Insurance & Personal Injury Articles

When businesses enter contractual agreements, it’s usually because there’s an initial meeting of the minds, suggesting the relationship will be mutually beneficial. But the fact that thousands of business-related lawsuits are filed each year is evidence that such relationships can and do derail — tying up valuable time and resources in litigation.

Today’s court system is encumbered by high costs, long delays, aggravation and loss of privacy. Courts have recognized these impediments and many, including western Wisconsin’s, have concluded that alternative dispute resolution (ADR) is a more attractive option to be exhausted before working through the courts. Considered cost-effective, fast, flexible and fair, ADR is the most popular method for resolving disputes in this region.

A popular form of ADR for businesses is arbitration. Frequently, businesses will choose to include arbitration clauses in contracts, ensuring disputes will be resolved quickly and cost effectively. The clause requires that in the event of a dispute the parties would select an arbitrator to hear both sides of the issue and determine a binding resolution. Courts can and do enforce arbitration decisions.

Mediation is another form of ADR that also may save time and money. Much like arbitration, a mediator is chosen to hear both sides of the issue. Unlike arbitration, a mediator will try to facilitate or negotiate between the parties to help them reach their own resolution. The mediator has no power to make decisions.

Wisconsin law mandates courts to consider or order ADR in every case filed in the state. Since mediation is less cumbersome and less expensive, judges will order it most of the time. Mediation is frequently effective because in the majority of cases, parties have engaged in little discussion of settlement prior to the case being filed. In fact, mediation is successful the majority of the time on the first day. In other cases, it has set the stage for people to begin thinking about resolution and will often lead to resolution within a month of the initial session.

Because mediation is less expensive, courts rarely order arbitration. Mediation is just a matter of the parties getting together in an office. Arbitration typically requires more time because it’s similar to a mini-trial, with witnesses, research and written arguments. Nevertheless, it may be a better option for businesses looking for protection contractually because it prevents lawsuits from being filed, assures an unbiased party will hear both sides before issuing a binding decision, and provides a fast and inexpensive resolution when compared with the courts.

Handling costs of the arbitration is usually agreed upon in advance. Costs of mediation are usually split, with each party handling his or her own attorney’s fees.

Parties in an arbitration case will benefit from having their own legal representation. In addition to preparing arguments and interviewing witnesses, lawyers can be key in selecting an arbitrator — or a mediator in the case of mediation. They will be familiar with the people who do arbitration and mediation in the region and can help identify someone experienced in the area of law relevant to your dispute, whether it be employment, environmental, personal injury, family law or another area.

Alternative dispute resolution is a valuable tool to bring about another meeting of the minds should your business relationships take an unexpected turn. With government regulations, taxes, employment and other issues demanding attention, businesses today face many distractions from their core business. ADR offers a quick, cost-effective method to keep such distractions — at least those arising from lawsuits — to a minimum.

Reprinted with permission from the River Valley Business Report, Winter 2002.

I was in a car accident last week and suffered whiplash and a broken arm. The accident was the other driver’s fault, and I have his insurance information. Is that enough or do I need a lawyer?

An attorney may be able to help settle claims even in minor motor vehicle accidents, although having an attorney is not necessary.

"I’d recommend an attorney if you have a question about the fairness of a settlement offer or if you just feel the need for expert advice," said attorney Brian Weber.

Immediately after an accident, you should gather facts about what occurred, said Weber. "A lot of people get out of the car and announce it was their fault. They may be in shock and not realize what really happened. But what they said goes on the record."

Get names of witnesses and an idea of their statements, along with insurance information from other involved parties. Also, seek medical attention if you suspect an injury. With some soft tissue injuries not showing up until later, the sooner you get problems recorded, the better.

"It’s important to tell your doctor everything. "If it is not medically documented, it will be difficult to prove you should be compensated," Weber said. "However, do not minimize or exaggerate your injuries. That can make everything you say questionable to parties with whom you are negotiating a settlement as well as in court."

When should you settle your personal injury case? You can decide the property issues quickly, but wait until your doctor says you have reached maximum healing to settle injury issues. If you discover a permanent injury after you’ve signed a settlement, it can’t be changed.

A Johns, Flaherty & Collins lawyer is available to represent clients in cases or to review settlement offers.

"If you are thinking about signing a release for injuries, that’s a good time to call an attorney. It’s important you understand everything you are giving up by signing the release," Weber said.

