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The ReAR View MiRRoR

www.therearviewmirror.ca

NoVeMbeR 2011

Between the Lines


gleNN CAldwell
What would we do if we won a million dollars, Daddy? Hmmm. My daughter Karas question was an interesting one. That evening, we just finished watching Lottery, a new reality show on TV. In a way, it was kind of sad to see how most people respond to large sums of money. I explained that wed be able to pay off our mortgage, buy a few new cars, put some extra money away for their university education and take a few trips. Wed also be able to do those renovations we have been talking about, and perhaps put in an in-ground pool. Then I got thinkingit really wouldnt be long before that lifechanging money would be gone if we did all that. Sadly, its amazing how peoples lifestyles change after winning large sums of money and more sadly a year later when they are broke and have created even more debt than before. According to statistics on the show, over one third or more of lottery winners are broke within a year, and this increases as time goes on. One of the major challenges we see with some WSIB alternative programs is that many being offered to O/O fleets are short term in nature and offer a lump sum pay out for a catastrophic type injury. The idea is that if the O/O receives a large sum of money, usually $300,000 to $500,000 (like winning the lottery) that they should invest the proceeds in order to have enough ongoing monthly income to pay their bills until they reach retirement age. For whatever reason, these types of policies dont have requirements that the O/O needs to put this money away

WSIB alternatives for O/Os: what should you be looking for?


for the future. Even though an O/O may receive this lump thing to do for the O/O and his/her family. At least 60 days for strains/sprains (with no lifesum, there is nothing stopping them from blowing it all in a short period of time (see lottery statistic above). If the time maximum): A strain or sprain is the number one injury was work related (i.e. truck accident ) when they injury for this type of coverage, and more than half of run out of money, chances are theyd be heading back to these claims go beyond 30 days on average. $300,000 Accidental Death and their trucking company with their hand out looking for more because they can. Employee or Self Employed Dismemberment: We dont like to think about this, but if an O/O is killed, the famAs my last article has suggested, most RC4110(E) Rev. 10 fleets have allowed their O/Os to opt out of Indicators that the worker is ily will need to replace the O/Os income for years to come (so the more the better). WSIB, and purchase a private alternative in an employee: $300,000 Permanent and Total its place. Unfortunately, not all fleets have The worker is entitled to Disability (in addition to the Age 70 benedone everything they can to ensure the right coverage has been purchased, but more benefit plans which are nor- fit described above): This will help cover mally only offered to some of the extra expenses incurred if the importantly maintained. injury is catastrophic. When an O/O opts out of WSIB, it does employees. These include Accident Medical Benefits: give them the right to sue. Requiring an registered pension plans, O/O to carry a private alterative with not and group accident, health, physio, medical appliances, prescriptions eliminate a lawsuit, but the more compre- and dental insurance plans. drugs, etc. (the more the better). The program should also hensive the program and how a carrier (Source- CRA www.cra.on.ca) include benefits for rehabilitation, educaensures coverage is maintained certainly tion benefit and spousal retraining. reduces their risk and exposure. Ensure the policy you chose is a first payor When was the last time your reviewed your current situation? Times have changed and experience suggests, a policy, not directing claims to other insurance first. The other debate seems to come down to: what is good criteria from 10 years ago may not work well today. Canada is really becoming more like the States when it better coverage, individual or a group policy? Because of past challenges which have occurred in pertains to lawsuits. With more lawyers getting involved with personal injuries, its really imperative for a fleet to our industry, we now always recommend that the O/O only invest in individual coverage. Although there are revisit how they are doing things. Criteria for a group type programs available that may save a few dolComprehensive WSIB lars, a group policy is owned by the carrier and may be Solution one of those items that tip the scale if an O/Os independ Short term benefits: ent status is questioned. Look for something with a An individual policy is generally non-cancellable by long Own Occupation def- the insurer and is portable, meaning the O/O doesnt lose inition, preferably at least their coverage if they leave a certain carrier. Method of Payment: Is it better to let the O/O purfive years. Some programs provide benefits that are chase coverage on their own or provide deductions payable for five years, but through their operating statements? may only have a one- or Both ways are acceptable, but having a comprehentwo-year Own Occupation sive program through operating statement deduction not definition. On the surface, only reduces the carriers risk and liability, it will also these programs may seem to save tremendously on administration, if done the right be okay, but after the one- or way. If O/Os are purchasing coverage on their own, be two-year period is up, the sure to have them provide you with a copy of their policy O/O may be forced back to as well as a current certificate of insurance each month work if they can do any (or quarterly at the least). Recommendation: Providing a comprehensive indiother occupation, and benefits could cease. If the O/O is vidual program through operating statement deduction is still truly injured, they may really the true way to ensure coverage has not only been have the option of coming purchased, but more importantly, maintained. back to the fleet looking for Winning the lottery is something only a few will more. experience in a lifetime. That means if we want our com Long term benefits to panies to be successful, we are going to have work at it age 65 or 70: This is often a and make wise business decisions, including choosing the benefit that has been over- right broker. looked. Because of some of If you have O/Os and allow them to opt out of the issues above, more fleets WSIB, be sure to choose a broker that specializes in are now requiring their WSIB Alternative Programs and will be there for you at O/Os to invest in a program the time of a claim. Just because someone has a license to that includes not only short sell insurance and has access to a product doesnt make term benefits (with a PTD them an expert. Ask for references and check them. You benefit), but also a long term wouldnt hire an O/O without checking out their referdisability benefit that is ences thoroughly, would you? payable to age 70. This Glenn Caldwell is the Vice-President of Sales for NAL Insurance Inc. of London ON. For the last 24 years, Glenn has worked closely with many approach is a much better fleets across the country to ensure their Owner/Operators have the protecway of reducing risk and tion they need to keep rollin. You can reach him @ 1-800-265-1657 or exposure, plus, its the right gcaldwell@nalinsurance.com