The ERISA bond coverage is usually determined as follows:

• Each person having access to funds of an employer-sponsored retirement plan must be covered for at least 10% of the amount they handled or had access to in the previous year.
• In most cases, coverage cannot be less than $1,000 or more than $500,000.
• The maximum coverage required extends to $1 million when the employer-sponsored plan includes securities issued by the employer.

It is unlawful for any person to “receive, handle, disburse, or otherwise exercise custody or control of plan funds (stocks, bonds, mutual funds, or ETFs) or property (land, buildings, mortgages) without being properly bonded.

ERISA bonds must be issued by an independent insurance company and acquired through an independent insurance broker.

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Here are some of the reasons why these changes are happening:

• Significant reinsurance pricing increases due to the following:
  1. Global catastrophe activity, including floods, earthquakes, wildfires, windstorms, etc.
  2. Severe losses from Hurricanes Irma and Michael
  3. Reduction in overall reinsurance capital due to COVID
  4. Trapped capital in the “retro” reinsurance markets
     A recent report from Aon Benfield estimated that “around $15B of collateral remains trapped in the wake of recent major natural catastrophe events. The reduced amount of capacity available for deployment is impacting the retrocessional market”. Retrocession, or “retro”, reinsurance refers to reinsurance for reinsurers. Trapped collateral and capital from insurance-linked securities (ILS) funds and other third-party capital backed reinsurance entities was expected to be a key catalyst for 2020 renewals. In the end, this lack of available capital proved to be a rate driver for the primary markets as evidenced in part by the rate filings occurring across the board for insurers.
  5. Social inflation and roof claims
     1. Increased litigation, broader definitions of liability and insured behavior.
     2. The feeling that someone needs to pay when there is some kind of damage or injury, regardless of negligence.
     3. Weather claims on rooves which are simply aged or worn. As a result, carriers are refusing to insure rooves older than ten years. Major rate increases on older rooves and coverage limitations. Florida is among the top five states for this type of fraud.

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The following is an attempt to summarize 10 of the top questions you might have about homeowner’s insurance but were afraid to ask. We can go into much more depth if you wish. But this is a beginning:

1. What is homeowner’s insurance?

   Homeowners insurance is a package policy of property and liability insurance. It is designed primarily to cover your home and the things inside it—the things that can fall out if you tip your home upside down—in the event of some problems. It is also designed to protect you if you are sued for negligence and causing injury or property damage to another.

2. What perils are covered by homeowner’s insurance?

   Homeowner’s insurance commonly covers these perils: fire, windstorm, hail, lightning, smoke, explosion, theft, vandalism, riot and vehicle collision. It commonly excludes — i.e. doesn’t cover– earthquakes, flood, power failure, war, nuclear explosion, neglect, ordinance of law (locally forced repairs) or intentional damage.

3. How do I insure against risks that the homeowner’s policy doesn’t cover?

   If you live in an area that is prone to flood or earthquake, you can purchase a separate policy to cover these perils. In fact, a mortgagee will probably require you to purchase flood or earthquake insurance if you live in an area prone to them.

4. Is homeowner’s insurance required by law?

   No, it is not. Unlike automobile insurance, you are not required to buy homeowner’s insurance. If you have a mortgage, the mortgagee will most likely require it. The bank doesn’t want to lose its investment.
   Homes are expensive and perils such as fire, windstorm, or flooding doen’t always discriminate based on the value of the home. Most homeowners are not in a position to self-insure if they have a catastrophic loss, like a fire, wind or a flood.

5. Will homeowner’s insurance replace my home if it is destroyed by, for example, a wildfire?

   Depending on your coverage and the amount of insurance you purchased, the homeowner’s policy will go a long way toward making you whole. It will even pay for “loss of use”, i.e., for you to secure temporary housing while your home is being repaired. As we like to say: “No one regretted having too much insurance at the time of loss”.

