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The U.S. Supreme Court’s June 24 decision in Dobbs v. Jackson Women’s Health Organization overturned Roe v. Wade and Planned Parenthood v. Casey, which previously held that the Constitution prohibited states from banning abortion or unduly burdening access to abortion services during initial phases of pregnancy.  After the recent Dobbs ruling, states now have complete freedom to either allow or prohibit access to abortive care within their borders. At least 24 states have laws that can now be enforced barring abortion or imposing strenuous conditions.  Certain states (such as Oklahoma and Texas) now enable individuals to bring civil lawsuits against anyone who assists in the performance or inducement of abortion, including paying for or reimbursing the costs of the procedure through insurance or otherwise. We expect that this decision will also open the door for further state regulation regarding reproductive rights. In light of the Supreme Court’s decision, we recognize that some employers will want to continue to provide abortion-related benefits to their employees.  This Client Alert outlines various plan design options and other factors to consider. However, many of the issues surrounding these types of benefits remain open questions at this time. Legal challenges to these laws are already underway, and more are expected in the future. Action Steps As explained below, employers sponsoring group health plans should closely analyze any abortion benefit offered under their group health plans to ensure full compliance with applicable restrictions. Depending on the type of plan offered, employers may have some amount of discretion in enhancing or restricting coverage. Employers wishing to support employees seeking abortions through employee benefits may have to creatively examine alternative benefit structures if they find themselves in a state that prohibits abortion.  A review of non-benefit policies and practices may also be necessary to ensure a peaceful and productive working culture in this new “post-Roe” era. Group Health Plan Coverage How this change affects group health plan coverage offered by employers will be different depending on whether the plan is fully-insured or self-funded, as well as where the plan is issued, and where the employees work and reside. We recommend that employers carefully review their group health plans to understand what level of coverage for abortion is currently available. Also, to the extent an employer has employees in a state with particularly strong prohibitions on abortion, consultation with legal counsel is highly recommended. Fully-Insured Plans Insurance carriers will have to tailor fully-insured plans to provide coverage in accordance with applicable state law, based on the state where the policy is issued – not where the plan’s participants reside or work. Because some states will prohibit covering abortions (and other states will require such coverage), employers operating across several states may choose to obtain coverage from an insurer in the state that more closely reflects their desire to provide or restrict abortion coverage.  Of course, providing coverage for an abortion doesn’t necessarily mean that a participant may easily obtain abortive services if they live in a more restrictive state. Self-Funded Plans Because ERISA preempts state law, employers subject to ERISA offering self-funded health plans may largely ignore state insurance laws and choose whether or not to cover abortive services.  With that being said, there are a few caveats to consider before amending your plan: Non-ERISA employers (such as local government plan sponsors) will likely have to follow state laws and guidelines, much like fully-insured plan sponsors Self-funded plans carrying insured stop-loss coverage may experience carve-outs in those fully-insured re-insurance policies, as carriers will have to follow state law While ERISA plans do not have to follow state insurance laws, employers should carefully consider other state laws where their employees reside to understand if there is any other kind of potential risk. For instance, if a state imposes civil or criminal penalties on individuals or providers assisting with obtaining abortions, it is not yet clear whether such penalties could impact plans or plan sponsors covering abortive services. Alternative Benefit Strategies Employers with employees in states where abortion is illegal may consider different strategies to facilitate abortion access for employees and their dependents. Some employers are considering ways to cover the travel and lodging expenses relating to out-of-state abortions in lieu of actually covering abortive services, even though it is still unclear whether individuals can sue companies that cover travel expenses for legal out-of-state abortions.  What follows are descriptions of a few alternative strategies. Travel and Lodging Benefits through the Group Health Plan In a fully-insured plan, such benefits will be limited by the carrier’s policy and, in turn, affected by that state’s insurance laws.  In a self-funded plan, such travel benefits could be added.  However, remember that all benefits under a group health plan will be subject to ACA rules and Mental Health Parity rules, among other ERISA and IRS-related requirements, which could prove to be too restrictive in their own ways.  Careful analysis of the effects on plan administration and non-abortion benefits should be considered before choosing to cover travel and lodging under the group health plan. Health Reimbursement Arrangements (HRAs) Let’s say a fully-insured employer is prohibited from covering abortive services under state insurance laws.  Could that employer sponsor a stand-alone HRA to cover abortive services or the costs of travel to an abortion state? After all, an HRA is really just a self-funded health plan. Theoretically, yes, that might work.  A few words of caution: Remember that the HRA’s eligibility requirements must be tied to the group health plan or else it may not comply with ACA requirements. (Tangent: HRAs enjoy the status of being an excepted benefit if they are integrated with the group health plan; if they are not, they’ll be subject to the ACA’s annual limit requirements. And because an HRA is really just one big annual limit, compliance might not be possible). Understand that an HRA providing such coverage in conjunction with a High Deductible Health Plan could disqualify participants from being eligible to contribute to an HSA. Finally, under Section 213 of the Internal Revenue Code, the actual amounts an HRA may reimburse for travel and lodging expenses are limited to a relatively modest amount. Employee Assistance Plans (EAPs) It is possible to cover travel and lodging benefits under an EAP that is an excepted benefit, which would exempt those benefits from ACA requirements.  But to be an “excepted benefit,” the EAP: Cannot provide significant benefits in the nature of medical care or treatment, Cannot be coordinated with benefits under another group health plan, May not charge a premium, and May not require any cost-sharing contributions from participants. It is the subjective nature of the first requirement that may prove challenging to overcome.  Whether or not costly expenses related to abortion travel is considered “significant” may be too much of an unknown factor for an employer to risk taking on, as no plan sponsor wants to inadvertently turn their add-on EAP referral service in to a full-blown ACA-compliant health plan.  Employers considering this strategy will want to first consult with their EAP provider to determine potential viability. Taxable Compensation as a Means to Cover Abortion-related Costs The best way to stay clear of stringent IRS rules and burdensome ACA, ERISA and HIPAA laws is to simply give an employee more taxable cash. An employer could create a “wellness stipend” to provide taxable compensation to be used for abortion-related costs or to reimburse travel expenses in addition to other health-related expenses.  Since the benefit would be taxable, specific substantiation would not be required.  This might also serve the dual purpose of protecting the employer from the potential ramifications of a state civil or criminal penalty (if the employer truly didn’t know why an employee was receiving the benefit or how that employee was spending the money) while simultaneously ensuring an employee’s privacy. However, implementation could be tricky and inconsistent application of providing a stipend could appear discriminatory. Non-Benefit Employer Considerations In addition to health plan benefits, all employers will be wise to consider the impact of such a controversial decision on workplace culture and employee protections.  