Business Tax Deductions

As we enter mid-March, taxpayers begin to become very

interested in deductions. Following are a few that

you may be entitled to claim.

Deductible Expenses

· Office expenses

· Rent or lease payments

· Advertising

· Costs of goods sold

· Insurance costs

· Utilities

· Payments to independent contractors [file form 1099]

· Accounting fees

· Legal fees

· Communication expenses

· Credit Card Interest for business charges

· Travel expenses

· Vehicle expenses

· Business-related meals and entertainment

· Uncollected receivables

· Bank fees on business accounts

· Interest payments on notes

· Excise and fuel taxes

· Employment taxes

· Real estate tax paid on business property

· Special local assessments for repairs or maintenance to

business property

· Promotional costs that create goodwill such as sponsoring

a youth team

· Business association dues

· Business-related magazines

· Casualty losses

· Beverage services

· Credit bureau fees

· Taxi fares

· Telephone calls made on trips

· Self-employment tax [if applicable]

Sales Tax Deduction Option

The American Jobs Creation Act of 2004 provides all

taxpayers with the option to claim a deduction for state and

local sales taxes instead of state and local income taxes.

If you purchased a high cost item during 2004, you may find

that the total sales tax you pay far exceeds your state

income tax payment. If so, you should determine whether you

should claim a larger deduction by using the IRS Optional

State Sales Tax Tables found in IRS Publication 600.

The new sales tax deduction is a windfall for taxpayers in

Alaska, Florida, Nevada, Texas, Washington, South Dakota and

Wyoming. These states do not tax the income of their

residents, which makes the sales tax deduction a very

valuable deduction indeed! Regardless, taxpayers in all

states should the possibility of claiming a sales tax

deduction.

Source by Richard Chapo

Insurance Appraisal Clause – Resolving an Impasse in Your Claim

What if, after all you’ve done, you and your adjuster/insurance company are at an impasse on the value of your property? It’s now time to invoke the Appraisal Clause in your insurance policy. The Appraisal Clause is found in all insurance policies, and was designed to establish a procedure to allow disputed amounts to be resolved by disinterested parties. The appraisal clause can be found in every homeowners policy, in every policy covering commercial buildings, in all business policies, as well as in every renters policy…even automobile policies.

The Appraisal Clause is usually found in the policy under the Heading “Conditions” and/or “What to do after a loss.”

Don’t confuse the Appraisal process with Arbitration. The Appraisal Clause does not bind either party to its findings. In arbitration, the findings of the arbitrator are usually binding on both parties.

The Appraisal Clause is meant to be the method for determining disputed values. Appraisal cannot be used to determine what is covered. That is for a court of law to decide. If you have dispute with the company on whether or not something is covered, then you must file a lawsuit against your insurer to get that determination.

HERE’S A REALLY IMPORTANT TIP!!! You don’t have to wait until you’re hopelessly deadlocked with the adjuster or insurance company to invoke the Appraisal Clause. The Appraisal procedure has been invoked more often by insurers, who have greater understanding of the terms and conditions of their policies. But you, the insured or policyholder, can do it any time.

I’m not suggesting that you become uncooperative. But occasionally, I talk to people who are having real difficulties with their adjuster or insurance company. Taking the claim to Appraisal sometimes stops all the drama.

In my experience as both an appraiser and an umpire, I’ve found that disputes can be resolved more quickly by appraisal than the resolution you might get with litigation. The cost of the appraisal process is also significantly lower that the cost of litigation.

Here’s what the Appraisal Clause reads in my Homeowner Insurance policy:

“If you and we fail to agree on the amount of loss, either may

demand an appraisal of the loss. In this event, each party will choose

a competent appraiser within 20 days after receiving a written request

from the other. The two appraisers will choose an umpire. If they

cannot agree upon an umpire within 15 days, you or we may request

that the choice be made by a judge of a court of record in the state

where the “residence premises” is located. The appraisers will

separately set the amount of loss. If the appraisers submit an

agreement to us, the amount agreed upon will be the amount of loss.

If they fail to agree, they will submit their differences to the umpire.

A decision agreed to by any two will set the amount of loss.

Each party will:

a. pay its own appraiser, and

b. Bear the other expenses of the appraisal and umpire equally.”

Each party appoints an independent, disinterested appraiser. In past experience, I’ve seen the insured or policyholder try to appoint the Public Adjuster who is handling his claim as the appraiser. This should never be done, as that PA is not a disinterested party.

The appraisers evaluate the loss independently. The appraisers can still negotiate and reach an agreed amount of the damages. But, if they cannot agree, they work together to choose a mutually acceptable umpire. If the two appraisers cannot agree on the selection of an umpire, either side may appeal to the local court for the appointment of someone to serve in that capacity.

An umpire must also be a disinterested party, and must be impartial, of good moral character and possessing a good reputation. He also must be willing to listen. No umpire should be chosen that has any financial interest in the outcome of the appraisal. Any other consideration other than the hourly rate of compensation for the umpire is not acceptable.