6. What are the different types of homeowner’s insurance?

   There are main types of homeowner’s policies: A replacement cost homeowners insurance policy, the better of the two, pays claims based on the cost of rebuilding or repairing your home with new like kind and quality at the time it is damaged or destroyed. An actual cash value homeowner’s insurance policy, which is less expensive, pays claims after accounting for any depreciation in your home’s value.

7. How do I determine how much homeowner’s insurance I need?

   The answer to this question really depends on the size and condition of your home (replacement value) and the value of your contents. The standard homeowner’s policy covers personal belongings at 50% of the limit of your dwelling coverage. Some valuable items, like jewelry and fine arts, should be insured separately.

8. How does liability coverage work?

   The liability section of the homeowner’s policy protects you if you are liable for someone’s injuries at or around your home. An example is if they slip and break a leg on a broken tile. The liability portion of the homeowner’s policy also covers property damage caused by you or a member of your household. The minimum limit is usually $100,000, but we recommend at least $300,000 to adequately protect your assets in the event of a loss.

9. How can I lower the cost of homeowner’s insurance?

   You can opt for a higher deductible — that’s the amount of money you’ll have to pay out of pocket before your insurance kicks in. But you should also ask if you qualify for any discounts, such as alarm system credits or wind mitigation credits. Be sure that the values on your home and your contents are accurate. Remember that we are talking about replacement value and not market value (including the value of land).

10. What is a Personal Umbrella Policy?

    Umbrella insurance policies are designed to give you extra liability coverage above and beyond that of your auto and homeowner’s policies. They are especially valuable for someone with substantial assets and/or someone with teenage drivers. Specific levels of underlying insurance are required. Uninsured Motorist Umbrella coverage should be included.

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If you have any questions or need help navigating the complex world of medical malpractice insurance in Florida, please call Gracey-Backer, Inc. at 800-272-6055.

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Medical specialty: Neurosurgeons, anesthesiologists, orthopaedic surgeons, obstetricians, and emergency medicine doctors will pay premiums that are higher than average for medical malpracitce insurance. This is because patients are more likely to have complications or because they have more serious illnesses or injuries.

Location of the practice: A physician in Duval county will pay less for his malpractice insurance than a physician in Dade county, assuming their specialty is the same.

Tort Reform: If the doctor’s state has enacted meaningful medical malpractice tort reform legislation, and if claim amounts are capped by statute, medical malpractice insurance premiums will be lower than they were without tort reform.Caps on how much money patients injured by a doctor’s mistake can receive were declard unconstitutional by the Florida Supreme Court on June 8, 2017. These caps were put into place in 2003.

Limits of liability: Higher limits of liability on a medical malpractice insurance policy result in higher medical malpractice insurance premiums.

Claims experience: If a doctor has experienced claims activity, his or her Florida medical malpractice insurance premium will reflect this experience.

Risk profile: Medical malpractice insurance companies are concerned about the number and types of surgeries a physician performs. Physician malpractice insurance policies will be rated accordingly.

Policy provisions: Some medical malpractice insurance companies offer more robust policies but have higher premiums than others, which offer more stripped-down policies.

Medical Malpractice Insurance Premium Credits

The following are examples of credits often available for physician and surgeon medical malpractice insurance in Florida:

Loss Free Credit — Available if the physician or surgeon has not had a claim in 3, 5, 10 or even 20 years. Credits vary, but can be as much as 25% of the medical malpractice insurance base premium, especially if there is competition from other medical malpractice insurance carriers.

New-To-Practice Credit – Physicians and surgeons who are just beginning their practice have very little exposure to malpractice claims. The first year malpractice insurance premium discount is often as much as 50%. Premium credits diminish over time and, after a period, are no longer available as the physician is no longer new-to-practice.

Risk Management Credit – Some medical malpractice insurance companies offer credits for taking an approved risk management course. Sometimes there is a charge for taking the course. Sometimes it is offered at no charge. Credits are normally 5-10% of the malpractice insurance premium and are good for a few years, at which time the course must be taken again. Courses are offered live or on-line. We highly recommend that a Florida physician or surgeon take a risk management course to reduce the likelihood of having a claim. Remember, medical malpractice claims are awful, no matter who is at fault and no matter the outcome.