We strongly recommend that you work with your legal employment counsel and HR advisors to develop a checklist of policies and practices to review in accordance with federal, state and local laws.  While not exhaustive, the following are a few of the federal employment-related laws employers should begin to consider. Americans with Disabilities Act (ADA) Pregnancy alone is not considered a disability under the ADA.  However, a pregnancy-related impairment may be covered under the ADA from an accommodation standpoint. An employee seeking an abortion due to a disability may be entitled to take leave as an ADA-accommodation, unless such leave would result in an undue hardship to the employer. Family Medical Leave Act (FMLA) Employers (with 50 or more employees) covered under FMLA may have to provide protected leave for employees obtaining abortion-related care if their healthcare provider determines that they have a qualifying serious health condition.  When administering such leave requests, employers should remember to follow FMLA guidelines for obtaining certification and maintaining confidentiality of the employee’s medical information. National Labor Relations Act (NLRA) While employers can educate employees and coax their workforce toward creating a supportive and inclusive work environment, no employee can prohibit employees from talking with each other about the terms and conditions of their employment.  So, if an employer chooses to cover or not cover abortion-related services under their health plan, for instance, the NLRA provides employees with right to express their opinion to other employees about such a policy.  This protection extends to social media as well. Pregnancy Discrimination Act (PDA) The Pregnancy Discrimination Act protects women from being fired for having an abortion or contemplating having an abortion. It also prohibits adverse employment actions against an employee based on their decision not to have an abortion. The Act further covers reasonable accommodations for pregnant workers, but only if such accommodations are offered to other employees with similar situations.  Does this mean that the PDA would require an accommodation related to a pregnant employee obtaining an abortion?  While not totally clear, given the unprecedented nature of this situation, unpaid leave should be permitted for a pregnant employee to the same extent that other employees who are similar in their ability/inability to work are allowed to do so. This Client Alert is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

75% of commercial businesses are currently being underinsured by an average of 40% or more – per a recent CoreLogic statistic. Approximately 88% of total loss claims since the beginning of 2022 involved vehicles that were underinsured. Year to date, this is up from 53% underinsured in 2021, and only 33% underinsured in 2020. As the market for physical damage and commercial property insurance continues to face challenges— from premium increases to rapidly expanding demand— it’s crucial to keep in mind not only the factors contributing to these changes, but what steps your business can take to proactively address them. Underinsured values have become particularly prevalent, meaning motor carriers should take care to discuss vehicle and property values at the inception and renewal of their insurance, as well as throughout the course of their policy. Take a look at the key points below or contact a Cottingham & Butler representative to learn more. Physical Damage With most physical damage insurance policies written on the lesser of the stated amount or actual cash value, the dramatic increase in vehicle values and repair costs results in many vehicles being underinsured.  The end result is companies and individual Owner Operators involved in accidents where the truck is totaled, are not getting enough money to replace the totaled unit with similar equipment. The increase in the valuation of individual units is making current per location limits insufficient as well.  If you have a concentration of vehicles at an individual location, please review those limits for adequacy as well. Property With supply chain delays and costs of materials and labor increasing, it is likely that property values may be understated. Take a look at the price movement of building construction costs below, and note the enormous spike in costs for industrial and warehouse buildings. Be sure to proactively revisit your building values as well to ensure proper coverage upon renewal. Cargo Rising inflation has ultimately increased the cost of goods motor carriers are hauling. Review the index below, and be sure to review current per-load limits on cargo to be sure they’re all still adequate when compared to market increases. Contact a Cottingham & Butler representative today for assistance on any valuation questions or changes you may have.

If your company stores data and information digitally, you should have a cyber risk management program that addresses prevention, disclosure, crisis management and insurance coverage in the event of a data breach. Good cyber risk management requires the planning and execution of all 4 of these components. Develop Strategies to Prevent a Data Breach Your data breach prevention strategies may include encrypting all devices used by your employees, such as laptops, tablets and smartphones. Encrypting these devices will prevent unauthorized access if a device is lost or stolen. Unencrypted devices are often not covered by a cyber liability policy, so make sure you know whether you need to encrypt the devices or not. Your strategies may also include educating employees about phishing and pharming scams. Remind them not to click on anything that looks suspicious or seems too good to be true. Analyze your cyber risks from three different perspectives: technology, people and processes. Assessing these risks will give you a clear picture of potential holes in your security. Revisit and revise your plan regularly, because new risks arise often, sometimes even daily. Know Your Disclosure Responsibilities If you experience a data breach, you may be required to notify certain people. If your company is publicly traded, guidelines issued by the Securities and Exchange Commission (SEC) make it clear that you must report cyber security incidents to stockholders—even when your company is only at risk of an incident. The SEC advises timely, comprehensive and accurate disclosure about risks and events that would be important for an investor or client to know. It’s important to evaluate what information and how much detail should be released. Notifying a broad base when it is not required could cause unnecessary concern for those who have not been affected by the breach. Some extreme cases of a data breach may cause you to go further than just assessing and disclosing the information. You may have to destruct or alter data depending on its sensitivity. Have a Crisis Management and Response Plan Preparedness is key when developing your cyber risk management program. When you experience a data breach, you need to be prepared to respond quickly and appropriately. This is where your crisis management and response plan come into play. Determine when and how the breach occurred, what information was obtained and how many individuals were affected. Then assess the risks you face because of the data breach and how you will mitigate those risks. While managing a crisis, let your clients know what actions you are taking, but also be sure you’re not disclosing too much information. It’s a delicate balance. Focus on improving future actions—this will restore trust in your stakeholders and clients. Your in-house lawyers, risk managers and IT department should work together to create and refine your plan. Everyone should be on board and know their responsibilities when a breach happens. Protect Your Data—and Your Business Your cyber risk management program should include cyber liability insurance coverage that fits the needs of your business. Cyber liability insurance is specifically designed to address the risks that come with using modern technology—risks that other types of business liability coverage simply won’t cover. The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. Your cyber liability insurance policy can be tailored to fit your unique situation and can be written to include the costs of disclosure after a data breach. Contact Cottingham & Butler to learn more about cyber liability insurance and how you can protect your business from a data breach.