Once the umpire has been chosen, the appraisers each present their loss assessment. Often, this involves informal testimony from the parties involved in the claim. To help the umpire gain a more complete understanding of the details of the loss, the appraisers and the umpire sometimes meet at the loss location and review the loss details. The umpire will subsequently provide a written decision to both parties. If any two parties agree to the amount of the loss, that amount becomes the claim amount. However, if one of the parties does not agree, then the case can still be turned over to legal counsel for litigation.

Question: May the insured or insurer reject the other parties’ choice of appraiser?

Answer: In 2005, the New York Department of Insurance issued a ruling on this question as follows:

“Whether an appraiser appointed by either of the parties is competent and disinterested (or “independent”) is a question of fact for a jury and is outside the determination of this Department.”

ANOTHER TIP!! Notice that there are very specific time limits in the Clause. You MAKE SURE that you choose your appraiser and notify the adjuster within the time limit in your policy. The time limit for both appraisers to choose an umpire begins on the day that both sides choose their appraiser.

Watch very carefully to see if the insurance company and/or adjuster chooses their appraiser within that time limit. If they do not, they have violated the terms and conditions of their policy. You can file a complaint with your state’s Department of Insurance for Unfair Claims Practice violations.

My recommendation, in the event of an appraisal, is to call a Claims Consultant. You might also consider contacting a public adjusting company in your area. The Claims Consultant or PA know insurance policies, know the Appraisal Clause, and know property values. The Claims Consultant or PA are the perfect choices for helping you prove the values of the property of your claim.

Source by Russell Longcore

Living Life Six Months at a Time

I recently found myself in the Carbone cancer center at the University of Wisconsin once again. It had been six months since I was last there. Six months since my last CT scan. Six months since I sat in the small examining room awaiting the arrival of my oncologist to review my scan with me and talk about where I’ve been and where I’m at and most importantly, where I am going. I was truly nervous. This is my first six-month review. Prior to this I was being seen every three months before that every month and prior to that every day.

Six months does not seem like a long time if it is put into the perspective of a normal lifetime. If you happen to be me, a current lung cancer survivor, six months represents the longest time you’ve gone without medical supervision for the past three years.

When I was first told that I did not have to return for six months, I was very excited. The things I could do in six uninterrupted months would be wonderful. I must tell you that the first three months were just that, I was at the peak of my limited energy. I was writing and speaking with potential sponsors and donors. I met with and spoke with company executives regarding cancer products and research. I spoke with cancer patients and gave support. For three months I was on top of my game. Then somewhere in that stretch it dawned on me that three months had passed and my internal cancer clock went off. I started thinking about things far too much. I started to question the six months I was given and began to worry about the additional three-month grace period.

As soon as concerns and doubts began to creep into my thoughts, my mood began to change, my productivity dropped and I started to withdraw from things, I was not a pleasant person to be around and I didn’t see it at all. My family did, what was invisible to me was crystal clear to them. Our non-profit organization (GFLCCO) also suffered as I withdrew from writing for a while and stopped aggressively trying to get our message out. For the next couple of months, I was a mess.

It was soon May and my pre-exam paranoia was at full height. My wife and son had sat down with me and pointed out my personality change and although I couldn’t understand it at first the more I thought about it the more I realized I had traveled this path before.

My wife and I soon found ourselves on a plane and in Chicago. A few days later I found myself sitting in the all too familiar waiting room at the UW and then waiting in the examining room once more.

I had written about similar things many months earlier and finally refined and published it as an article in December of last year. The article is entitled, “Living Life Three Months At A Time.” I re read it, which by the way if you haven’t read it I suggest you do because this is obviously the second in the series and I wouldn’t want you to fall behind the other people who have done their homework.

Although I went through treatment over three years ago, I still consider myself as a current small cell lung cancer survivor. I am ever mindful that cancer is a tricky thing and sometimes like a bad horror movie sequel, it comes back to stalk the survivor of the original film. I think that fact is still the haunting factor of the follow up visit whether it be three or six months. It’s the thought that someone is going to have to look you in the eyes and tell you that you are going to go through it all over again. That thought lurks in the back of my mind more then I care to admit. I feel good for the most part. I still can only walk so far, talk so long, and I still can lose my breath from something as simple as putting on a pair of socks. Walking up a flight of stairs can sometimes take my breath away faster then loves first kiss, but I certainly don’t feel like the cancer is flaring up. Of course, three years ago, the news that I had cancer to begin with floored me because what I thought was my yearly bout of bronchitis or possible pneumonia turned out to be lung cancer. After that shock, I came to the UW where they went in through my nose to take a sample from my lung and came back with the verdict of “small cell” lung cancer. I was pretty excited, I remember saying with complete sincerity, “Small cell, that’s good isn’t it?” “I mean it could be ‘ Large cell’ that would be bad, right?” The room went silent. The difference between large and small cell cancer was explained to me along with the knowledge that operating would not be an option.