Board Certification Discount – This discount is available to physicians and surgeons who successfully complete their board certification. Different medical malpractice insurance carriers give different credits.

Part-Time Credit – A physician or surgeon may receive a sizeable credit on malpractice insurance for working reduced hours, depending on the company. Credits range from 25% to 50% for physicians or surgeons working 20 hours or less per week.

Large Group Credit – Physicians and surgeons who work as part of a larger group may receive premium credits simply for being part of a group. Competitive pressures force many companies to apply significant credits to take a large group from a competitor.

Society Credits – Some medical malpractice insurance companies specialize in putting together malpractice insurance programs for groups of similar specialty physicians. There can also be credits for belonging to a national, state, county or local medical society.

Discretionary Credits – Most medical malpractice insurance carriers can apply discretionary credits depending on how badly they wish to secure or retain a piece of business.

It is important that you ask about receiving maximum credits. We have seen many cases where a physician or surgeon, simply by asking, has been able to reduce the cost of his malpractice policy, especially if he is in a good bargaining position with a clean record and a preferred specialty. At Gracey-Backer, Inc., we specialize in securing the highest quality medical malpractice insurance for our physician and surgeon clients at the best price. We have been serving the physicians and surgeons of Florida since 1925. Our team of professionals works tirelessly so you, the Florida physician and surgeon, can focus on what you do best.

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Currently, the Florida medical malpractice insurance marketplace is relatively stable and very competitive. This is good news for Florida doctors wishing to purchase medical malpractice insurance. Most of the major medical malpractice insurance companies in Florida offer hefty discounts to differentiate themselves from the competition. It is vital for Florida doctors to realize that medical malpractice discounts can apply to their practices.

The following discounts on medical malpractice insurance policies are available to Florida doctors. Check to see if you qualify:

• New-To-Practice Credit – Doctors just starting out in practice have very little exposure to litigation. Therefore, Florida medical malpractice companies often apply significant discounts during the first two or three years of practice. The first year malpractice premium discount is often as much as 50%. Premium credits for the new practitioner diminish over time and, after a period, are no longer available as the doctor is no longer new-to-practice.
• Loss Free Credit – Available to those Florida doctors that the malpractice insurance company most wants to attract. Available if the doctor has not had a claim in 3, 5, 10 or even 20 years. Credits vary, but can be as much as 25% of the medical malpractice base premium, especially if there is competition from other medical malpractice insurance carriers.
• Society Memberships – Membership in National, Regional, or State Medical Societies can often result in a discount. Some medical malpractice companies specialize in putting together malpractice insurance programs for groups of similar specialty physicians.
• Large Group Discount – A large group is appealing to a Florida malpractice insurance company, especially if the group is relatively claims-free. Competition forces malpractice insurance companies to apply credits to take a large group from a competitor.
• Part-Time Credit – A Florida doctor may receive a sizeable credit on malpractice insurance for working reduced hours. Credits generally range from 25% to 50% for Florida doctors working 20 hours or less per week.
• Risk Management Credit – Some medical malpractice insurance companies offer credits for taking an approved risk management course. Sometimes there is a charge for taking the course. Sometimes it is offered at no charge. Credits are normally 5% of the malpractice insurance premium and are good for a few years, at which time the course must be taken again to continue the credit. Courses are normally offered on-line.
• Board Certification Discount – This discount is available to physicians and surgeons who successfully complete their board certification. Different medical malpractice insurance carriers give different board certification credits. Some carriers require board certification as a prerequisite to insuring the doctor.
• Discretionary Credits – Most medical malpractice carriers can apply discretionary credits depending on how badly they wish to secure a piece of business.

It is important that you ask about receiving maximum credits. We have seen many cases where a physician or surgeon, simply by asking, has been able to reduce the cost of his medical malpractice insurance policy, especially if he is in a good bargaining position with a clean record and a preferred specialty.

