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When this Midwest oil company with 269  employees came to us, they were facing the same challenges that plague many organizations: low enrollment rates, confused employees, and an overly complex benefits administration process. The challenge was amplified by their decentralized workforce spread across 22 states, making traditional communication and engagement nearly impossible. Here's how we transformed their open enrollment from a yearly headache into a strategic success story with 92% completion rates. The "Before": A Client in Crisis Our client was juggling three separate insurance carriers, creating multiple bills, contacts, and administrative processes. Their HR team spent more time on paperwork than employee education, and the fragmented experience left employees overwhelmed and uncertain. Poor Employee Engagement Traditional communication methods with no performance tracking No centralized digital resource for benefits information Employees struggled to understand options and make informed decisions Low participation rates across voluntary benefit programs Missed Value Opportunities Underutilized voluntary benefits leaving money on the table No strategic approach to cost savings Technology gaps creating inefficiencies for both HR and employees Our Strategic Intervention Streamlined Operations  Consolidated carriers from three to two while expanding coverage options and reducing administrative complexity. "By leveraging the group's own claims data and working closely with carriers to restructure benefit designs, we turned potential roadblocks into opportunities - securing rate stability on short-term disability while finding significant savings on long-term disability that offset costs for the client," Jacob, Associate Marketing Consultant, said. Digital-First Communication Strategy  Designed and launched an integrated microsite supported by strategic multi-channel engagement campaigns. "We established the microsite as the primary education resource and directed all other communication channels to it," Erica, Sr. Communications Consultant, said. “This allowed all employees to receive the same consistent message regardless of which channels they engaged with." End-to-End Benefits Technology: Integrated multiple systems and automated workflows to reduce HR administrative burden while providing employees with intuitive self-service tools.  "The critical challenge involved ensuring the benefits administration system was correctly configured and ready for Open Enrollment. Since several benefits were being offered through their ADP platform for the first time, all plans needed to be properly established, and the Open Enrollment process designed to facilitate employee self-service enrollment." Sydney, Benefits Tech Analyst, said.   The "After": Transformative Results This collaborative spirit amongst all teams created momentum that carried through the entire project, enabling us to deliver exceptional results. With the help of strategic communications initiatives, we were able to meet the employees where they were at. Record-Breaking Participation 92% open enrollment completion rate - far exceeding industry benchmarks $8,250 in annual technology credits paid to the employer to help offset costs 56% of employees enrolled in at least 1 voluntary line Generated $100,000 in savings through consolidation of non-medical benefits Enhanced Employee Value & Digital Success 35% employee participation in voluntary life insurance with 20% premium savings Seamless enrollment experience through integrated ADP Benefits module 3.17x average engagement rate across all communication channels Key Gamechanger The custom benefits microsite we developed became the enrollment powerhouse, leading to 80% click-to-enroll conversion rate from this site alone. Success Factors Strategic Consolidation : Reducing carriers while expanding coverage created both cost savings and simplified employee experience. Employee-Centric Design : Every communication channel and touchpoint were designed around actual employee needs and preferences. Data-Driven Optimization : Real-time engagement tracking allowed us to adjust messaging and channels for maximum impact. Integrated Technology : Seamless platform integration eliminated friction points that typically derail enrollment completion. Sydney emphasizes the importance of collaboration: "To ensure this was a successful project, the tech and non-medical marketing team worked closely to align our strategies and timelines." True Team Collaboration : The success wasn't just about individual expertise - it was about seamless teamwork. As Jacob noted: "Everyone got to be a superhero here! Carriers were willing to play ball; the group was on top of making decisions and bought in with us and gave us their trust. Tech and communications really helped get everything over the finish line." What This Means for Your Organization This client's journey from benefits disarray to strategic success demonstrates what's possible with the right approach. The combination of smart consolidation, digital-first communication, and employee-focused design created a framework that works. Whether you're struggling with low enrollment rates, complex administration, or employee confusion around benefits, this case study proves that transformation is not only possible, but also achievable with strategic planning and expert execution. Our Team Collaboration: Saved the client and employees money Increased employee education and engagement with the benefits enrollment process Technology helped streamline processes and create efficiency