I rarely replay the series of events that led to the discovery, diagnosis and treatment of “my” cancer.

My cancer.

As I looked around the waiting room I saw an older gentleman sitting alone and a memory of three years prior flooded in.

I was speaking with a gentleman I met in the same waiting room that I was currently seated in the spring of 2007, shortly after I began treatment. He was older then I but because we were going through something similar, we had common ground to have a comfortable conversation regarding cancer. He referred to his cancer as “my” cancer. I asked why he would make it that personal? His reply is timeless. He said, “Son, it don’t get more personal then cancer.” It was his second go round with cancer so he had wisdom to share, he told me,” You’re cancer is a new part of your life. You’ve got to get to know it, get personal with it, find it’s weakness, then fight it to the death.” I was brought back to the present as an elderly woman wearing a breathing apparatus made her way past where I was seated and gently nudged my chair as she passed.

I thought about these things I learned from my friend three years ago and many other things that I have learned along the way, and for the first time in a month began to feel at ease, I found peace of mind.

I watched the people come and go, studying their faces as they spoke to one another. I tried to read their eyes to look into their soles and offer some type of reassurance that I have no right to offer. I kept waiting for the little plastic messenger that the clinic uses which, by the way, is the same one that you would be handed while your waiting for your table at a restaurant. You know the one I mean, the round one that vibrates and then the little red lights light up. I remember thinking once that maybe when this thing lit up, someone would come out of the back with a pizza and I would pay him or her and go home. It never happened. So many people coming and going, so many lives altered by cancer.

I waited as long as I could, but I needed my blood work done before I went for my scan. So as much as I didn’t want too, I rose to my feet and walked into the lab to have blood drawn.

As much as I have already twisted and turned in this article, I must once again head into another direction for a moment, please bare with me.

I have both written and spoken about this before, including the “Three Months” article. More then almost anything else in the world, more then clowns, more then spiders. More then clowns posing as spiders or visa/versa. I hate the thought of someone trying to draw blood from me. Let me make sure you understand me here. I do not have a fear of needles. I do not have any reaction to seeing or the thought of blood. My cancer treatment consisted of radiation twice a day combined with three consecutive days of chemotherapy every three weeks and constant blood work. By the end, and to this day, I have very few options to offer as far as veins in my arms, which makes for an interesting and sometimes painful trip to the lab. I am what is referred to as a ‘hard stick’. All right, put all the schoolboy jokes aside because it’s not funny, and I will tell on you. The one saving grace is that the lab staff at the UW is top notch and even when my veins do not want to cooperate, they make it all bearable. Still the thought of blood being drawn keeps me up at night. What someone who has not been through something like this must be thinking. I mean it really is comical if you think about it. To go through all of this and the biggest concern is that someone is going to struggle a little putting a needle in your arm.

With the blood being drawn and on its way to be analyzed, it was time to move upstairs to the CT area.

The CT waiting room, not the main one you start out in with pizza messenger in hand waiting for the little red lights to signal your acceptance into the inner sanctum. The second one. It’s a small quaint waiting room that you wait in with others just before your scan. The nurse asks things about your allergies, if you’ve had another scan recently and if you have a port left in your arm from your earlier trip to the lab. This is the second hurdle I must clear to vanquish my anxiety. The nurse will test the port to make sure that it is suitable for the contrast that is injected into you during the scan. If the port is no good, then it must be removed and the vein hunt begins again. My port was good this time around, I’ve not always been this fortunate.

Anyway, the CT waiting room can be a social gathering as we share “why were here today stories” over cups of barium and outdated magazines. I always meet the most wonderful people and sometimes have heard the most heartbreaking stories in this tiny waiting room on the third floor. I have never shared any of these CT waiting room stories with anyone, I think it would be a violation of trust somehow. I will tell you that I have learned, drawn strength from and always taken away something from my years of visiting the third floor. The scan itself is a breeze.

Back we go to the second floor waiting room to see my oncologist, the man who along with the efforts of my radiologist and first and foremost my wife, are responsible for me still hanging around. We met as we always do, exchanged pleasantries, caught up with what we each had been doing over the past six months, a brief check of thing to make sure my basic parts were still functioning. Then the moment we have all been waiting for, the review of my scan.

There I am up on the screen, the Dr. points out where the 10cm tumor started in my right lung, how it had attached itself to my esophagus. He shows where it currently lies much smaller and lying inactive at the moment. The unknown being if it’s dead or simply sleeping as a small survivor in its own right. We look at the deterioration at the top of the lung then move to the left lung. He points out the line across the scan which signifies the place where a fine surgeon in Mauston, WI. removed a large portion of my ‘good’ lung and glued and stapled the remainder together after both lungs collapsed at the same time landing me in the hospital for a month in 2008. We talk about the fact that there has been no significant change in my condition for the past six months and he tells me that my next appointment will also be six months from now. Time freezes for a moment…..It restarts after I have reset my life clock for another six months. It starts after I do the math to see where that puts me in time. Another six months. Set and mark, and once again time begins to move forward with a fresh set of months in front of me like a fresh set of downs must look to the football quarterback of a struggling team. I thank him for all he’s done for my wife and I, we shake hands and Lindsy and I leave the small room and schedule our next appearance.