In any case, it is important to:

Choose the right payment option

Most Florida medical malpractice insurance companies will allow annual, quarterly, or monthly payments. While this is a good thing, be sure to determine if finance charges apply. While spreading payments out can greatly improve cash flow for a practice, it sometimes comes at a cost. Some physician practices in Florida employ a bank’s line of credit to pay medical malpractice insurance premiums. Others pay the premium in one lump sum, thereby avoiding finance charges. Then, through the year, they bank money to pay in full the next year, again avoiding finance costs. And, finally, some medical malpractice insurance companies on Florida will allow doctors to pay in installments with no finance charge. Some companies will require ACH/EFT to offer monthly payments. This is a competitive tool that can benefit the Florida doctor.

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The bad news is that it is often difficult for a doctor to choose the right medical malpractice insurance company for his practice in Florida. Some offer low rates, some have dividend programs, some have extra coverages that make their programs more attractive.

So how does a Florida doctor go about choosing the best medical malpractice insurance carrier in Florida?

In many cases, the choice of malpractice carriers might be made for him. If he joins an existing practice, that practice probably already has gone through the process of choosing an insurance provider and is happy with its malpractice insurance carrier. If he is employed by a hospital, he does not have to consider the implications of malpractice insurance.

But…for an independent practitioner looking for medical malpractice insurance, or for a group wishing to explore the Florida malpractice marketplace, the following should be considered:

• Quality of the company—As determined by its A.M. Best & Co. rating. Should be in the “A” range with a substantial size. Small companies may not be able to absorb a large loss.
• Length of time in the State of Florida—Important to understand the unique Florida marketplace. Talk with your peers about their experience in the Florida insurance arena.
• Premiums offered for a specialty—Probably the biggest consideration for most doctors. But beware if the medical malpractice premium is too good to be true. Some companies have the reputation of offering low premiums the first year and then increasing them later.
• Dividend or profit-sharing programs available—To reward doctors for loyalty to a malpractice insurance company. Often redeemable at retirement. An excellent forced savings plan for doctors in Florida.
• Risk management courses—To give premium credits and lessen the chances of having a claim.
• “Bells and whistles” on the malpractice policy—Such as Cyber Liability coverage, coverage for DPR events, Employment Practices Liability coverages, etc.

As we say in our office, no one regrets having the right insurance at the time of a loss. The choice of medical malpractice carriers is one of the most important considerations for a Florida doctor. The decision should be made wisely and with regard to the above important considerations.

And when should a Florida doctor re-evaluate his coverage? In a perfect world, he should review and compare his medical malpractice insurance policy with the rest of the market every year. Whenever a Florida practice changes in size, adds or drops practitioners, or has a significant change in scope, the medical malpractice insurance needs should be re-evaluated. An experienced Florida medical malpractice insurance agent can do this for the Florida doctor—at no cost or obligation.

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• The type of work the employees do;
• The gross payroll for all employees, including salaries, wages, bonuses, commissions and draws against commissions, plus holiday, vacation and sick pay;
• The state where the business is located;

Premiums for Florida workers’ compensation insurance are calculated by the following formula:
Payroll (per $100) X Classification Rate X Experience Modifier = Premium

Sole proprietors are excluded from Florida Workers’ Compensation Insurance coverage unless they request to be included. Corporate officers are automatically covered by the Florida Workers’ Compensation policy unless they request to be excluded.

The simplest way to calculate the annual premium for Florida Workers’ Compensation is to multiply the annual payroll by the rate classification.

The 2017 Florida Workers Compensation Classification Rate for a physician, oral surgeon or dentist in Florida is $.48 per $100 of payroll.

As an aside, Florida Workers’ Compensation Insurance rates increased by 14.5% in December 2016, in response to the overturning of two court rulings:

The Florida Supreme Court ruling on April 28, 2016 stated that the attorney fee schedule that was passed in 2009 was unconstitutional as a violation of due process in the case of Marvin Castellanos v. Next Door Company, et. al.