Last week, the U.S. Senate and House of Representatives voted on advancing President Donald Trump’s budget reconciliation bill, modestly known as the One Big Beautiful Bill Act  (OBBB Act). During the Senate vote, Vice President JD Vance cast the tie-breaking vote to pass the bill. The bill passed the final House vote before Trump’s self-imposed July 4 deadline and the President signed it into law thereafter.    The legislation enacts many of the President’s key priorities, spanning from immigration reform to tax cuts.  Early versions of the bill included changes in the taxability of employer-sponsored health insurance.  Additionally, some later drafts contained a number of provisions that might have altered the manner in which other employee benefits were provided, particularly with regard to Health Reimbursement Arrangements and Health Savings Accounts. Most of these changes did not make it to the final version that won passage. What follows are highlights of how the Act affected (or, didn’t affect) the health and welfare benefits you and your employees enjoy. Issue Current Law OBBB Act Changes Telehealth and HSA Eligibility Prior to 2025, the CARES Act permitted high-deductible health plans to reimburse telehealth services on a pre-deductible basis, thereby preserving an individual’s eligibility to contribute/receive contributions to their HSA.  This safe harbor expired at the end of 2024. Permanently extends the CARES Act safe harbor.  This means that individuals receiving free or low cost access to telehealth benefits will be able to contribute to and receive employer contributions to their Health Savings Account. Direct Primary Care Arrangements and HSAs Some direct primary care arrangements may be classified as health plans, rendering individuals enrolled in these arrangements ineligible to contribute to an HSA. No direct primary care arrangement will be considered a health plan, thus participation will not affect an individual’s ability to contribute to an HSA. Permits use of HSA monies to reimburse direct primary care arrangement costs ($150/month for individual and $300/month for families). HSA Contribution Limits For 2025, Health Savings Account’s annual contribution limit is $4,300 for individuals and $8,500 for families. Individuals may not contribute to their HSA if their spouse participates in an FSA. No Change.   The House-passed version included contribution limit increases and a relaxation of the FSA limitation.  These provisions did not make it to the final. Tax-free Employer-sponsored Health Insurance Employers may provide health insurance, premium support and a variety of other health and welfare benefits to employees and their families in tax-free fashion. No Change.   The current tax exclusion for employer-sponsored health insurance will be maintained. ICHRAs and CHOICE HRAs Subject to some rules, employers may choose to sponsor an ICHRA instead of providing traditional health insurance for their employees.  Employers may reimburse employees, tax-free, for the costs of individual health insurance. No Change.   Earlier versions included changes in how ICHRAs were to be structured, renaming them “CHOICE HRAs.”  The House version included a financial incentive for small employers to offer CHOICE HRAs.  None of these changes made the final bill. As the rules associated with some of these new provisions take shape, we will continue to keep you informed about the potential effects these changes may have on your health benefits offerings.  If you have any questions, please contact your Cottingham & Butler team member today.

In our recent Motor Carrier Safety 101 webinar on vehicle safety standards and brake maintenance, we explored the latest CVSA International Roadcheck findings. The results show the top three out-of-service violations remain: defective service brakes, tires, and other brake violations. But there's one more violation that's catching drivers off guard. Check out the key takeaways below: Missing Inspection Documentation Operating a CMV without proof of periodic inspection is becoming a major issue. Know where your inspection stickers are located and how to get a hard copy of your inspection report if an officer asks for it. Check violation trends at A&I online – Motor Carrier Analysis and Information Resources Online Lights Matter Your lights help other drivers see you. Make sure all required lamps work properly before every trip. It's a simple check that can save you from a violation. Find complete lighting requirements in 49 CFR Part 393 Subpart B Brake Adjustments Still Problematic Even with automatic slack adjusters, brakes out of adjustment remains a top violation. These are mechanical parts that can fail, so always check them during your pre-trip inspection. Tire Safety Goes High-Tech Measure tire pressure when tires are cold using a tire gauge. More scale houses are now using thermal imaging cameras to spot tire and brake problems you might miss. Click here to view the presentation.

