your insurance provider to ensure you and your business have the right scope of Liability Insurance.

 

 

  • Marine Risks: Non-Marine Commercial policies have virtually no insurance provision for vessels. They are specifically excluded, with the odd exception such as rowing boats. The Marine Section of a specialist Trader’s policy is divide into 3 distinct parts:

 

 

  • 1. Vessels: This part of the Marine Section will cover all vessels not undergoing construction and includes Stock Vessels, Work Boats, your Private Craft and Charter Vessels. It can also be extended to cover other types of Marine Stock such as engines and parts.

 

 

  • Sums Insured for vessels are usually determined on an “Agreed Value” basis. This can be the price you paid for the vessel plus the cost of any improvements, or it can be a depreciated or written-down value
  • The cruising range of your vessels will be clearly defined in this Section of your policy. You should check to ensure that you and your hirers are actually insured to sail or cruise to your intended destinations. For example, an insurer may assume that, if you are based on the Thames, you are only on the non-tidal stretch and will endorse your policy for”Inland Waterways” use only.

 

 

  • The are several extensions that can be purchased for this part of your policy such as:

 

 

  • Social use of vessels by Directors, Employees, Family Members.
  • Racing Risks (Sails, Masts, Spars & Rigging).
  • Water Skiing, Towing of Toys.
  • Angling and/or Diving Parties.
  • Personal Possessions

 

 

  • Exclusions in respect of vessels will vary from policy to policy. You should ask your provider to go over any exclusions with you in detail in case you require a special endorsement or extension.

 

 

  • 2. Builders Risks: Whilst scope and definitions may differ from one insurer to another, Builders Risks insurance will usually cover your vessel at the yard or dock where it is being constructed, including the yard or premises of a subcontractor. It may also cover the vessel whilst in transit between your yard and your subcontractor’s yard. Extensions can also be obtained to cover:

 

 

  • Movement of the vessel on water around the dock where it is being built.
  • Sea Trials
  • Delivery voyages under own power
  • If the vessel in build is being towed on the water a special extension is usually required to insure this activity.

 

 

  • The premium for this Section is based on a combination of the maximum completion value of an in-build vessel and the maximum value of vessels in-build at any one time.

 

 

  • 3. Marine Third Party Liability: This insurance is an extension of the Vessels Section and covers your legal liabilities in respect of your interest in or use of your vessels by your skipper and crew. The usual limit of indemnity provided is £3,000,000 but higher levels of cover can be purchased where required.

 

Policy Conditions, Exclusions and Warranties

As detailed above, policy conditions and exclusions will vary from insurer to insurer. Even if you are purchasing your policy by telephone you should always ask your provider to go through them with you in addition to any warranties that will have been imposed. There are significant differences between each of these:

 

  • Conditions: Policy conditions basically set out a code of conduct you’re your business and also outline duties and obligations required for cover to be in effect. If policy conditions are not met, the insurer can deny a claim specific to that condition.

 

 

  • Eg. A theft from a business premises is discovered and not reported to the insurer for a month. If there is a policy condition that all losses must be reported within 7 days, the insurer could refuse to pay the claim.

 

 

  • Exclusions: An exclusion actually removes cover from the insurance policy.

 

 

  • Eg. Boats are excluded from the Goods in Transit Section of a Marine Trades Policy unless an endorsement is put into effect.

 

 

  • Warranties: A policy warranty is an instruction by the insurer that must be carried out by the insured. For example, the business may be warranted to work on vessels worth no more than £500,000. In such a case, if the business worked on a more valuable vessel then it would be in breach of warranty.

 

 

  • The breach of a warranty by a business would enable an insurer to void the whole policy. In the above example, if the business owner suffered a theft of outboard engines, the insurer could void the policy on the grounds that the business had breached a warranty – even though that warranty was totally unrelated to the theft.

 

 

  • As you can see, warranties can potentially have a huge impact on your business. You should ensure your insurance provider goes through each warranty with you and explains what it means. Insurers can impose a warranty for just about anything – some common examples are below (the list is by no means comprehensive):

 

 

  • Compliance with Flammable Liquids & LPG Regulations.
  • No paint or GRP Spraying.
  • Automatic fire alarms to be tested weekly.
  • Fire extinguishers to be professionally inspected annually.
  • Fireproof doors to remain closed during working hours.
  • All stock to be kept at least 15cm off floor
  • Waste & dirty cloths to be kept in metal bins.
  • Waste bins to be kept outside premises out of working hours.
  • Intruder alarm to be set whenever premises is unoccupied.
  • Electrical circuits to be inspected within 30 days of policy inception.
  • Cash registers to be left empty & open when premises closed.
  • Vehicles to be fitted with immobilisers and alarms.
  • Premises to be inspected daily.
  • No artificial heating to be used on premises.
  • Machinery only to be running when premises is occupied.
  • No flammable liquids to be kept on premises.
  • Moorings to be lifted & inspected at least annually.
  • Terms of trade to incorporate BMF Terms of Business.
  • No work carried out on commercial vessels
  • Trailers to be secured with a wheelclamp whilst unattended.
  • Vessel not be let out for hire or reward.
  • Vessel will not tow or be towed

 

 

  • British Marine Federation (BMF) Terms of Business

 

 

  • Most Marine Trade policies warrant that you operate under BMF Terms of Business. You do not have to be a member of the BMF to use their terms. The essential point from an insurance aspect is that you ensure all your customers insure their own boats. This is a crucial factor that defines the mechanics of how your Public Liability insurance works and how it differs from non-Marine commercial insurance policies.