Also, on June 9, 2016, The Florida Supreme Court issued an opinion in the case of Bradley Westphal vs. City of St. Petersburg, etc, et al declaring the 104-week limitation on temporary total disability benefits unconstitutional.

Because Gracey-Backer, Inc. insures over 2,000 physicians, surgeons, oral surgeons, and dentists in Florida, we were able to use that leverage as bargaining power and we created an exclusive workers’ compensation insurance dividend program. Our exclusive workers compensation insurance dividend program for Florida healthcare providers offers a guaranteed 10% dividend and up to a potential 30% dividend on your Workers’ Compensation Insurance, based on your individual loss experience. You are not grouped with other practices, and therefore are not hurt by their claims. That’s 30% that goes right to your bottom line.

Call us today to learn more about Workers’ Compensation Insurance for Florida physicians, surgeons, oral surgeons and dentists.

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• The business is in an industry other than construction and it has four (4) or more employees, full-time or part-time (Corporate officers that have correctly filed exemptions with the state do not count as employees).
• The business is in the construction industry and has one (1) or more employees (Corporate officers that have correctly filed exemptions with the state or a member of a limited liability company do not count as employees).
• You are a farmer and have more than five (5) regular employees and/or twelve (12) or more other workers for seasonal agricultural labor lasting thirty (30) days or more.

If a Florida business cannot show proof of Workers’ Compensation insurance coverage, the State will seek civil enforcement. Specifically, the Florida business will be subject to a penalty equal to two times the amount the business should have paid within the preceding two year period.

If an employer commits one of the following infractions, a Stop-Work-Order (SW0) will be issued:

• The employer understates payroll in an attempt to reduce the Workers’ Compensation insurance premium;
• An employer misrepresents the employee’s duties in an effort to reduce the workers’ compensation insurance classification;
• An employer otherwise attempts to avoid paying Workers’ Compensation insurance premiums.

We are finding that many small businesses in Florida are facing fines and penalties as described above because Florida state investigators are “popping in” to their offices unannounced and discovering that they don’t carry Workers’ Compensation insurance.

Call our offices at 1-800-272-6055 for more information on our Workers’ Compensation dividend program for healthcare providers, which provides a 30% dividend if no losses and guarantees a 10% dividend even with losses.

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A physician or dentist is required to carry Workers’ Compensation Insurance if:

• They have four (4) or more employees, full-time or part-time. An exempted corporate officer does not count as an employee.

If you, as a physician or dental employer, are inspected and cannot show proof of Workers’ Compensation coverage, civil enforcement action is taken. You will be subject to a Woorkers’ Compensation penalty equal to two times the amount you should have paid within the preceding two year period (based on your Workers’ Comp code). The fine is usually required to be paid within 90 days and some payment plans are available. Additionally, a Stop-Work Order (SWO) may also be issued if a physician or dental employer:

• Understates or conceals payroll in an attempt to reduce the Workers’ Compensation premium;
• Misrepresents or conceals employee duties in an effort to secure a lower Workers’ Compensation physician or dental classification;
• Otherwise attempts to avoid paying workers’ compensation premiums.

Remember that it is against the Florida Workers’ Compensation law for a physician or dental employer to:

• Work without Workers’ Compensation Insurance when required to do so;
• Work in violation of a Stop-Work Order;
• Make a false statement for the purpose of obtaining Workers’ Compensation insurance coverage or to reduce Workers’ Compensation premiums;
• Fail to report an injury to the Workers’ Compensation insurance carrier;
• Discharge or threaten to discharge an employee for filing or attempting to file a Workers’ Compensation claim;
• Deduct the Workers’ Compensation premium from an employee’s pay;
• Misclassify an employee as an independent contractor for the purpose of avoiding paying the proper Workers’ Compensation premium.

A Florida Workers’ Compensation policy can be issued in as little as 24 hours. Contact us today and avoid costly penalties and possible felony charges.

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