“To me, my true task at hand is to be there for my teammates and my insureds in whatever that may look like that day. The days fly by, there is truly never enough time in the day. But, I wouldn’t have it any other way!” Meet Alicia. She’s a Director of Client Service in our Risk Management division. As a life-long Dubuquer, Alicia Oberfoell came to Cottingham & Butler from a supplemental insurance company and has been working in the insurance industry for 12 years. When she applied to C&B in 2019, she couldn't have predicted how quickly she'd grow from Client Coordinator to Service Manager overseeing seven team members. Her journey offers valuable lessons for anyone looking to advance their career at Cottingham & Butler.  Lesson 1: Be Willing to Take the Leap  "I applied to C&B on a whim and just went for it," Alicia shares about her start with the company. This initial courage to pursue an opportunity without overthinking it set her on a path for success. “When I started, I was one of two client coordinators in the practice and now, with the support of my leaders, I helped grow that position by overseeing a total of seven Client Coordinators in Risk – something I take great pride in!” Alicia said. Key Takeaway: Don't let perfect planning become the enemy of progress in your career. Sometimes the best opportunities come from being willing to step forward without having everything figured out. Alicia's story shows that calculated risk-taking can lead to unexpected growth at C&B. Consider which opportunities you might be hesitating on that deserve a "just go for it" approach.  Lesson 2: Become the Example Alicia's service-first mindset earned her the 'Inspiring Leader' award at the Service Excellence Awards last year after multiple leaders recognized her impact. “It was a surprise and an honor,” Alicia said. “It was touching to know that what I'm doing is making a difference for not only my core team, but the department as a whole." Key Takeaway: Leadership at C&B isn't about title or authority - it's about impact and service. Alicia's approach shows that being available and responsive to both team members and clients creates ripple effects that others notice. Even if you're not in a formal leadership role, adopting this mindset of service can distinguish you as someone who lifts others up. Lesson 3: Small Changes Can Lead to Big Impact  Alicia discovered her leadership style through hands-on experience. "I was first promoted to leadership in Spring of 2021 and can honestly say that being in leadership is a passion of mine and helps me thrive,” Alicia said. “I love to change processes, better the service we can provide to clients, and develop improvements down the road on a gradual basis."  While bold transformations certainly have their place, Alicia's approach reminds us not to underestimate the power of thoughtful, incremental improvements. These smaller changes often fly under the radar but can create remarkable cumulative impact over time.  Key Takeaway: Think about your daily work - what small adjustment could you make this week that might save time, reduce frustration, or improve client experience? Maybe it's streamlining a communication process, tweaking a template, or eliminating a redundant step. Consider balancing your big-picture thinking with attention to these daily opportunities for improvement. Many times, the most significant innovations at C&B have grown from someone simply asking, "How can we make this better?"  Lesson 4: Help Champion Innovation  While Alicia helps drive Risk Management's AI initiatives, she consistently highlights the collaborative nature of the work. She explains that the team is implementing AI to read loss runs and automate renewal outputs.  "This will be a huge win for our clients, marketers, and our internal team, who will get some time back to focus on other things," Alicia said. She's also thinking about how this will affect clients, saying "Having some of our reports available at the snap of a finger will also give us an advantage to gain new clients.” Key Takeaway: The most successful innovations at C&B often emerge from collaborative thinking and problem-solving. When advocating for change in your area, involve teammates with different perspectives, focus on long-term advantages, and always keep in mind how this will affect the business. Lesson 5: Invest in Lifelong Learning   Alicia embodies one of C&B's foundational principles by continuing her education journey at every career stage. "I am actively in the middle of getting my AAI, which will be my very first insurance designation, and I should have that completed soon," she shares. Rather than viewing her leadership role as an endpoint, she sees it as a platform for deeper expertise.  At Cottingham & Butler, continuous learning isn't just encouraged - it's part of our DNA. John Butler's vision of lifelong development remains at the heart of our culture today, and Alicia's pursuit of her AAI designation while managing a growing team demonstrates how technical knowledge and leadership skills complement each other in our industry.  Key Takeaway: What's your next learning opportunity? Whether it's a formal designation, mentorship relationship, cross-departmental experience, or simply mastering a new skill, the path to growth is always open at C&B. Like Alicia, you can leverage the company's support for professional development to enhance both your individual contributions and your ability to serve clients and colleagues more effectively.    Beyond the Office Alicia and the Risk Management team like to have some fun along the way, as well. In 2023, Zurich invited the service team to join them in their suite at the United Center for a Blackhawks game with a client. “It was the first time I was able to meet with the Zurich team in person, as well as some of my clients,” Alicia said. “Mike Saladino (Vice President of Risk Management in our Chicago office) was a top-notch host in ensuring we had the best time – it was a night I will not forget!” In life outside the office, Alicia resides in Dubuque with her husband, Bobby, and the three boys she gained who are 22, 17, and 14. Additionally, her family has a calico cat and a young pomsky. Alicia and her family enjoy going up north in Wisconsin to stay on the lakes as well as boating and snowmobiling. Fast Facts About Alicia “I am the oldest of three, to which my siblings are much younger than me. They were my first pride and joy, so I like to brag about them like they were my kids! My brother retired from Army Airborne, still working in recruitment, and is attending Yale to become a federal lawyer. My sister graduated from UD with a Psychology degree and is working at Caravel Autism Health on the NW Arterial with young kiddos needing therapy.” “My sister has interned with C&B for a summer, but I can’t get her into the passion of insurance; however, my Mom does work at C&B alongside me.” “I grew up with my Dad in an ‘80s hair metal cover band, so I really enjoy going to live music at the Q in the summer with my family.”  Inspired by Alicia's journey? Join our team! Explore open positions and apply on our careers page to start your own success story with us.