Just like that, it’s over. I’m on my own for another six months barring anything unforeseen. I feel great, once again revitalized by the gift of another six months. I want to write, to get back to seeking sponsors and rooting out donations for the GFLCCO. My time in the waiting rooms reminded me that there are many people out there who are at the beginning of treatments or are watching someone they love go through treatments and that they are the people that my wife and I set out to help when we formed our non-profit. So many people coming and going, so many lives altered by cancer.

I am once again an active participant in the world around me, I remember when I was going through treatment and I began thinking and looking at things differently then I once had. I remember again why I started viewing things in a new light. I am ready to once again continue traveling down my new path.

The transition from three-month visits to six-month visits had by far a greater effect on me then I anticipated. As things go, I spend my life now learning new things not only about myself but about the world around me. Hopefully I learned enough to deal a little better with the next six months and hopefully the six after that.

The lesson learned here is one that was simply forgotten. Life in itself is too easily taken for granite and one needs to be reminded of that fact from time to time or you can easily step off your path and get lost in the woods around you. Make the most of the life you have.

Never spend more time focusing on the inevitable destination then you do enjoying the journey.

I would hate to think that I or anyone else for that matter would fight that hard to live and be fortunate enough to survive only to spend their remaining time worrying about a reoccurence. Besides, this set of articles is a trilogy and I would be remiss if I left the earth prior to writing part three, “Living Life One Year At A Time.”

Until then, I’m still basically the same as every other person on the face of the planet, trying to stumble their way through life.

I just now do it six months at a time.

Source by Tim Giardina

Optimal Cost Structure and Effective Scale Economies

How do firms choose their cost structure? What is the nature and function of scales of operation? What are sources of functional and dysfunctional scales of operation? These policy questions relate to the optimal overhead of a business enterprise-the appropriate mix of expenditures that maximizes the return on investment and shareholders’ wealth while minimizing the cost of operations, simultaneously.

Clearly, effective economies of scale (MES-Minimum efficiency scale) are correlated with optimal cost structure and critical to sound business strategies designed to maximize the wealth producing capacity of the enterprise. In these series on effective expenditure management, we will focus on the pertinent strategic overhead questions and offer some operational guidance. The overriding purpose of this review is to highlight some basic cost theory, strategic expenditures relationships, and industry best practices. For specific financial management strategies please consult a competent professional.

As we have already established, the optimal cost structure and appropriate scale of operation for each firm differs markedly based on overall industry dynamic, market structure-degree of competition, height of entry/exit barriers, market contestability, stage of industry life cycle, and its market competitive position. Indeed, as with most market performance indicators, firm-specific cost structure position in insightful only in reference to the industry expected value (average) and generally accepted industry benchmarks and best practices.

One of the most important contributions of economic science to management science is the principle of optimality-derivative of Bellmann Equation-the dynamic programming method which breaks decision problem into smaller sub-problems and early applications in economics by Beckmann, Muth, Phelps and Merton, and the resultant Recursive model. In practice, any optimization problem has some objectives often referred to as the objective functions such as maximizing output, maximizing profit, maximizing utility, minimizing total cost, minimizing cycle time, minimizing distribution cost, minimizing transportation cost, etc.

Types of Cost Structure:

Cost Structures consist of a mix of fixed costs, variable costs and mixed costs. Fixed costs include costs that remain the same despite the volume of goods or services produced within current scale of production. Examples may include salaries, rents, and physical manufacturing facilities. A number of high capital-intensive businesses, such as airlines and manufacturing companies, are characterized by a high proportion of fixed costs which may constitute effective barriers to entry for new industry entrants. Please note that effective exit barriers are effective entry barriers. When firms cannot easily exit unprofitable markets due to high exit barriers, they should not enter such markets in the first place.

Variable costs vary proportionally with the volume of goods or services produced. Labor-intensive businesses focused on services such as banking and insurance are characterized by a high proportion of variable costs. In practice, variable costs frequently factor into profit projections and the calculation of break-even points for a business or project.

Mixed cost items have both fixed and variable components. For example, some management salaries typically do not vary with the number of units produced. However, if production falls dramatically or reaches zero, then attrition may result. This is evidence that all costs are variable in the long run.

Finally, a firm with a large number of variable expenses (compared to fixed expenses) may exhibit more consistent per-unit costs and hence more predictable per-unit profit margins than a company with fewer variable costs. However, a company with fewer variable costs (and hence a larger number of fixed costs) may magnify potential profits (and losses) because revenue increases (or decreases) are applied to a more constant cost level.

