FYI on Certificates

Certificates of insurance – ahh the joys. If you are in business, more than likely you’ve run into the need to get or provide a certificate of insurance. Certificates are a snapshot of certain liability coverage an entity has in force on the date the certificate is issued.  They are not a promise of coverage – they are documentation of it. Certificates can be a very useful, time-saving tool when used properly. It provides documentation to a business that the person they are hiring or who is using their property has the proper coverage in place in the event of a loss. This saves the entity in need of a certificate the hassle of getting a copy of someone else’s insurance policy and wading through it. However, as is often the case, when something is too easy, it can be taken advantage of.

Certificates have been the topic of debate for quite some time. The issue stems from certificate holders, those in need of the certificate, using it in a court of law to sue for coverage. This has forced the courts to rule on whether or not a certificate is a promise of coverage. Although the courts have upheld that a certificate is not a promise of coverage, the use of a certificate with incorrect information on it being distributed has, at times, allowed the courts to rule that although the piece of paper doesn’t promise coverage, the intent behind it did. In a nutshell, someone recorded incorrect information on a certificate. There was a loss that was not covered for the certificate holder. Wording added to the certificate implied the coverage would be provided although the insurance policies the certificate represented did not provide it. Courts ruled that coverage must be provided because the certificate holder had been misled, albeit unintentionally.

So – where does that leave the certificate of insurance? Several states around the country, including Iowa, have decided to take a stricter stand on how insurance companies and agents handle certificates. The Iowa Insurance Division issued a bulletin on 7/13/10 stating that no one should alter or misrepresent coverage on a certificate of insurance. The format of the certificate was modified to allow previous wording to be replaced with check boxes. Furthermore, if a certificate holder needs more than what the format allows, policy documents must be sent. This effort was initiated to clarify the coverage being afforded certificate holders – to lessen confusion, to reduce the number of court cases. Certificate holders run the gamut from acceptance to refusal of the new format and rules. This puts insurance agents in the position to balance what is legal and what is needed to keep their clients in business and happy.

Needless to say, certificates of insurance remain a thorny and, at times, confusing subject. When you need to request your agent to send a certificate of insurance for your project or event, remember your agent is protecting you when they will not give in to the demands of the holder to “have it the way we always used to”. With patience and time, this too shall pass.

Cell Phone/Electronic Device Use Policy

When discussing safety elements with clients and business owners, one topic that is always popular is “Cell Phone Usage.”   There are several elements to consider when thinking about implementing a cell phone policy including:

·         How do I best protect my business?

·         How to I put restrictions in place that will not affect the efficiency of my company?

·         How do I make it fair to my employees?

States are now jumping on board making state laws that prohibit cell phone usage and texting while behind the wheel.  Currently, 34 states ban text messaging for all drivers and 9 states prohibit all drivers from using handheld cell phones while driving.  In several recent claims our agency has seen, the other party has requested cell phone records to determine if a driver was on the phone at the time of the accident.  If you’re considering a cell phone/electronic use device policy, here are some Do’s and Don’ts to writing a policy…

·         DO address the current state laws and any local ordinances in place. Make sure that the policy you draft speaks to the local regulations where your employees will be driving.

·         DO be reasonable with your policy and understand that employees work long hours.  Sometimes cell phone use is needed for communication between employees and their family members.  It’s important to recognize this for workplace morale and retention.

·         DON’T write a cell phone policy and assume you’re covered.  As a business owner, you need to take appropriate steps to enforce the policy and employees need to clearly understand the consequences of not following procedures.

·         DO consider having a provision in place regarding cell phone cameras.  Do you have intellectual property, trade secrets, personal customer information or other confidential data that could be captured and sent with cell phone camera? 

·         DON’T forget to have ALL employees sign and date your policy once it’s written and in place. 

·         DO allow ample time for your employees to review and sign the policy as well as ask any questions.

·         DO realize that cell phone policies are not a “one size fits all.” What may work for one employer, may not work for your company.

·         DO address that the Company has the rights to monitor usage of company-issued phones for excessive or irregular use.

·         DO address what an employee’s expectations are for personal use of a company owned cell phone.  Also address the employee’s expectations for protecting the cell phone and returning it upon resignation or termination.

·         DO protect yourself.  If the cell phone is company-issued as well as the vehicle, you may want to prohibit cell phone use all together while an employee is driving your company vehicle.

·         DON’T forget other electronic devices that may fall under this policy. Do you have a production area? Do those employees listen to music on their i-pods or MP3 players?  Can the headphone wires be a safety hazard? If you have company issued laptops, think about security requirements for wireless internet.

·         DO make sure to have any written policy reviewed by your attorney before handing it out to employees.

Millhiser Smith has several samples of a cell phone/electronic device use policy that we’d be happy to share with you. Please contact me at clamb@millhisersmith.com if you have any questions or if you would like a sample of a cell phone/electronic use device policy.