Our most recent webinar, The Captive Edge: From Standard to Superior, explored how Cottingham & Butler's captive programs deliver measurable advantages. Through data analysis and client testimonials, this session highlighted superior renewal outcomes compared to the standard market. If you were unable to attend or want to revisit this webinar, view the webinar recording now! Click here to view the presentation.

Three main authority types in the transportation industry deal with moving freight from point A to point B: motor carriers, brokers, and freight forwarders. While a broker arranges for the freight to be moved, the motor carrier moves the freight and a freight forwarder stores, moves, and also arranges for the shippers. Yes, all of these involve freight and getting that freight to its’ final destination, but the means in which each entity does that and is involved is vastly different.  Here are more detailed definitions of these three types: Motor Carrier: Is compensated for transporting property or passengers.  Broker: Is compensated for arranging transportation of material goods by a motor carrier but does not take on the responsibility of transporting the material goods. Freight Forwarder: A company that holds itself out to the general public providing transportation of material goods for compensation and, in the normal course of business, puts together and combines– or provides for combining– shipments and performs break-bulk and distribution operations of freight; takes responsibility for transporting material goods from place of receipt to the place of shipment; transports via rail, motor, or water carrier, which is under the control of the FMCSA. Differences Between Authority Types As seen by the definitions there are some differences between the three types of entities within the transportation industry. The biggest thing that differentiates the three is what their business description truly is. A motor carrier transports the goods from point A to point B, as stated for compensation, making them a for-hire company. The motor carrier will take responsibility of the property while it is in the custody of the motor carrier, which typically requires the motor carrier to obtain some sort of cargo insurance to cover the property in the event there is a loss. A broker, however, does none of the transporting of the property. They are a for-hire entity and take compensation, but they are compensated by arranging the transportation of the property from point A to point B. Where they differ from a motor carrier is in the fact that they do not take any sort of responsibility for the property in transit from point A to point B. A freight forwarder, on the other hand, does everything from storage to the shipping of the property on behalf of their shippers. Typically freight forwarders will ship property under their own bills of lading which holds them responsible for the property in transit, until it reaches the destination. Appropriately Setting Up Each Entity To appropriately set up each of the three entities, a 7 step process that must be followed. These 7 steps can be found on the FMCSA website . Within the 7 step process each entity must fill out different paperwork, put in for their operating authority (MC Number), and obtain their USDOT number. The type of operating authority applied for will determine the level of insurance required by the federal government. The forms required along with other requirements for each operating authority are as follows: Motor Carrier: Must fill out the OP-1 form (the application) and file the MCS-150 (motor carrier identification report). Once approved, proof of public liability insurance must be filed to obtain the MC number. Broker: Must fill out the OP-1 form and the MCS-150, same as the motor carrier. Proof of public liability insurance or cargo insurance is not required, but a $75,000 bond posted on the FMCSA website is required before obtaining the MC number. Freight Forwarder: Must fill out the OP-1 (FF) application. Once filled out and approved, the freight forwarder must provide proof of public liability insurance and cargo insurance within 90 days of receiving their operating authority. While these three types of authorities all provide transportation of freight, how they go about moving the freight is different. So, when applying for an authority, it is necessary to know what type of business entity you are ultimately looking to operate.  This way the correct paperwork is filled out and submitted to the FMCSA and your insurance agent will be able to provide you with quotes/insurance for your business exposures. Resources: https://www.fmcsa.dot.gov/registration/getting-started https://www.silverplume.com/SPOnline/SPSage.aspx?cmd=home https://www.fmcsa.dot.gov/faq/