What should you do first after an automobile accident? "You should do what any good person
would do: make sure the other party is OK," said attorney Joe Veenstra, who often works with
clients involved in motor vehicle accidents. 

Beyond that immediate compassionate response, Veenstra has suggestions that may help you
should a personal injury claim follow:

• Do not leave the scene of the accident.
• Carry adequate automobile insurance that also covers uninsured and underinsured drivers.
• Seek medical attention if injured and carefully follow directions from your doctor. Keep your
  medical records and bills and log pain and suffering. Also note lost time from work and if you
  cannot participate in your usual activities.
• Take photos of your injuries and of your vehicle, including items that might have been
  damaged inside the car.
• Report the accident to your insurance agent as you could lose coverage if you do not
  cooperate with the company.

After an accident, you must provide your driver's license and proof of insurance but you do not
have to make a full statement to the officer that could implicate you.

"You cannot obstruct an officer, but you don't have to do the officer's job," Veenstra said.

In most instances, your insurance company provides a lawyer for you in the case of a lawsuit.
But if you drove while intoxicated, or took a higher dose of a medicine than prescribed, you
may want to have your own attorney.

"If you are concerned about some criminal liability, you should contact your own attorney," he
said.

This legal professional can advise you about what information to provide to the police officer
and insurance company.

by Michael L. Stoker, Attorney, Johns, Flaherty & Collins, SC
(Wisconsin Business Law — Types of Business Insurance)

As businessmen and women, you make decisions every day that impact the staying power of your organizations. However, one decision-making area that probably falls completely outside your core business may be one of the most important in determining whether your business stays or goes — business insurance.

Business insurance is an essential part of any good business plan. Though it is one thing that can literally insure your future, 40 percent of small businesses go without it because they believe it’s too expensive. What they fail to realize is that the cost of not having insurance can far exceed annual premiums and could ultimately result in the closure of their business. Once they understand exactly what type of insurance they need and how much of it, many are surprised to see just how affordable it is.

As in any good business decision, the first rule is know thyself. Conduct a risk assessment to determine your specific needs. A risk assessment includes fives steps: (1) identifying hazards or risks inherent in your business; (2) assessing the likelihood, consequences and impact of the hazards or risks; (3) developing programs, procedures and systems to minimize or eliminate risks; (4) developing a plan to respond to, and minimize the impact of, hazards in case they do occur; and (5) insuring all risks.

The process can seem overwhelming, but a team of good advisors can make it much easier. Seek the advice of a good business attorney. A business attorney can ensure you have the right organizational structure to protect your personal assets and help perform the risk assessment. You should also consult a knowledgeable and trusted insurance agent and a financial consultant who specializes in businesses like yours. You can also find additional help and resources online.

Once you identify your needs and begin looking at types of business insurance, you’ll find it generally falls into eight categories:

• Property insurance to protect physical assets.
• Business interruption insurance to provide reimbursement for lost business revenues.
• Key employee insurance to cover losses stemming from loss of a key employee.
• Fidelity bonds to cover losses due to employee fraud, theft or, perhaps, error.
• Health insurance to provide as a benefit to employees.
• Life insurance to cover owners or key employees.
• Liability insurance to cover injuries, property damage, errors and other similar problems.
• Umbrella insurance.

Obviously, liability insurance is the most broad-ranging category of insurance, and you’ll have several choices to make here, too. General liability insurance, for example, covers bodily injury and property damage to third parties occurring within business operations. Product liability insurance, on the other hand, covers bodily injury and property damage resulting from the business’ products. Similarly, professional liability insurance provides the same coverage but for losses resulting from a business’ services. Errors and omissions insurance, workers compensation and business automobile liability are other types of liability insurance to consider. An umbrella liability insurance policy can provide additional liability coverage beyond the dollar limits of primary liability policies.

With a basic understanding of your business’ needs and the types of insurance available, all you need are the following tips to get the most out of your insurance investment.

First, many insurance companies want your business. Research to find the right coverage at the right price.

Second, know your policies’ exclusions. Policies generally exclude certain risks. Identify those exclusions and consider purchasing coverage "riders" or additional policies to cover them.

Third, the average small business needs $2 million to $3 million of liability coverage. Work with your team of advisors to determine the amount you need for yours.

Fourth, review your policies annually and pay attention to notices mailed by the insurance companies throughout the year. Frequently, those notices will contain coverage changes, and you’ll want to make insurance adjustments accordingly.