Cyberattacks on global supply chains can cause irreparable harm to an organization’s operational, financial, and reputational wellness. These incidents can occur even if your organization is practicing proper cybersecurity methods. Instead of attacking your organization directly, these cybercriminals take advantage of vulnerable suppliers or vendors in your organization’s supply chain to wreak havoc on key operations and compromise essential data. Supply chain risk has increased dramatically in the last decade, as the internet has become a necessary element of various business operations. What’s more, third-party breaches can be costly, increasing the average cost of a data breach by $207,411. Still, research shows this risk is largely being overlooked. While it’s not possible to totally eliminate supply chain risk, there are several steps your organization can take to reduce your supply chain exposure. Review the following guidance to understand what factors increase your organization’s supply chain risk, how to mitigate them and what to do if your supply chain is compromised. Where Does Supply Chain Risk Come From? Supply chain risk can stem from a variety of parties and practices within your organization, such as: Third-party services or vendors with access to information systems Poor information security practices by suppliers Compromised organizational software or hardware Software security vulnerabilities in supply chain management or among third-party vendors Inadequate third-party data storage measures Every organization has at least two levels of suppliers. This includes directly contracted suppliers (Tier 1) and the companies that supply to them (Tier 2). Very few organizations review the risk of their Tier 2 suppliers, leaving them vulnerable to supply chain cyberattacks. What’s worse, supply chain risk can increase dramatically a few months into suppliers’ contract terms and may only continue to increase throughout these contracts if such Tier 2 suppliers are not properly vetted for potential cyber exposure concerns. What Factors Increase Supply Chain Risk? A wide range of factors have the potential to elevate your organization’s supply chain risks, including: Complacency or inability of your organization or its suppliers to monitor and assess cyber risk Any changes in your organization’s cyber risk tolerance The increasing severity and frequency of cyberattacks The increasing sophistication and boldness of cybercriminals In the event of a supply chain cyberattack, cybercriminals may attempt to overwhelm your organization’s networks and servers to disrupt normal business activities. They may also try to copy, rearrange or destroy vital company data. Whatever their intent, a cyberattack on your organization’s supply chain can be costly and time-consuming. Understanding Your Supply Chain Exposure There are several ways in which your organization can review its supply chain cyber exposure. Consider the following best practices: Create a vendor inventory of all third parties and consultants with access to your organization’s IT network or sensitive data. Use a cross-functional, legal, compliance and privacy team to assist your organization in assessing its supply chain risk. Communicate with your organization’s vendors about their specific cyber risks and what measures they have in place to mitigate these exposures. Review the cybersecurity policies and procedures in place within your organization and its suppliers for effectiveness. Assess your organization’s physical and online processes to determine potential gaps in cybersecurity. Identify critical systems, networks and information within your organization to better understand how this data could be compromised and what actions are necessary to protect such data. Decreasing Supply Chain Risk Fortunately, there are some steps that your organization can take to help decrease its supply chain cyber risk. Be sure to implement these precautions: Incorporate cyber risk management into vendor contracts. This can include requiring vendors to obtain cyber insurance, having them notify your organization after a cyber incident and establishing clear expectations regarding the destruction of data following the termination of your contracts. Minimize access that third parties have to your organization’s data. Once a vendor or supplier has been chosen, work with them to address vulnerabilities and cybersecurity gaps. Monitor suppliers’ compliance to supply chain risk management procedures. Consider adopting a “one strike and you’re out” policy with suppliers that experience cyber incidents or fail to meet compliance guidelines. How to Respond to a Compromised Supply Chain If your organization’s supply chain becomes compromised or exploited by cybercriminals, follow these response measures to mitigate the damages and prevent future incidents: Mitigate first. This could include patching or upgrading software systems, disabling internet access, or moving applications behind firewalls. Contact your insurer immediately. Make sure to reach out to your insurer as soon as the incident occurs. Give them as much information as possible to help kickstart the claim process. Engage legal counsel. Consult your organization’s trusted legal professionals for additional guidance on adopting an appropriate response to the incident—such as whether to contact law enforcement or inform stakeholders. Enlist forensic expertise. Have forensic experts work with your organization to investigate the incident. These experts can help identify the perpetrator(s), determine potential cybersecurity gaps that led to the incident and offer tips for preventing similar supply chain concerns going forward.