Most business enterprises define cost structure in terms of costs incurred in relation to a cost object or activity. And because some expenditures can be difficult to define, we often implement an activity-based project to more closely assign expenses to the cost structure of the cost activity or object in question and use activity-based accounting. Note that time required to complete any given activity is the critical factor in cost management. Therefore, to minimize the overhead of any activity or project it is critical to minimize the time required to complete the activity or project. The following are examples of key elements of the cost structures of various expenditure objects:

Product cost structure: Under this structure there are fixed costs which may include direct labor and manufacturing overhead; and Variable expenses which may include direct materials, production supplies, commissions, and piece rate wages. Service cost structure: Under this cost structure there are fixed expenses which may include administrative overhead; and Variables costs which may include staff wages, bonuses, payroll taxes, travel and entertainment.

Product line cost structure: Under this structure there are fixed costs which may include administrative overhead, manufacturing overhead, direct labor; and Variable costs which may include direct materials, commissions, production supplies; and Customer cost structure: Under this structure: Under this cost structure there are fixed costs there are administrative overhead for customer service, warranty claims; and Variable costs which may include costs of products and services sold to the customer, product returns, credits taken, early payment discounts.

The optimal Cost Structure is the combination of fixed and variable costs that minimizes the total operating overheads while maximizing net operating income simultaneously. The Cost Structure describes all costs-(fixed and variable) incurred to operate a business model. Further, Cost structure refers to the types and relative proportions of fixed and variable costs that a business enterprise incurs. In practice, the cost concept can be classified by region, product line, product item, customer group, department, or division, etc.

In cost-based pricing strategy, cost structure is used as a technique to determine effective prices, as well to identify areas in which expenses might potentially be reduced or at least subjected to better management control. Therefore, the cost structure concept is a useful management accounting tool that that has many financial accounting applications.

All business models have costs associated value creation- which occurs with the addition of actual or perceived value to a customer for a superior good or service; value delivery-creating and maintaining effective mutually beneficial and satisfying customer relationships; and value capture-which occurs through changes in the distribution of value in the good or service and production chain. The objective function is to minimize total operating expenditures. Such overheads can be calculated relatively easily after isolating cost drivers, key activities, key inputs; key resources, and strategic partnerships.

It is our experience that operating costs can be minimized in every business model. Additionally, low cost structures are more important to some business models than to others. Therefore it is useful to distinguish between two broad categories of business models: Cost-driven and Value-driven (many business models fall in between these two extreme categories).

The DuPont model demonstrates that Return on Investment is calculated as the product of Profit Margin (Net Income/Sales) and Turnover Rate (Sales/Total Assets). DuPont analysis indicates that ROE is affected by three factors- Operating efficiency, which is measured by Profit Margin; Asset Use Efficiency, which is measured by Total Asset Turnover; and Financial Leverage, which is measured by the Equity Multiplier: ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity).

Types of Business Models:

Cost-driven business model-Most Cost-driven business models focus on minimizing overheads wherever possible. This approach aims at standardization and least cost method by creating and sustaining the leanest possible Cost Structure, using low and dynamic price value propositions, maximum automation, and strategic outsourcing.

Value-driven business model– Under this business model most companies are often less concerned with the cost implications of a particular business model design, and instead their main focus is on value creation. Premium value propositions, customization and a high degree of personalized service often characterize value-driven business models.

Some Operational Guidance:

In practice, firms seeking to optimize cost management must optimize time management. One of the most significant revelations of Activity Based Accounting is the impact of time and activity in firms’ overall operating cost: Cost structure is activity driven and activity is time driven. Therefore, time is the most critical factor is effective cost management. Simply put, firms must reduce time required to execute specific activity to reduce cost associated with the specific activity, ceteris paribus.

Additionally, firms seeking to leverage and optimize scale economies must optimize cost savings derivative of specific scale of operation. Please note that scales of operation may be functional and log-run-cost reducing derivative of experience curve; learning effects; scope economies; division of labor; specialization; horizontal as well as vertical differentiation or dysfunctional and long-run-cost increasing derivative of reactive and entrenched management with musty and personality-driven vision; organizational inertia; adaptive and abusive supervision; increasing bureaucratic cost; lack of innovation; increasing internal and external transaction costs.

In sum, firms optimize cost structure through effective time management and optimizing scales of operation. Therefore, firms seeking to maximize the profit producing capacity of the enterprise must formulate and execute dominant efficient and effective cost management strategies based on appropriate combination of costs that maximizes the return on investment and shareholders’ wealth while minimizing the cost of operations, simultaneously. As we have already established, there is growing empirical evidence suggesting firms that opt for scale and volume tends to outperform those that opt for premium, ceteris paribus.