Fifth, evaluate new or newly risky business products and services and consider abandoning, modifying or acquiring additional insurance coverage for them.

Sixth, insurers may offer business owner’s policies (known as BOPs) that combine different types of coverage and offer them at lower rates for qualifying small businesses. A BOP may be a great way for you to save.

Finally, as you shop around, you may find you get the lowest bids for different coverages from different insurance companies. But you may also find advantages to working with one insurance provider, including multiple-policy discounts, elimination of expensive duplicate coverage, convenience and an agent who knows the details of the different policies and can spot gaps in coverage.

Determining your needs and shopping for business insurance can be time-consuming and the choices overwhelming. But the investment of your time (and money) now can make the difference in your business’ future — and whether it has one.

Reprinted with permission from the River Valley Business Report, Summer 2004.

by Terence R. Collins, Attorney, Johns, Flaherty & Collins, SC

If you have a mortgage on your home, your lender has probably required you to carry homeowner’s insurance. If you own your home outright, you’d be wise to follow lenders’ examples. For most people, their homes are the most valuable asset they will ever own; it just makes sense to protect it in case misfortune strikes.

Homeowner’s insurance is divided into two parts: casualty and liability. The casualty portion of your policy covers damage or destruction to your assets. It covers damages resulting from fires, wind and other weather elements, and a good policy will provide living expenses in the event you can’t live in your home.

The liability portion of your policy covers injuries that occur on your property. It’s especially valuable to homeowners because it imposes on the insurance company the duties to defend and indemnify you. That means that if someone sues you because he or she was injured on your property and wins, your insurance company must not only cover the costs to defend you, but it must also pay up to the limits of the liability.

Understanding the extent of your casualty and liability coverage and adjusting it to suit your needs is critical.

Casualty insurance, for example, typically does not cover floods, earthquakes and some other kinds of water damage, automobile-related matters and environmental issues. It also doesn’t cover theft or loss of jewelry, boats, antiques, high-tech equipment and other valuables without specific "riders," or add-in options.

Often the biggest regret policyholders have is that they didn’t purchase enough casualty coverage. Most policies will provide either for the fair market value of the structure and its contents or for the replacements costs. Homeowners need to regularly review this coverage, especially since their assets and the cost of materials fluctuate (and usually increase) often.

While an insurance company cannot promise to pay you more than replacement costs (which would make it a gambling contract), you do need to be sure your coverage reflects the current, actual replacement cost. Your insurance agent can view your home and assets and help you determine the appropriate level of coverage.

On the liability side, many policies provide $300,000 worth of coverage. That’s inadequate in today’s world. In fact, the average homeowner would likely fare best with something in the $1 million range.

That number may sound intimidating, but the additional coverage is surprisingly affordable. For example, someone paying $250 every six months for $300,000 in liability coverage may well be able to increase the coverage to $1 million for just $30 more. That’s because insurance companies make the bulk of their profits from the basic policies.

Liability insurance also has exclusions and particulars, so it’s worthwhile to know the specifics of your policy. One exclusion to note: liability insurance will not cover injuries resulting from an act committed by someone in your house if that person is not both a resident and a relative.

Additionally, most liability policies have a medical pay provision. This provision covers smaller medical bills unrelated to neglect or liability of the homeowner, such as someone who falls down the stairs. The medical pay provision will cover only the medical bills and no liability.

It’s important to note that claims will increase your premiums, so don’t make claims unless you must. If an insurance company pays a claim for you, they will adjust for it in the next premium.

Take that into consideration when determining your deductible. Obviously, the higher your deductible, the less expensive the premium, and vice versa. As a rule of thumb, a deductible of $500 makes good economic sense, but it’s best to look at your own circumstances and budget to determine what’s best for you.

Once you’ve settled on an insurance policy, it’s wise to take a video inventory of your home and its contents. It could serve as valuable evidence for future claims.

Most importantly, review your policy annually. It’s easy to forget about insurance until you really need it, and there’s no worse time to realize you don’t have enough.

by Brent P. Smith, Attorney, Johns, Flaherty & Collins, SC

If you've recently received a letter from your insurance agent about changes to your auto insurance, you're not alone. And if you have questions about the choices you now need to make, you're in good company.