The rates of Salmonella illness in the US have been a vexing challenge for many years. Despite setting goals for Salmonella reduction, the number of cases has remained stubbornly high. While a lot has been done to focus on. Salmonella in recent years, it has been a challenge on many fronts to drive the numbers down. Tackling the Persistent Challenge of Salmonella Contamination Salmonella is a problem that impacts both FDA and USDA-regulated food products but has recently become a major focus for USDA. As detailed in a 2014 GAO Report to Congress, USDA has taken several actions since 2006 to reduce contamination from Salmonella in poultry products: They reduced allowable Salmonella contamination in young poultry carcasses; developed an action plan to prioritize actions to reduce Salmonella; and published a final rule in August 2014 to modernize poultry slaughter inspections. Despite those actions, the September 2014 report was not only entitled USDA Needs to Strengthen Its Approach to Protecting Human Health from Pathogens in Poultry Products, it stated “Poultry products contaminated with pathogens cause more deaths than any other commodity.” Fast forward seven years later to October 2021, and little seems to have changed, with CDC estimating that Salmonella still causes more foodborne illnesses than any other bacteria (about 1.35 million infections, 26,500 hospitalizations, and 420 deaths in the U.S. every year), and it is estimated that over 23% of those illnesses are due to consumption of chicken and turkey. In an October press release, USDA itself conceded that: “Far too many consumers become ill every year from poultry contaminated by Salmonella”; and “Time has shown that our current policies are not moving us closer to our public health goal. It’s time to rethink our approach.” And this was after issuing the Guideline for Controlling Salmonella in Raw Poultry in July to help poultry establishments identify and implement pre- and post-harvest interventions to control Salmonella as part of their HACCP system and utilize microbial testing results to monitor the performance of the HACCP system and inform decision-making. Action Taken by the USDA So USDA is at it again: “mobilizing a stronger, and more comprehensive effort to reduce Salmonella illnesses associated with poultry products.” Intending to drive the industry closer to the national target of a 25% reduction in Salmonella illnesses, USDA has (again) set reducing Salmonella infections attributable to poultry as one of its top priorities. Included in its action items are: Seek stakeholder feedback on specific Salmonella control and measurement strategies, including pilot projects, in poultry slaughter and processing establishments. Encourage preharvest controls to reduce Salmonella contamination coming into the slaughterhouse. Consult with the National Advisory Committee for Microbiological Criteria in Foods for building on the latest science. Examine how quantification can be incorporated into its approach. Focus on the Salmonella serotypes and the virulence factors that pose the greatest public health risk. While it seems that USDA has been attempting to reduce Salmonella since the turn of the century (because it has been nearly that long), it is not just the U.S. that is contending with the issue. Salmonella has become a major cause of foodborne infection outbreaks worldwide with estimates of 93.8 million cases of non-typhoidal Salmonellosis and 155,000 deaths occurring every year in the world; 86% of these illnesses due to the consumption of Salmonella-contaminated food items. The most common serotype is enteritidis, especially in Europe, where it accounts for 85% of Salmonella cases, Asia (38%), and Latin America and the Caribbean (31%). Both the Center for Science in the Public Interest and a prominent plaintiff attorney have submitted petitions to USDA pointing out the importance of declaring specific Salmonella serotypes adulterants. So far USDA has not moved in that direction but likely they are heading that way. The recent announcement from USDA around Salmonella reduction is a cry that has been made before – so what is different this time? My view is that some members of the poultry industry have done a great deal to reduce Salmonella and have focused heavily, and appropriately, on the live side of the operation. After all, the greater the load of Salmonella that arrives on the birds, the harder it is to control it during processing. Time will tell where USDA goes this time; and at this point, they appear to be embarking on asking for data and pursuing more science. But as that process moves along, it would be wise for the poultry industry to continue to look at ways to mitigate Salmonella to the greatest extent possible. TAG and the dedicated Food & Agribusiness team at Cottingham & Butler work closely together to provide practical and cost-effective solutions and develop insurance programs based on the customized needs and goals of food and agribusiness clients throughout the world. We work together to strategically develop risk transfer (contractual and insurance) programs built to retain and/or backstop risk per the tolerance of each company. Risk mitigation is a core competency of both organizations and drives resiliency in the individual businesses and broader portfolio. The aforementioned article was an adaptation of an article published by TAG.

Preventing cyberattacks has become a pressing matter for employers across the globe, but especially for those in the United States. According to the Identity Theft Resource Center, the number of reported U.S. data breaches rose 68% between 2020 and 2021, increasing to a record-setting 1,862 incidents. Of these breaches, 83% involved sensitive information, such as Social Security numbers. These breaches targeted various organizations and industries, including those in manufacturing, utility services, and finance. Essentially, any business that retains potentially valuable information could be a target; cybercriminals are frequently looking for the personal information of everyday citizens to sell or use to gain access to other systems. Oftentimes, cybercriminals breach organizations via their employees; all it takes is one employee clicking into a phishing email (i.e., a fraudulent message intended to trick recipients into compromising important data). This is where HR comes in. HR teams are often tasked with communicating policy updates and workplace expectations. When it comes to cybersecurity, HR is naturally suited to partner with IT and provide basic educational resources. This article offers tips to help HR teams in preventing cyberattacks and protecting employees and their organizations. Understand the Risks & Have a Backup Plan While it’s true that cybercriminals frequently target individuals’ personal information, that’s not their only goal. Sometimes, malicious actors will then take that personal information and use it to gain access to other secure points—potentially affecting other systems beyond the breached organization itself. For instance, a cybercriminal may steal an employee’s login and password, then use those details to access customer databases or even critical infrastructure. A recent example of this came in 2021 when cybercriminals took down Kronos, the ubiquitous timekeeping software. With the cloud-based system down globally, employees couldn’t clock in or out—time punches were simply inaccessible. This proved very disruptive for payroll and time tracking. Yet, the larger takeaway is that even if an employer does everything right, they can still be impacted if a vendor experiences a cybersecurity breach. That’s why HR teams need to think about the vendors and systems they rely upon when preventing cyberattacks. These systems may include timekeeping software, case management software or learning management systems. Consider what would happen if any one of those tools stopped working