For most trucking companies, their primary business is generating receipts from loads hauled.  However, a growing subset of trucking companies’ revenue is generated from “ancillary businesses” either in the trucking companies’ name or even a separate name.  These “ancillary businesses” might include, but are not limited to the following: Automotive Dealers Service Stations Body Repair & Collision Shops Detail Shops Oil Change & Lubrication Sound and Communications Equipment Repair & Installation Tune-Up & Emission Testing Mobile Auto Repair Towing Storage Common Garage Coverage Claims Scenarios A very common problem popping up with these “ancillary businesses” is that they may not be properly insured. The common misconception is that these businesses would be covered under the general liability policy that may already be in place.  However, the general liability policy specifically excludes this type of operation due to an exclusion for “Your Work”, and for vehicles in your care, custody, and control.  These types of claims can lead to catastrophic situations that many companies find out after an uncovered loss situation occurs.  Here are a few examples of common garage coverage claims scenarios: You run a service station and a customer has to leave their vehicle in your bay overnight while waiting for parts.  A fire ensues and destroys the station including your customers’ car.  This is not covered under general liability – it would be covered under garage keepers. You run a mobile auto repair business that fixes windshields and the vehicle becomes damaged.  In this case, you don’t even “own” a garage, however, you would need a garage keeper's policy the vehicle is in your care, custody, and control. Components of Garage Coverage The common garage policy is composed of two separate, but both equally important coverages:  garage liability and garage keepers. Garage liability covers the liability for the premises and operations as well as products and completed operations involved with running a garage business.  To further explain, completed operations coverage applies in the event of a claim that results from property damage to an auto as a result of work the insured performed on the auto. The second piece of the garage policy is the garage keeper's form.  The garage keeper's policy covers the insured’s liability for the loss of a covered auto left in the insured’s care while the insured is attending, servicing, repairing, parking, or storing the auto in the garage operation.  Some common garage keeper's claim types are accidents involving collision, fire, explosion, theft, or vandalism.  Ensuring Adequate Coverage A common issue with this coverage is being “under-insured” in the event of a catastrophic situation.  A few things to consider when determining the proper limit:  How many vehicles could you be servicing or storing at one time?  What are the maximum values of these vehicles? In summary, the “ancillary businesses” noted above that are generally in place for extra revenue can have devastating effects on those companies that are not properly insured.  A proper garage policy that consists of garage liability and garage keepers will help protect your business for years to come. References: www.irmi.com www.jordanjordaninsurance.com www.insurancejournal.com

To explain what an MCS-90 form is and what it provides, it is important to understand the regulations put in place that make the MCS-90 necessary. The need for an MCS-90 endorsement starts out in part because of the Federal Motor Carrier Act of 1980.  This act states that each motor carrier participating in interstate, for-hire commerce, is required to show proof that they have a financial responsibility equal to or greater than the minimums set by each state.  Each motor carrier can show proof of this financial responsibility in one of three ways. The motor carrier can choose to  self-insure their company. By self-insuring, the motor carrier is essentially stating that they have the financial responsibility to cover any and all claims that arise from their company’s negligence and that they are legally liable to pay. The motor carrier can choose to provide proof of financial responsibility by providing a  surety bond . A surety bond is a promise for one party (the party who issued the surety bond) to pay on behalf of another party (the party who the bond was issued to) in case they fail to pay. The motor carrier can choose to procure insurance  through the standard market. If, and when, the motor carrier chooses this option, this is when the MCS-90 endorsement will come into play. The MCS-90 is nothing more than a guarantee that there will be some source of funds to pay for a loss in which the insured was legally liable.  This guarantee is mainly for the purpose of the public in ensuring them that there will be no financial consequences if a motor carrier doesn’t have the minimums required.   The MCS-90 states that it “covers all vehicles owned, operated, or maintained by the insured regardless of whether or not each motor vehicle is specifically described in the policy.”  However, if a claim is paid out under the MCS-90, the insurance company may recoup its losses by subrogating the claims paid against the motor carrier.  This is another reason why it is so vitally important to have all equipment listed on a scheduled unit policy. In conclusion, the MCS-90 is a very complex and confusing endorsement but one that is very vital to a motor carrier.  While it does not provide the insurance itself, it is an important part of a motor carrier’s portfolio and can go a long way to help motor carriers and insurers protect themselves. References: https://www.fmcsa.dot.gov/documents/forms/r-l/mcs-150-instructions-and-form.pdf https://www.rsiinsurancebrokers.com/5_09-what-is-an-mcs-150-form-filing-/ https://www.jjkellerservices.com/articles/your_mcs150_keep_it_current.html

