Developing Your NEMT Risk Management Program

There are many different reasons to have a comprehensive risk management program as a NEMT business owner.  The main reason is that a single misstep can wipe out everything you have worked so hard to establish in the form of an uncovered multi-million dollar lawsuit against your company.  Defense costs alone often reach six figures in no time at all.  A vast majority of NEMT companies drug test their employees prior to employement, post-accident and also when there is reasonable suspicion.  If you do these three things, you are eligible to become a certified drug free workplace.  This easily obtainable certification is an automatic 7.5% credit on workers compensation premiums.  On top of that, it makes your company more attractive to insurance companies and helps in our negotiations with underwriters to further drive down your workers compensation premium.  This credit occurs repeatedly year after year and also differentiates your company from your competition when you can prove that your drivers are certified drug free.  We can walk you through the entire process.

Going back to how one claim can eliminate your business, many NEMT business owners are unaware that many things are excluded from your insurance policies unless you buy specialized coverage.  Employment practices liability, or EPL, is a major exposure in today's litigious society.  These include things such as discrimination, wrongful termination, sexual harassment, and retaliation. Other additional actions which are alleged in these cases, such as libel, slander, or other defamation, invasion of privacy, mental anguish, infliction of emotional distress, loss of consortium, assault, battery, breach of contract, negligent hiring, supervision, promotion or retention in connection with any other employment-related claim are also excluded from your common general liability policies. 

An EPL policy can be obtained for an extremely reasonable premium that barely reachs four figures or probably about one quarter of what you are currently paying for one NEMT vehicle.  EPL premiums are determined by the number of employees as well as the quality of your company policies.  Our agency has developed templates for every applicable company policy needed for your business that we offer to our clients at no additional cost.  It brings our agency joy to protect your business and add value to your company.  We go above and beyond to make sure EPL policies are endorsed with a third party endorsement; they are otherwise left off. This endorsement means that there is also coverage if one of your clients, falsely or not, files suit against you or one of your employees alledging any type of the aforementioned acts such as sexual harassment.  EPL is just one of many risks that can hurt your business, lower your bottom line, or even close your doors.  We make sure this does not happen.

The Difference Between Standard Carriers and the E&S Market

There are two different kinds of insurance carriers in the world today.  The admitted or standard markets, which most of you will recognize as the Travelers, Hartfords, and Liberty Mutuals of the world.  These carriers follow guidelines set forth by each states Department of Insurance (DOI). These carriers are required to file their rates with the DOI, which then approves their use. The carriers must use these filed rates on all clients and cannot deviate. Admitted carriers are also a part of each states guarantee fund which provides for protection for policyholders if a company becomes insolvent.

 Admitted carriers often do not meet all the needs of many insurance buyers. Non-admitted insurance carriers (sometimes referred to as excess and surplus lines carriers) offer an opportunity for coverage for specialty risks that might otherwise be un-insurable. Non-admitted carriers do not have to file their rates with the DOI and thus they retain the flexibility to price risks according to their specific exposures. While these companies are not licensed by the DOI, they do have to go through an approval process that includes providing evidence of minimum capital and surplus requirements. When these requirements have been met to the state DOI’s satisfaction, the DOI may approve a company to conduct business in that state.  Non-admitted carriers also require all premium to be paid up front resulting in the client to be forced into a premium finance agreement which adds another 10-15% of costs to an already inflated premium.

The reason I went into this explanation is that up until recently, all carriers who agreed to provide insurance for non-emergency transportation companies were Non-admitted carriers.  That is, until now...