or became inaccessible. How would that impact operations? Considering these potential scenarios can help HR teams better strategize their responses. For instance, if timekeeping software were to break down, perhaps employees would be required to use an HR-provided paper form to track their time. Additionally, with the vulnerability of cloud-based systems, HR teams can think about regularly backing up and archiving critical information, including customer details, time-tracking data or transaction receipts. Essentially, if a vendor system breaks down, HR still needs to ensure day-to-day operations can run smoothly. Develop Cyber Training and Contingency Plans Preparation is key in preventing cyberattacks. This primarily entails ensuring monitoring and security measures are in place to prevent breaches and detect when they occur. While this preparation is a responsibility for IT, HR teams can partner with them to help contribute to cybersecurity in their own way: employee training and contingency planning. Every employee in an organization should be trained on proper cybersecurity protocols and best practices. This includes knowing how to spot a phishing scam, maintaining strong passwords, using unique passwords for different logins and reporting suspicious database activity. While HR teams likely aren’t comprised of IT experts, they can still help disseminate these and other cybersecurity best practices to employees. Even basic precautions can make a huge difference in protecting against breaches of critical data. However, not every breach is preventable, nor are all breaches the same. It’s one thing for a cybercriminal to get a list of first names; it’s another thing for them to steal both names and Social Security numbers. Moreover, employers can still have their data compromised even if they take all the right steps. After all, a breach may occur at a third-party vendor, a situation over which employers have no control. This means it’s also vital for HR teams to strategize about cyberattack contingency plans. Essentially, these plans can help employers make sense of a data breach once it occurs and kick off the recovery process. Generally, a cyberattack contingency (or response) plan should cover the following aspects: What data has been impacted? How sensitive was the data (i.e., does the breached data include addresses, Social Security numbers or banking information)? What is the employer’s obligation to report the data breach (i.e., sometimes customers, employees, the government or all the above need to be notified)? Based on the type of data breach, how quickly must the incident be reported to applicable parties? Depending on an employer’s state and industry, the answers to these questions will vary. That’s why it’s essential to address these issues in a cyberattack contingency plan before a breach occurs. Employers should speak with legal counsel for help understanding their coverage risks. Click here to learn more about Cottingham & Butler’s free Cyber Security Diagnostic Assess a Breach and Be Responsive to Employees If and when a data breach occurs, HR teams must stay calm, as employees will be looking to them for messaging and next steps. HR will need to respond to employee concerns about the compromised data; other teams will likely address external messaging while HR focuses internally. More specifically, a data breach that affects an organization almost certainly will affect its employees, even if the compromised data seems unrelated to staff. That’s because employee credentials are often stolen to access larger databases. While employee credentials may not be the intended target of a breach, they can still get swept up during the cyberattack along with other pieces of personal data. In other words, regardless of the type of data breach or its scope, employees may have concerns about their own information when one occurs. Therefore, HR teams should be ready to field employee questions related to a breach and have meaningful response measures in place. For instance, if employee data is compromised (potentially or actually), employers may provide free identity theft protection or credit activity monitoring services to their staff. Conclusion Cyberattacks aren’t going away anytime soon. They’re likely to increase. According to the Identity Theft Resource Center, ransomware-related cyberattacks have doubled during each of the last two-year periods. This means now is the time for employers and HR teams to prepare for eventual cyberattacks by training employees and solidifying contingency plans. For more information, reach out to a Cottingham & Butler representative today.

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 job site.  The compliance officer is telling your foreman that they are following up on an anonymous complaint and they would like to walk the job site 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 job site 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 likely will—especially since construction is considered to be a ‘high-risk’ industry. Navigating OSHA Inspections in the Construction Industry 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 a 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; a lower priority inspection. Programmed Inspections – Covers industries with high injury and illness rates, specific hazards, 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. There’s a good chance that before making their presence known to your crew 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. 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 job site 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 timeframe. 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 examples, the 300A summary must be posted from February 1st 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 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 the 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. 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, pause and think about your answer, only answer the question asked, and 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 means that you knew there was an issue and that you intentionally and knowingly committed a violation. Serious – There is a 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.  TIP: 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. 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 violations.  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.

Employers across the country are facing a pronounced issue right now: too many open positions and not enough workers. On its face, it might seem like there are not enough workers available for jobs—hence all the openings. But, confoundingly, that’s not the case. The unemployment rate is still hovering just below 5%, translating to around 7.5 million unemployed Americans, according to the Bureau of Labor Statistics. Additionally, several key COVID-19 initiatives ended at the end of summer—expanded unemployment benefits ceased, and children returned to in-person classes. As such, many economists expected workers to be spurred back into the workforce this fall. That’s decidedly not been the case; while some individuals are returning to work, others are quitting in record numbers. This article explores the current labor market, offering potential reasons why individuals have been slow to return to work despite available positions and suggesting ways for employers to attract some of these workers. Factors Impacting Labor Shortage The current labor shortage is an interesting situation. On the one hand, there technically isn’t a shortage of labor, given the nearly 8 million currently unemployed workers. On the other hand, countless workplace openings haven’t been filled. In that sense, there is certainly a labor shortage. This section hones in on potential contributing factors, many of which stem from the COVID-19 pandemic. Fear of Contracting COVID-19 