On May 12, 2025, President Donald Trump issued an executive order  (EO) that aims to bring the prices Americans pay for prescription drugs in line with those paid by similar nations. According to a White House fact sheet , the prices Americans pay for brand-name drugs are more than three times the price other nations pay.  In April, President Trump signed another EO aimed at lowering prescription drug prices, which included a variety of directives related to the Medicare program and the pharmaceutical industry. The directives may not have an immediate impact on drug costs, as they will take time to implement. Key Directives The most recent EO outlines a number of actions intended to lower prescription drug prices in the United States. Among other things, the EO directs: The U.S. Trade Representative and Secretary of Commerce to take action to ensure foreign countries “… are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes” in the U.S.; The Trump administration to communicate price targets to pharmaceutical manufacturers; and The Secretary of Health and Human Services (HHS) to establish a mechanism through which American patients can buy their drugs directly from manufacturers who sell to Americans at a “Most-Favored-Nation” price. Notably, if drug manufacturers fail to offer most-favored-nation pricing, the EO directs the Secretary of HHS to: Propose rules that impose most-favored-nation pricing; and Take “other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anticompetitive practices.” This includes, but is not limited to, enforcement action by the U.S. Federal Trade Commission. Potential Legal Hurdles While the EO directs the Secretary of HHS to communicate most-favored-nation price targets to pharmaceutical manufacturers within 30 days, it is expected to face legal challenges. Industry professionals reference a similar proposal from Trump’s first term, which aimed to link Medicare payments for certain medications to the lowest prices paid by other countries. This proposal was blocked by federal courts for not adhering to the notice and comment process required by the Administrative Procedure Act. Thus, the immediate impact on drug costs remains to be seen.   As the rules associated with this new order take shape, we will continue to keep you informed about the potential effects these changes may have on your health benefits offerings.  If you have any questions, please contact your Cottingham & Butler representitive today.

Many myths exist about captive insurance – and most are simply inaccurate, unhelpful, and are holding far too many businesses back from achieving their best results. Regardless of the many misconceptions, we’re here to share the truth about member-owned group captives and the advantages they provide to best-in-class companies. Myth 1 – My Company’s Too Small for a Captive One prevalent perception about captives is that they are reserved only for the largest companies. While it’s true that single-parent captives are generally formed by larger organizations, small to midsize companies can also enjoy the benefits of a captive by joining other like-minded companies in a member-owned group captive. Group captives specifically exist to bring together mid-sized businesses so they can gain the insurance negotiating power of their bigger competition. Yes, certain types of companies are stronger candidates for group captive insurance than others– primarily well-performing businesses that actively invest in their safety programs. These best-in-class companies that remain in the standard market can actually end up limiting their growth in the long run by subjecting themselves to the same adverse market as other businesses that might not be of the same caliber. Myth debunked: When it comes to who is best suited for a captive, it’s not only for the largest organizations. The truth is, only the most safety-conscious, financially strong, and best-performing companies are a good fit.  Myth 2 – One Catastrophic Loss Will Bankrupt the Captive  What happens if you have a million-dollar claim while in a captive? Despite common perception—the captive is not likely to face bankruptcy. Ultimately, this myth stems from a general misunderstanding of how captives truly work. When people hear ‘self-insurance,’ they often assume that means they are on the hook for every potential claim and dollar spent. In reality, part of the members’ premiums are allocated to the group’s loss fund to pay for claims (up to a certain retention), and the remaining goes towards a re-insurance program that protects members from any larger losses. Some companies may hesitate to take higher deductibles or retentions because of perceived uncertainty. However, this is exactly how insurance is designed to work and is most cost-effective when you retain and proactively manage as much risk as possible, and only use insurance for catastrophic losses. Myth debunked: Catastrophic claims are often unpredictable and can happen to even the safest companies. In the captive, part of your investment is always in reinsurance to limit loss and protect members from larger-than-expected claims and any subsequent issues. Myth 3 – I’ll Be Stuck Paying for Everyone Else’s Losses  In the traditional insurance market, it’s no secret you are sharing risk with the entire industry – both the good and the bad. Regardless of your loss history, rates are impacted by the collective insurance marketplace, not your individual experience – meaning the best-performing companies are paying for those with poor performance and more claims. So, what’s different in the captive? The most crucial differentiator is that