Source by James Gaius Ibe

Perks of Consulting With a Claims Adviser

When it comes to insurance claims, the process is often a lot more complicated and stressful than people would imagine. Whether we are talking about a business insurance claim, or a personal claim, insurance policies are by nature complex and without expert knowledge policies are often misunderstood, or clauses misinterpreted, resulting in a pay-out amount that is lower than what is fair. The best way for individuals to ensure they are protected during this process is by speaking with a claims adviser.

With regards to TPD insurance claims or trauma insurance claims, it is even more important to speak with an adviser. A total or partial disability insurance policy means that you are going to get paid a significant amount of money if you become totally and permanently disabled. However, the issue that many policyholders will face is that these policies are a maze of clauses and specifications, which leaves you totally dependent on the insurance company to properly figure the payment(s) that you are entitled to receive. An insurance claims adviser knows the ins and outs of policies and they work for you, not the insurance company.

But what is a claims adviser going to do with respect to your TPD insurance claims? A lot of people ask this question, and the answer is that an insurance specialist is going to assess your TPD or trauma insurance claims, as well as identify how to approach the matter with your provider. They will assess your circumstances and let you know whether you may be eligible for a claim, and how you can best proceed to get the money that you feel you are owed. Dealing with a claims adviser removes a lot of stress from your shoulders.

Another reason why you will want to deal with a top claims adviser is because they typically have relationships with the insurance companies. Communicating with insurance companies might be difficult given the industry-specific language you’d need to know. But when you have a claims adviser working for you, they know the business and can talk directly with the insurance company on your behalf.

If they already have a relationship with that company, it stands to reason they can efficiently get through all the bureaucracy and paperwork that is synonymous with these organizations. They may get you a result that is very palatable given your condition. And in most cases, they will get you a claims result that might not have been possible without their support. Many people think it makes no sense to pay someone to get money from an insurance company but, in some cases, you are going to need to pay a little bit to a claims adviser so you can realize the full amount that is due to you.

Source by Edmund Brunetti

Asbestos in Gas Masks

We all know the benefits that a prop may bring to a teacher in a history lesson to aid students with the learning process as they get to physically see and feel the item themselves to get a better understanding of what the teacher is explaining. But when the subject is WWII this could be a potentially hazardous subject to both students and teachers, especially if the item of that period is a WWII Mask.

Why would a WWII Gas Mask be dangerous?

WWII gas masks are potentially dangerous as they can contain and release asbestos fibres. They can also be contaminated with harmful chemicals from previous use in gas drills. In addition some post war gas masks can release asbestos fibres and can be contaminated.

Tests have shown that asbestos fibres can be inhaled by wearing the masks. Asbestos fibres can also be released from handling the masks, filters or carrying bag.

So why use asbestos in gas masks?

After the widespread use of poison gas in the Great War it was expected that gas would also be a major factor in WWII so civilians as well as military personnel were provided with gas masks.

How many gas masks were produced and what types of asbestos were used?

It is difficult to put an exact number on how many of these asbestos containing gas masks were manufactured but to put it in perspective one company in Blackburn, Lancashire had a contract from the government in 1936 to make 70 million and production continued throughout the war.

There were two main types of asbestos used during the manufacture of these gas masks: Chrysotile (white asbestos) for civilian respirators and Crocidolite (blue asbestos) for those equipping the armed forces. The health risks associated with these masks only came to light post-war when factory workers making the masks started showing abnormally high numbers of deaths from cancer.

Why is asbestos dangerous?

The Health & Safety Executive website warns: “Breathing in air containing asbestos fibres can lead to asbestos-related diseases, mainly cancers of the lungs and chest lining. Asbestos is only a risk to health if asbestos fibres are released into the air and breathed in. Past exposure to asbestos currently kills around 4,000 people a year in Great Britain. This number is expected to go on rising at least until 2016.

There is no cure for asbestos-related diseases. There is usually a long delay between first exposure to asbestos and the onset of disease. This can vary from 15 to 60 years.”

What should a school or a collector do if they own one of these Asbestos containing Gas Masks?

The local authority should be contacted for advice on how to safely dispose of the masks, filters and the canvas bags. In 2004 the Imperial War Museum had issued the following guidance to their staff:

“Most British gas masks of WW2 vintage have asbestos (blue and/or white) as a component in their filters… Where unsure, it should be assumed that the filters do contain asbestos until proven otherwise. The filters may, in any case, contain other respiratory irritants. Thus no gas mask of WW2 vintage should ever be worn.

Note:

There is a further health and safety issue with gas masks that have been exposed to chemicals eg used in ‘live’ gas tests and drills. Such gas masks should not be handled and should not go on display. They should be sealed in polyethylene bags (at least two layers) or an airtight inert container. This should be carried out in a fume cupboard, whilst wearing latex or nitrile gloves and a lab coat. The gloves should be disposed of and the lab coat disposed of/laundered after use. The enclosures should be labelled to indicate that they contain materials that are potentially hazardous and should not be opened. Any further enclosures that they are placed into, eg boxes, should be appropriate labelled as described above.