One obvious reason for the labor situation may be COVID-19-related fears. Some workers are simply afraid of contracting a serious case of COVID-19 at work. To some, remaining unemployed longer outweighs the risks of taking an in-person job. However, as more Americans get vaccinated, this may become less of a concern. Comfortable Savings During the pandemic, much of the country was in some sort of lockdown, with restrictions put on travel, gatherings, and business operations. In effect, many activities people enjoyed were suspended for nearly a year. That meant all the money that someone might spend on eating out, going to the movies, or attending concerts went into personal savings. Plus, individuals received generous stimulus checks and had access to enhanced unemployment benefits during this time, which also contributed to savings. Now, some workers are relying on those accrued savings to remain out of the workforce. Essentially, they are using their assets to hold out for a desirable job. Under normal circumstances, these people may have taken the first available position. But, with a savings safety net, they are able to wait longer. Reprioritized Worker Desires The COVID-19 pandemic caused workers to reevaluate their priorities, contributing to the labor shortage. Suddenly, workers began to rethink their priorities and the value of their labor. As the pandemic endured, a common thought was, “Is this job worth my mental and physical health?” Now, even as employees who were laid off are offered their previous positions, the answer among many has been a resounding, “No.” Paired with accrued savings, workers are now able to be more discerning with the jobs they accept. As such, a significant number have chosen to quit their current jobs while they search for more fulfilling options. According to several surveys, employees are looking for the following advantages when job hunting: Scheduling flexibility and/or telework options Access to employee benefits Greater compensation Job fulfillment Continued Caregiving Duties Finally, the COVID-19 pandemic has also affected the labor market through childcare issues. While many schools have returned to in-person learning, some have not. On top of that, some daycare facility rates have shot up due to staffing shortages and an influx of parents seeking child care. For some parents, the costs of daycare or the risks of in-person learning are too great. It may be more cost-effective to remain an at-home caregiver for a bit longer instead of returning to the workforce right now. Potential Employer Solutions Cumulatively, the factors contributing to the current labor shortage amount to more leverage for workers. Some workers realize that employers are desperately trying to fill positions. In turn, those workers are leveraging their labor to obtain positions they value more—holding out for the right offer. So, employers need to do what they can to make their open positions and workplaces ones that employees desire. Doing any less may severely impact both employee attraction and retention. That means implementing some of the aspects employees say they want, including the following: Scheduling and Work Location Flexibility During the height of the COVID-19 pandemic, many workplaces that were able to stay operational went remote. This meant sending most employees to work from home. Now that workplaces are reopening, many of those employees do not wish to return to in-person work. Instead, formerly remote employees want to retain their status. This leaves employers with a couple of options: allow telework for some positions or introduce a hybrid schedule (i.e., require some in-person days, allowing telework the rest of the week). In addition to helping cater to employee desires, telework also expands candidate pools, adding another incentive for employers. When a position can be done from anywhere, an employer doesn’t need to restrict hiring to a specific geographical region. It also enables employers to retain workers who may be interested in moving outside of a workplace’s region. Benefits Access Employee benefits are coveted assets in any workplace. Even narrow packages that just include health care can be supremely valuable among employees. They are valued even more by workers without access to them, such as part-time or service sector employees. In fact, access to employee benefits, or a lack thereof, is one of the reasons some workers have held off on returning to former positions. After living through a pandemic, it’s not hard to imagine why individuals aren’t eager to seek in-person jobs that don’t offer health care. Employers can consider how employee benefits packages might appeal to the kinds of workers they need. This could mean potentially expanding benefits options to some employees, such as part-time workers. Or, if an employer doesn’t offer any benefits, it might be worthwhile to consider adding some. Doing so could make a difference when trying to fill open positions or retain top talent. Greater Compensation Compensation is often brought up when asking employees what motivates them for obvious reasons. Simply put, individuals will likely respond to pay increases. If an employer has the budget for it, they can consider upping pay rates to attract workers or retain top performers. Alternatively, employers can think about other means of compensation—basically, perks or value-adds that increase the worth of a position. Examples of such perks include: Generous time off Bonuses for meeting productivity goals Periodic catered lunches Company-sponsored team outings Free beverages or snacks in the workplace Ultimately, employers should look for opportunities to demonstrate that they value their workers. Increasing compensation through the above means or otherwise can go a long way to showing that appreciation. Job Fulfillment Another attraction and retention strategy is improving worker perceptions about job fulfillment. Essentially, employers need to help employees answer the question, “Why is this job important?” The answer to that question will depend on the workplace and position, but there are some general ways employers can help in this regard. Namely, employers can directly address the matter in job descriptions by explaining how the position helps customers or a larger goal. Employers can also consider launching a branding campaign to help tell an important story. This could mean updating brand messaging, promoting certain initiatives or taking action on social issues. Summarily, such efforts help illustrate the values of a workplace. And when presented with a number of similar employers, workers are likely to decide where they want to work based on which company shares their values. Employer Takeaways The current labor shortage is due to several overlapping factors, many stemming from the COVID-19 pandemic. However, it’s not a traditional labor shortage in that there are still many unemployed individuals. The real crux seems to be that workers are leveraging the moment to obtain better jobs. It’s unclear how long workers will remain selective with their labor. Realistically, savings only last so long and, with ample vaccine availability, the pandemic may be under control soon. Workers may be compelled back into the workforce sooner rather than later. Yet, this may not be the case—the labor shortage might last months longer than anticipated. Therefore, it’s in employers’ best interest to listen to the desires of unemployed workers, such as flexibility and benefits. Understanding these drivers will be critical to attraction and retention efforts. At the end of the day, if an employer turns a deaf ear to what employees are looking for, they may be limiting the applicants they receive—both in terms of quality and quantity. In turn, this can severely impact an organization’s ability to grow and succeed. Reach out to Cottingham & Butler for more attraction and retention guidance.