The letters are coming from insurance agents anxious to help clients comply with a new Wisconsin auto insurance law. The law was passed as part of the state budget package last summer and placed the onus for compliance on insurance companies. The insurance companies now are sending the letters to explain certain coverages now required and additional coverages being offered that you may opt out of.

Here's what comes next:

Exactly what changes does the law require?

Wisconsin Act 28 of 2009, referred to as the "Truth in Auto Insurance Law," requires all drivers to carry:

• Uninsured motorist protection with minimum coverage of $100,000 per person and $300,000 per accident. Previously, minimum coverage of $25,000 per person and $50,000 per accident was required.
• Underinsured motorist protection with minimum coverage of $100,000 per person and $300,000 per accident. The insurance was optional before with minimum limits of $50,000 per person and $100,000 per accident.
• Minimum medical payment coverage of $10,000. The previous minimum limit was $1,000. This no-fault insurance pays medical bills and/or funeral costs if a covered driver is injured or killed while in an insured vehicle. Consumers have the option to decline this coverage.

The law also requires insurance companies offer optional umbrella coverage. Umbrella policies are those purchased in addition to basic policies to cover damage extending beyond the limits of your basic coverage. That means that if you have an umbrella policy and you are involved in an accident, the basic policy would pay first. If damages extend beyond the limits of your basic insurance, the umbrella policy then kicks in to cover the overage.

Historically, umbrella policies have been used to cover the purchaser's liability, and there has been some question about whether they apply in accidents involving uninsured or underinsured motorists. Under the new law, coverage for uninsured and underinsured drivers is automatically included in umbrella policies unless you specifically reject it.

The law took effect in November 2009 and requires the new minimums be incorporated to all renewals occurring from that time forward.

Effective Jan. 1, 2010, drivers are also required to increase liability coverage with minimum limits of $50,000 per person, $100,000 per accident and $15,000 for property damage. Previous minimum limits were $25,000, $50,000 and $10,000, respectively. Insurance industry sources estimate four of five insured drivers already carry these new minimum amounts.

What does the new law mean for uninsured drivers?

Effective June 1, 2010, auto insurance will be mandatory for all drivers. Wisconsin currently has a "financial responsibility law" that assesses penalties for uninsured motorists only after they cause an accident. Under the new law, however, a $500 fine may be assessed to anyone driving without insurance, regardless of whether they've been involved in any accidents. With the change, Wisconsin leaves New Hampshire as the only state in nation not requiring auto insurance.

How will this affect my premium?

Costs will vary, depending on your driving history, the ages and types of vehicles covered, the experience of drivers on your policy and your choices regarding coverage. The best way to find out how the changes will affect your premium is to talk to your agent.

I've never had auto insurance before. Will it be difficult to get?

The new law prohibits insurance companies from placing drivers in high-risk categories merely because they have not previously carried insurance. Other high-risk factors, however, such as speeding citations, may still be considered.

I have more questions. Where can I call?

Consumers may call the Wisconsin insurance commissioner's office at 1-800-236-8517, but your best bet is to start with your own agent. Your agent can tell you how the changes apply to your specific policy and premium and help you understand the pros and cons of declining optional coverage.

Reprinted with permission from La Crosse Tribune, January 24, 2010.

I was in a car accident and wasn't wearing my seatbelt. How will that affect my insurance claim?

Wisconsin law requires drivers and passengers to wear seatbelts. Not wearing a seatbelt can affect how much money you recover from an insurance company for damages and injuries sustained in an accident. Wisconsin's law requiring safety belt use allows a damage claim to be reduced by as much as 15 percent for parties not wearing safety belts, according to Michael Stoker, a Johns, Flaherty & Collins attorney.

Why allow this reduction? According to the National Safety Council, the cost of hospitalization is at least 50 percent higher for crash victims not wearing a seatbelt than those who are belted.

If a case involves significant injuries, either side may decide to hire an expert, a biomechanical engineer, to determine how significantly the failure to wear a seatbelt affected the injuries."

A biomechanical engineer takes all of the information from the accident and uses medical information and principles of physics to determine how the lack of a seatbelt enhanced the resulting injuries," Stoker said. "It's a complicated scientific process."

Other facts, including negligence, also can affect the size of the claim.

The bottom line, according to Stoker, is wear your seatbelt. "Seatbelts reduce injuries and save lives."

For more information on insurance law in Wisconsin, contact Michael Stoker or Brent Smith at 608-784-5678.