Source by Jag S Sahajpal

Surety Bonds – What Contractors Need To Know

 Introduction

Surety Bonds have been around in one form or another for millennia. Some may view bonds as an unnecessary business expense that materially cuts into profits. Other firms view bonds as a passport of sorts that allows only qualified firms access to bid on projects they can complete. Construction firms seeking significant public or private projects understand the fundamental necessity of bonds. This article, provides insights to the some of the basics of suretyship, a deeper look into how surety companies evaluate bonding candidates, bond costs, warning signs, defaults, federal regulations, and state statutes affecting bond requirements for small projects, and the critical relationship dynamics between a principal and the surety underwriter.

What is Suretyship?

The short answer is Suretyship is a form of credit wrapped in a financial guarantee. It is not insurance in the traditional sense, hence the name Surety Bond. The purpose of the Surety Bond is to ensure that the Principal will perform its obligations to theObligee, and in the event the Principal fails to perform its obligations the Surety steps into the shoes of the Principal and provides the financial indemnification to allow the performance of the obligation to be completed.

There are three parties to a Surety Bond,

Principal – The party that undertakes the obligation under the bond (Eg. General Contractor)

Obligee – The party receiving the benefit of the Surety Bond (Eg. The Project Owner)

Surety – The party that issues the Surety Bond guaranteeing the obligation covered under the bond will be performed. (Eg. The underwriting insurance company)

How Do Surety Bonds Differ from Insurance?

Perhaps the most distinguishing characteristic between traditional insurance and suretyship is the Principal’s guarantee to the Surety. Under a traditional insurance policy, the policyholder pays a premium and receives the benefit of indemnification for any claims covered by the insurance policy, subject to its terms and policy limits. Except for circumstances that may involve advancement of policy funds for claims that were later deemed to not be covered, there is no recourse from the insurer to recoup its paid loss from the policyholder. That exemplifies a true risk transfer mechanism.

Loss estimation is another major distinction. Under traditional forms of insurance, complex mathematical calculations are performed by actuaries to determine projected losses on a given type of insurance being underwritten by an insurer. Insurance companies calculate the probability of risk and loss payments across each class of business. They utilize their loss estimates to determine appropriate premium rates to charge for each class of business they underwrite in order to ensure there will be sufficient premium to cover the losses, pay for the insurer’s expenses and also yield a reasonable profit.

As strange as this will sound to non-insurance professionals, Surety companies underwrite risk expecting zero losses. The obvious question then is: Why am I paying a premium to the Surety? The answer is: The premiums are in actuality fees charged for the ability to obtain the Surety’s financial guarantee, as required by the Obligee, to ensure the project will be completed if the Principal fails to meet its obligations. The Surety assumes the risk of recouping any payments it makes to theObligee from the Principal’s obligation to indemnify the Surety.

Under a Surety Bond, the Principal, such as a General Contractor, provides an indemnification agreement to the Surety (insurer) that guarantees repayment to the Surety in the event the Surety must pay under the Surety Bond. Because the Principal is always primarily liable under a Surety Bond, this arrangement does not provide true financial risk transfer protection for the Principal even though they are the party paying the bond premium to the Surety. Because the Principalindemnifies the Surety, the payments made by the Surety are in actually only an extension of credit that is required to be repaid by the Principal. Therefore, the Principal has a vested economic interest in how a claim is resolved.

Another distinction is the actual form of the Surety Bond. Traditional insurance contracts are created by the insurance company, and with some exceptions for modifying policy endorsements, insurance policies are generally non-negotiable. Insurance policies are considered “contracts of adhesion” and because their terms are essentially non-negotiable, any reasonable ambiguity is typically construed against the insurer. Surety Bonds, on the other hand, contain terms required by the Obligee, and can be subject to some negotiation between the three parties.

Personal Indemnification & Collateral

As discussed earlier, a fundamental component of surety is the indemnification running from the Principal for the benefit of the Surety. This requirement is also known as personal guarantee. It is required from privately held company principals and their spouses because of the typical joint ownership of their personal assets. The Principal’s personal assets are often required by the Surety to be pledged as collateral in the event a Surety is unable to obtain voluntary repayment of loss caused by the Principal’s failure to meet their contractual obligations. This personal guarantee and collateralization, albeit potentially stressful, creates a compelling incentive for the Principal to complete their obligations under the bond.

Types of Surety Bonds

Surety bonds come in several variations. For the purposes of this discussion we will concentrate upon the three types of bonds most commonly associated with the construction industry: Bid Bonds, Performance Bonds and Payment Bonds.

The “penal sum” is the maximum limit of the Surety’s economic exposure to the bond, and in the case of a Performance Bond, it typically equals the contract amount. The penal sum may increase as the face amount of the construction contract increases. The penal sum of the Bid Bond is a percentage of the contract bid amount. The penal sum of the Payment Bond is reflective of the costs associated with supplies and amounts expected to be paid to sub-contractors.