‘Nuclear verdicts’ are increasing in frequency and getting bigger all the time. But what are ‘nuclear verdicts’ and why are they increasing? In a May 21, 2021 article on riskandinsurance.com, entitled “COVID-19 and Nuclear Verdicts: Disastrous Combination or Phantom Fear?” author Kiara Taylor noted: “Although a generally accepted definition of a nuclear verdict is one that exceeds $10 million, this arbitrary damages threshold fails to capture the problem adequately. A nuclear verdict is the classic disproportionate response: it so far exceeds a reasonable damages amount that only emotional or punitive juror motives can adequately explain it.” Social Inflation, Nuclear Verdicts, and Industry Turmoil Taylor goes on to identify a relationship between nuclear verdicts and another disturbing industry trend– social inflation. Put simply, litigation, insurance costs, and premiums all increase as society’s perceptions about what insurance covers expands.  As Taylor notes: “Social inflation and nuclear verdicts feed off each other in a vicious cycle of more frequent and escalating damages awards.” This poses enormous issues for the insurance industry.  With juries rendering more nuclear verdicts, insurance costs are increasing significantly, resulting in skyrocketing premiums, “which in turn threaten the continued existence of insurance industry clients, with the trucking industry offering a prime example.” The assertion that damages awards are escalating is well-supported by research.  According to a June 2020 research paper published by the American Transportation Research Institute (ATRI), entitled “The Impact of Nuclear Verdicts on the Trucking Industry”, the average size of verdicts from 2010 to 2018 increased from just over $2.3M to just under $23M – an increase of nearly 1000%. Escalating Damages and Industry Implications While there have been multiple nuclear verdicts over the last decade, with the largest ones ranging from $90 million to over $280 million, they were all trumped in a big way this past summer by a Florida jury that reached a verdict of $1 billion in a case involving a fatal trucking accident in 2017 wherein a teenager was killed by an inattentive truck driver while stopped in traffic for an accident involving another inattentive truck driver who was driving without a CDL and had a history of several prior crashes. Even though the driver whose truck collided with the teenager’s car was on his 25th hour of driving, couldn’t read English, had cruise control set to 70MPH, and didn’t brake until one second before the crash, the bulk of the verdict was for punitive damages against the truck driver that caused the traffic backup. As the frequency and size of nuclear verdicts increase, excess insurance carriers have fled the market, making excess insurance coverage both unaffordable and unavailable for many trucking companies.  This has forced even the largest trucking companies to reduce the amount of insurance coverage they carry, leaving them exposed and unprotected against a nuclear verdict.  Most trucking companies, if faced with a judgment that is millions (or tens of millions) of dollars in excess of their insurance coverage, would have to go out of business because they wouldn’t be able to pay it. Strategies for Dealing with Nuclear Verdicts So what can be done about it?  As stated in a Caseglide blog entitled, “What is a nuclear verdict?,” better communication and collaborative dialogue between both the defense counsel and claims teams can help mitigate the risk of a nuclear verdict. When a claims leader is informed late in the game that they could, and should, have settled and now they are headed to court, the results can be catastrophic. Along this same line of reasoning, I think Kiara Taylor hit the nail on the head when she wrote: “Pre-trial settlement is the easiest way to avoid a nuclear verdict.” Cottingham & Butler, with its dedicated team of Claims Advocates, can help with implementing both the mitigation and the avoidance strategies by encouraging and facilitating better communication and collaborative dialogue between the insured, the claims team, and defense counsel, and by encouraging pre-trial settlement all along the way.

The practice of contracting drivers has been standard since the mid-1990s and has helped trucking companies shift risk while providing drivers the freedom to operate a business of their own. In recent years, this model has been under attack, the most notable litigation being California’s Assembly Bill 5; which essentially would eliminate the traditional leased owner-operator model by stating independent contractors must do work “outside the usual course of the hiring entity’s business”. The next great challenge for the transportation industry relies on addressing these complexities to meet demand.  With labor laws changing and evolving, navigating who to employ– and how– remains a critical point of the hiring process.  According to American Trucking Association this past May, we are short 60,800 drivers.  If trends continue with freight forecasts, we could have a shortage of 160,000 drivers by 2028. So what options are available? One answer is other trucking companies. Freight brokers have long enjoyed the virtually unlimited capacity of their model.  The downfall has always been the consistency of freight for the trucker.  What if you could combine the benefits of freight brokers, and keep a consistent partner and stream of freight for the trucking company? Enter the Sub-Hauler Model The trucking company with the shipping contract turns itself into a third-party logistics company (3PL) or freight broker.  A dedicated cartage agreement or brokerage agreement is used to contact the sub-hauler’s trucks to the 3PL or freight broker.  The sub-hauler maintains their own authority, trucks, drivers, insurance, DOT compliance, and safety responsibilities. What makes this any different than any other brokerage/carrier arrangement? The main difference is consistent capacity and sub-hauler access to cost-saving products and services not available through common broker/carrier relationships.  The 3PL or brokerage must promise to keep the sub-hauler trucks filled with freight and in turn, the sub-hauler must agree that at least 75% of his revenue will be generated through the 3PL or broker. The sub-hauler can then access fuel discounts, safety resources, insurance, and equipment financing using the buying power of the 3PL or broker. Before you jump headfirst into the sub-hauler model, consider these items: Will you have enough freight to keep your sub-haulers at capacity? Do your shipper contracts allow you to broker freight? If not, you may still use sub-haulers; however, a different type of authority will be required. What type of operating authority will you need, freight broker or freight forwarder? What type of sub-hauler vetting process should you put into place? Will you use a registry monitoring service for authority and insurance compliance? Will sub-haulers use your trailers and need trailer interchange? What services, programs, and discounts should you create to attract sub-haulers? If converting leased owner-operators to sub-haulers, how much-increased revenue is needed to offset the costs of sub-haulers operating under their own authority (IFTA, IRP, permits, insurance, etc). To learn about how your owner-operator risk management strategies stack up against the best in the business, complete our virtual Risk Scorecard Assessment.