 

 

  • If you have a customer’s boat, outboard etc in your custody or control and it is lost or damaged due to your negligence, your legal liabilities in respect of the property are covered under the Public Liability Section of your Marine Trade policy.

 

 

  • This cover would not be provided on a non-Marine policy as legal liability in respect of goods in custody or control is specifically excluded. To insure these items you would have to procure specific insurance which, as leisurecraft and associated equipment are very expensive, would be financially prohibitive for a business to purchase.

 

Other Insurances for your Marine Trades Insurance Programme

Directors & Officers Liability Insurance (Management Protection)

Modern legislation now means company directors can now be sued as individuals in respect of their decisions and actions as directors or managers of businesses. The duties of company directors are established in law and include the following areas of responsibility:

 

  • Duty of Care: Directors are required to act with ‘the care an ordinary man would take in the same circumstances on his own behalf’ and with the skill expected from someone with his ‘particular knowledge and experience’. Where duties are delegated the Director is responsible for ensuring that the person to whom the duties are delegated is sufficiently experienced, reliable and honest.

 

 

  • Fiduciary Duty: Directors must act honestly, in good faith and in the best interest of the company and must ensure they do not have any conflict of interest.

 

 

  • Statutory Duty: Company directors are legally bound by legislation such as the Companies Act 1985, Insolvency Act 1986, Financial Services Act 1986, Environmental Protection Act 1990, Health and Safety at Work Act 1974.

 

How Can Claims Arise?

Whilst public bodies such as the Health & Safety Executive can prosecute directors if they are perceived to have failed to comply with their statutory duties, claims could also arise from numerous third parties such as employees, creditors, customers or suppliers.

With the number of employees injured at work increasing by over 100,000 in 2010 and lawyers able to act on a “No-Win, No-Fee” basis, directors appear to be more exposed than ever.

What Are The Financial Implications of a Claim? Directors will be personally liable for meeting the cost of legal expenses as well as any damages awards, fines or penalties. This means assets such as their cars, houses, stocks and money could be lost. Companies are prohibited from indemnifying their directors in the event of their insolvency.

How Can Directors & Officers Liability Insurance Help?

Whilst a D&O policy will not cover any fines against directors it will cover the cost of defending a prosecution until the point when guilt is established. This could potentially save tens, if not hundreds, of thousands of pounds of an individual’s assets in legal expenses. A D&O policy can also cover awards for damages and legal expenses made against directors in civil cases.

Professional Indemnity Insurance

If you give advice, conduct surveys or inspections for a fee, your legal liabilities in respect of these activities are excluded on your Marine Trade policy. A stand-alone Professional Indemnity policy will fill the gap in your insurance cover.

Tractor & “Special Types” Insurance

Tractors and other special type vehicles which are road-registered are excluded from standard public liability policies, as are many unregistered vehicles, if travelling on, or crossing, public highways. This may also apply to areas where the public have access such as ports, harbours and boatyards. Types of vehicles that fit into this class are: Tractors, Cranes, Fork Lifts, Cherrypickers, Boat Lifts and other self-propelled mobile plant.

Third Party insurance is compulsory and a failure to have this basic cover is considered one of the most serious offences. A substantial fine and disqualification are amongst the recommended penalties.

Driving uninsured (or allowing your employees to do so) is an absolute offence which means there is no discretionary defense available, i.e. the vehicle is either insured or it is not. If, for any reason it is not insured, the offence is committed.

Without insurance your business and your personal assets are at risk from potentially huge compensation claims being made against you

Comprehensive Road Risks insurance in for tractors and “Special Types” is available at very competitive rates from your specialist broker.

Summary

Modern businesses need modern insurance programme. Cutting cover to cut costs is not the solution. Your 9-point step to getting the right cover for your business at the best available premium is:

1. Choose an independent specialist broker.

2. Ask them what they can offer you in terms of support in the event of a claim.

3. Ask them to visit you to look over your business.

4. Ensure you fully disclose all relevant information about your business

5. Accurately assess the value of your premises & property and the levels of your turnover, payroll and gross profit.

6. Request 3 quotations.

7. Ensure you have all conditions, exclusions, warranties explained to you verbally – a written summary is not sufficient.

8. If you think some of the exclusions or warranties are unreasonable then ask your broker to negotiate their removal.

9. Finally, negotiate the best premium you can get from your appointed broker.

Disclaimer: This article does not constitute specific advice or recommendation to any individual or business. Individuals and businesses should seek the advice of an appropriately authorized and regulated insurance broker or intermediary.

 

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Global Explorer Scholarships at Linn–Benton Community College, USA 2022

Linn–Benton Community College, USA is offering the Global Explorer scholarship to international students that would love to study at the Institution. Interested students from these countries will receive 1 credit of international tuition each of their first three terms at LBCC with no application needed.

Application Deadline: OPEN

Global Explorer Scholarships at Linn–Benton Community College, USA 2022

Eligible Countries: Indonesia, Brazil, Japan, South Korea, Canada, Costa Rica, Mexico, Colombia, Venezuela, and all African countries.

Type: Undergraduate degree

Value of Award: Tuition fee

Number of Awards: Not Mentioned

Eligibility: To be eligible, you must;

  • be new and continuing international students each year.
  • have high school certificates with a good academic record.
  • submit scores of the following English language proficiency tests: TOEFL500 PBT or 61 IBT, IELTS or IELTS Indicator 5.5, Duolingoscore 95 or higher (no sub-score lower than 75), IGCSE English with C or above ITEP 3.7 and US Standard High School Diploma/GED

Application Process: Applicants are required to submit an online admission application at LBCC.

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