you know who your risk-sharing partners are. You choose them. Members are all similarly situated companies who share a commitment to safety and have common financial interests. Yes– by pooling your exposure and risk of loss, you have accepted the possibility of paying for the other’s losses. However, the captive is strategically managed to predict and control losses and members only assume risk in the smaller, more predictable loss layer – the remaining is protected by reinsurance. Myth debunked: In both the traditional market and in a group captive, there is risk-sharing. The difference is simply with whom. The captive is designed to group like-minded, safety-conscious companies that have a positive loss history and continue to manage risk and improve costs. Myth 4 – Captives Are More Expensive  As covered earlier, in the traditional insurance market, companies transfer risk to a third-party insurer that collects a premium and requires a deductible – if you have a good loss history, the premium you pay subsidizes the other insureds whose losses are not as good. This option gives you little control and your good performance is to the benefit of the insurance carrier. Click here to discover the Cottingham & Butler Captive Advantage! While the upside to the traditional market is simplicity and low start-up costs, the disadvantage is often exorbitant rate hikes, capacity issues, and claim disputes – all meaning more expensive premiums and sunk costs. Captives have proven to be less costly and more efficient because the structure provides a premium rate that reflects the organization’s unique exposures, as opposed to market rates that reflect industry averages and typical exposures. While it’s true that there are upfront costs in a captive, these initial costs should be viewed as an investment. Captive insurance is generally part of a company’s long-term strategy, where the investment into the strategy typically generates a return in the form of dividends. Myth debunked: Captives are a true performance-based insurance solution. It’s an investment that generates an ROI, not an expense like a traditional insurance program. A well-run captive will reduce insurance costs, improve cash flow and members will share in the underwriting profits that typically would go back 100% to your insurance carrier. Key Takeaways There are plenty of myths that exist about captives, most of which are designed to make the programs seem scary and risky, but it’s important to remember: Y ou don’t need to be a mega-corporation to qualify for a group captive, but your company should be financially sound and maintain a favorable loss history. Reinsurance is built into the captive to protect members from catastrophic claims events. Captive members share risk with only the best like-minded, safety-conscious companies that have a favorable loss history and are committed to managing risk and improving costs. A captive is a long-term investment that reduces insurance costs, improves cash flow, and rewards great performance by sharing in the underwriting profits.

Imagine the following scenario:  you’re in your office when you get a call from one of your foreman that OSHA has just shown up to your jobsite.  The Compliance Officer is telling your foreman that they are following up on an anonymous complaint and they would like to walk the jobsite to conduct an inspection.  Your mind races to try to figure out who could have made the complaint and what it could possibly be about.  You tell your foreman that you will get to the jobsite as soon as you can, but you know that it may already be too late to prevent a citation. Has this happened to you? If it hasn’t, it’s likely that it will. Under the Biden administration, OSHA is increasing its number of safety officers so that it can conduct more inspections. Furthermore, if a bill before Congress is passed then maximum fines could increase significantly. The bill proposes to raise the maximum fine for willful or repeat violations of OSHA workplace safety rules from $136,532 to $700,000, with a $50,000 minimum. The failure-to-abate fine would increase from $13,653 to $70,000. One violation could effectively put your company out of business, especially since the company is likely to receive multiple citations. OSHA typically prioritizes inspections based on 4 categories: Imminent danger – Reasonable certainty of a fatality — therefore top priority inspection. Fatality/catastrophe – A report was made to OSHA and you can expect an inspection ASAP. Complaints/Referrals – A worker filed a complaint about safety or health hazard — lower priority inspection. Programmed inspections – Covers industries with high injury and illness rates, specific hazard etc. This is the level of most inspections. What can you do to survive an inspection? First , do you have a written internal guideline for OSHA inspections?  If you don’t, create one immediately and make sure leadership, safety, superintendents, foreman and even your laborers and operators know what to do if OSHA shows up on a job site. Second , know how the inspection process works and what you should do to protect the company. OSHA does not and will not notify you of an inspection in advance.  In fact, there’s a good chance that before making their presence known to your crew that they have already watched your operations from afar.  