Roadcheck is an annual program conducted by the Commercial Vehicle Safety Alliance (CVSA), best described as a 3-day blitz held across the United States, Canada, and Mexico, taking place this year between May 4 – 6. It brings together roughly 13,000 inspectors across North America to focus on commercial vehicle inspections. The primary emphasis of this year’s Roadcheck is lighting on the vehicle side, and Hours of Service on the driver side, highlighted this year due to the fact that they topped the violation list during last year’s event. Vehicle Focus Drivers must remain inspection-ready on every trip. It’s the same mindset the office staff need every day– always audit ready, never knowing when something could happen to bring an investigator in. So what are some ways drivers can better prepare? Here’s an example of a pre-trip process to refresh your drivers’ minds, and maybe help them examine their current routines. While lights are not specifically listed here, a proper inspection should include the light check as they circle around the truck and/or trailer. Remember– it doesn’t matter if it’s a pre-trip, en-route, or post-trip inspection. The driver should have one inspection routine and always follow it. Inspectors continue their vehicle inspection on lighting, which accounted for 12% of all vehicle violations in 2020. Violations were deemed out-of-service (OOS) at a 7.66% rate. It makes sense that Hours of Service is also being emphasized this year, considering that this is the most cited vehicle violation of thus far, currently exceeding 150,000 violations just one quarter in! Two more violations also land in the 2020 Calendar Year Roadside Inspection Vehicle Violations Top 10 Red is displayed only at the back. Blue lights are reserved for law enforcement and are not legal on a CMV. It used to be, in Iowa for example, that you would be violated for any light out. This has now changed. Procedures are now that you would only be cited for mandatory lights that are inoperable. LEDs (light–emitting diodes) are longer lasting, brighter, smaller, and more efficient. However, they do not get hot like the incandescent lights, so in snowy weather, drivers have to remember to clean the lights off from snow build since it is no longer “automatic” from the light heat. Diodes make up the lights in an odd number. The regulation requires that half plus one needs to work. Therefore, if you have a 9-diode light, 5 need to be operable. Regulations on required lamps and reflectors can also be found in 393.11 at eCFR – Part 393. Be sure to utilize the reference table that breaks down the allowable colors for the various lamps. White, amber, and red colors and locations are clarified along with location, positioning, and vehicle types. Driver Focus The driver emphasis this year is hours of service. As stated above, the topic was selected due to high violation activity. The 2020 Calendar Year Roadside Inspection Driver Violations Top 10 also include three violations here with 12% of the violations and accounting for many Out-of-Service’s. False logs have always been a problem, and ELDs haven’t solved that… just improved and changed it. A big contributing factor to the false log violation is improper personal conveyance (PC) use. Remember that, in order to allocate time as personal conveyance, it really needs to be personal. Any activity in furtherance of business cannot legally be logged as personal conveyance. FMCSA has released a helpful section on its website that further breaks down this regulation. Be sure to reference this material as a refresher for your drivers, or to glean information for your driver orientation program. Other false log violations during audits come in from controlled substance and alcohol violations not getting logged as on-duty time. Log audits, roadside or office, also see fueling and roadside inspections causing false log violations. Drivers need to properly allot the time they spent on various functions. Plus, remember anything an owner-operator does in the furtherance of business is on-duty time of one sort or another. Let’s refresh what the on-duty definition is. § 395.2 Hours of Service Definitions On-duty time encompasses all time from when a driver begins to work or is required to be in readiness to work, until the time the driver is relieved from work, as well as all responsibility for performing work. On-duty time shall include: All time at a plant, terminal, facility, or other property of a motor carrier or shipper, or on any public property, waiting to be dispatched, unless the driver has been relieved from duty by the motor carrier; All time inspecting, servicing, or conditioning any commercial motor vehicle at any time; All driving time as defined in the term driving time; All time in or on a commercial motor vehicle, other than: time spent resting in or on a parked vehicle, except as otherwise provided in §397.5 of this subchapter; Time spent resting in a sleeper berth; or up to 3 hours riding in the passenger seat of a property-carrying vehicle moving on the highway immediately before or after a period of at least 7 consecutive hours in the sleeper berth; All time loading or unloading a commercial motor vehicle, supervising, or assisting in the loading or unloading, attending a commercial motor vehicle being loaded or unloaded, remaining in readiness to operate the commercial motor vehicle, or in giving or receiving receipts for shipments loaded or unloaded; All time repairing, obtaining assistance, or remaining in attendance upon a disabled commercial motor vehicle; All time spent providing a breath sample or urine specimen, including travel time to and from the collection site, to comply with the random, reasonable suspicion, post-crash, or follow-up testing required by part 382 of this subchapter when directed by a motor carrier; Performing any other work in the capacity, employ, or service of, a motor carrier; and Performing any compensated work for a person who is not a motor carrier. Remember that the September 29, 2020 HOS revision didn’t change the hours rules. The 11, 14, 60/70, 30-minute break, and passenger driver rules remain as is. It merely revised four guidelines on how the particulars are evaluated. This includes: The 30-minute break after 8 hours of driving is to be satisfied with a driver using a 30-minute on-duty break rather than the previous 30-minute off-duty period. The sleeper berth exemption offered additional flexibility in allowing a 7/3 split along with the 8/2 split. The Adverse Driving exception was modified by extending two hours to the maximum window during which driving is permitted. The short–haul exemption matched for the CDL driver and the non-CDL driver short-haul rule allowing the driver to lengthen the maximum on–duty period from 12 to hours and extend the distance to 150 air miles. Work with your drivers now. Evaluate your Hours-of-Service activity on your monthly violation statuses from your log reviews. Review your CSA HOS activity to see the kind of activity you have out there. Follow up with backup drivers that were previously coached post-violations – either roadside or in-house during your log audit reviews. Consider implementing some inspection days before Roadcheck 2021 starts on May 4th, and get the trucks in, without notice, to see what the equipment looks like as it rolls back in. Can you and your staff find some time to do spot checks out on the road in the next couple of weeks to see how the equipment is looking en route?  However, if you decide to prep for the event, make it as beneficial to your fleet and drivers as possible so you come back with clean inspections and limited infractions noted. Stay safe out there, and happy trails!

Independent Contractor Operating Agreements (ICOA) aka Owner-Operator Lease Agreements are governed by specific laws within the Federal Leasing Regulations. Violate these provisions and you may find yourself in hot water in the form of a class action lawsuit. According to transportation legal specialist Greg Feary of Scopelitis, Garvin, Light, Hanson, and Feary, the average cost to defend a class action lawsuit for violating truth in leasing laws is $25,000 per month. Cases normally drag on for several years and end with 6 to 7-figure settlements. Over 100 contractor v. motor carrier class action cases are active today. What steps can you take? Find out if your agreement meets the Federal Leasing Regulations. The Contractor Services Team at Cottingham & Butler can perform a checklist review of your agreement and advise if further action should be taken. If your agreement needs work, we can put you in touch with attorneys to revise your agreement at a discounted rate. A quality lease agreement might cost anywhere from $3,000 to $20,000 depending upon your situation. Compared to the cost of defending a class action, this is money well spent. Once you have a quality agreement in place, have an attorney review your lease at least every 18 months. Case outcomes and changes in state laws require regular tweaks to your agreement. We suggest budgeting $1,500 per year for these reviews. To learn about how your owner-operator risk management strategies stack up against the best in the business, complete our virtual Risk Scorecard assessment.