You have the right to refuse the inspection and request that the officer get a warrant, but this is not advisable in most situations. There are three parts to an OSHA visit: The Opening Conference: The OSHA officer will identify themselves, show a credentialed badge, and state the purpose and scope of their visit.  Make sure that you write down the officer(s) name and serial number as you may not see this information again until a citation is issued. The Inspection or Walk Around : This is their primary purpose for the visit.  Review the scope of their visit and keep them within the scope – for example, take them directly to the area of the jobsite that they wish to see and take the most direct route to that area. The Closing Conference: This is where the officer will identify potential concerns and discuss next steps. The officer may request that you provide them with various documents within a certain time frame.  Ask the officer to make the request for documents in writing, such as in an email.  Be sure to provide only what is asked for.  This discussion may or may not occur the day of the visit. Third , approach this scenario knowing that OSHA is there to save lives and prevent injuries.  Getting defensive and combative is likely not going to be helpful.  Work with the officer in a manner of cooperation and partnership. Fourth , be prepared to address the critical areas the officer will focus on: Compliance issues Training records required by OSHA standards Records of injuries and illness – OSHA 300 log and 300A summary for 5 years. Medical exams when required by OSHA standards Proper PPE Proper posting of required notices – for example, the 300A summary  must be posted from February 1 to April 30th On the inspection tour or walk around, make sure you do the following: Walk with the CSHO and never leave them alone or without an escort. Make sure everyone is wearing the correct PPE including the CSHO. Identify and photograph the same conditions the CSHO does – and take detailed notes on what the CSHO is identifying and correct any unsafe conditions or behaviors immediately as this can build “good faith” with the CSHO.  WARNING – be careful because you do not want to agree that a hazard exists. Make sure the CSHO knows all photos are trade secrets. If an employee is to be interviewed, be aware they could be interviewed in private. However, if the person being interviewed is an 'agent' of the company—someone authorized to act on behalf of the company who can give direct orders or levy disciplinary actions (such as managers, supervisors, but not leads) -they have the right to have legal representation present during the interview. CSHO could attempt to increase the scope of the inspection, but try to keep them on task as discussed in the opening conference. If asked questions by the CSHO, do the following: Pause – think about your answer. Only answer the question asked. Avoid arguing with the CSHO – it will get you nowhere and you will likely lose. Once the inspection is over, you may not hear anything for several weeks or months because OSHA has up to 6 months to issue a citation. Citations and penalties can be issued only by the Area Director and will arrive via certified mail. As the employer, you are required to post the citations for 3 days or until abated– whichever is longer. Penalties may be reduced based on your good faith in work with the CSHO, the size of your business and your inspection history. As mentioned, there are several different violation types: Willful: This is bad because it means that you knew that there was an issue and that you intentionally and knowingly committed a violation. Serious:  There is substantial probability of death or serious injury and you likely knew or should have known the hazard existed. Other-Than-Serious: A violation has a direct relationship to safety and health, but likely would not cause death or serious physical harm. Repeated: A violation that is the same or similar to a previous violation – this could result in a significant penalty. Remember, there is an appeal process if you face citations. This could be informal or formal and could escalate up to an administrative law judge for a ruling. Even if you do not dispute the circumstances of the citation you can still dispute the classification of the citation.  For instance, you can ask that a Serious be reduced to an Other-Than-Serious. This will reduce the penalty and may make a difference in how future citations of a similar nature are classified. In order to survive an OSHA inspection, being prepared is critical. Have your guidelines written out and reviewed by your team.  Make sure that you or a member of your team are trained in OSHA rules specific to your business and can address issues before they become a violation. Work with an outside party to conduct a mock-OSHA inspection.  Some OSHA agencies in certain states will conduct these for you. This has the added benefit of helping build “good faith” should an actual inspection occur. Make sure you can document all of your safety training and that new hires and/or temporary employees receive safety training. Finally, be honest, cooperative and courteous. The OSHA officer has a job to do, just like you, and has a shared common goal - to make sure your employees go home safe to their loved ones. For further information on mock OSHA inspections or developing OSHA guidelines for your operation, please contact your Cottingham & Butler representative.

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