Bid Bonds – Provide assurance to the project owner that the contractor has submitted the bid in good faith, with the intent to perform the contract at the bid price bid, and has the ability to obtain required Performance Bonds. It provides economic downside assurance to the project owner (Obligee) in the event a contractor is awarded a project and refuses to proceed, the project owner would be forced to accept the next highest bid. The defaulting contractor would forfeit up to their maximum bid bond amount (a percentage of the bid amount) to cover the cost difference to the project owner.

Performance Bonds – Provide economic protection from the Surety to the Obligee (project owner)in the event the Principal (contractor) is unable or otherwise fails to perform their obligations under the contract.

Payment Bonds – Avoids the potential for project delays and mechanics’ liens by providing the Obligee with assurance that material suppliers and sub-contractors will be paid by the Surety in the event the Principal defaults on his payment obligations to those third parties.

How Are Surety Bonds Underwritten?

Surety underwriters have a complex and continuing responsibility of assessing Principals seeking a bond. Companies that rely upon bonding to win projects fully understand the importance of establishing a maintaining a strong relationship with their Surety companies. Surety underwriters are required to place the Principal through a rigorous underwriting process prior to issuing a bond, and will continue to monitor the progress of the Principal’s projects in order to identify any warning signs of potential default. The information required from firms seeking a surety bond is perhaps the most detailed of any “insurance” application process. Companies that will require bonds are well advised to maintain a current portfolio of the required documents in order to facilitate and expedite the underwriting process.

The underwriting Questionnaire or application form the Principal completes is supplemented by the following information required by underwriters:

Financial Capacity:

  • Most recent annual audited financial statement,
  • Year-to date unaudited financial statement, including cash flow,
  • Last three years’ audited financial statements,
  • List of bank credit lines and other forms of credit relationships,
  • Bank or lender’s letter of reference,
  • An inventory of all work-in progress,
  • Accounting and cost controls,
  • Personal (unaudited) current financial statements of the individual Principals

Performance Capabilities:

  • Proposed Project information, plans, etc..

  • Summary of all prior experience with similar projects,

  • Labor required for the project, quality of sub-contractors,

  • Equipment required for the project,

  • Project Management Plan,

  • Summary of all past and pending bonded and non-bonded projects,

  • Summary of potential future projects,

  • Continuity Plan,

  • Resume of individual Principals

Reputation & Relationships:

  • Lending institutions,

  • Project Owners,

  • Suppliers,

  • Sub-contractors

Cost of Surety Bonds

Every Surety company’s rates differ, however there are general rules of thumb:

Bid Bonds are typically provided at either a nominal cost or on a complementary basis as the Surety is seeking to underwrite the Performance Bond should the contractor be awarded the project.

Performance Bond premium or fees can range anywhere from 0.5% of the contract’s final amount to 2.0% or greater. The two main factors affecting pricing are the amount of the bond as higher amounts usually have lower rates, and the quality of the risk. For example, a performance bond in the amount of $250,000 might carry a 2.5% rate translating to a fee of $ 6,250 versus a $30 million bond at a rate of 0.75% which would cost $225,000.

Even experienced contractors sometimes operate under the misconception that bond costs are fixed at the time of their issuance. In fact, a bond premium or fee will often adjust with the final value of the contract. The final value is typically, but not exclusively, greater than the initial contract amount as a result of work change orders during the construction process. It is important for contractors to realize the potential for a negative surprise represented as an increased cost of their bonds. This realization should initially occur during the bid preparation process, and whenever possible, during the contract negotiation process contractors should explore the feasibility of addressing any incremental increase in bond cost that will result from increased contract values due to change orders effectuated by the project owner.

Warning Signs

A Surety’s main purpose is to screen out those contractors that may be well-intentioned, but simply not completely qualified in all aspects of their business to take on certain projects. Surety underwriters are always on the lookout for warning signs both prior to issuing the bond and after its issuance.

Factors That Concern Bond Underwriters include:

  • Poor project management and accounting systems

  • Excessively rapid expansion

  • Key Management changes

  • Material change in historical business focus

  • Quality issues with sub-contractors

  • Shortage of labor and/or supplies

  • Cost overruns

  • Failure to require sub-contractors to secure their own surety bonds

  • Unreasonable project contract terms

  • Catastrophic weather related delays

  • Adverse macro-economic conditions

     

What Happens in the Event of a Contractor’s Default?

Upon notification, and if after conducting a thorough investigation, and the Surety determines the Principal has defaulted, it may:

  • Provide the defaulting contractor with additional resources or economic assistance to complete the project, or,

  • Select a replacement contractor to complete the project, or,

  • Arrange for a re-bidding process to complete the project,

  • Pay the Obligee (project owner) the “penal sum” of the Performance Bond

The Surety is required by law to conduct a diligent investigation of a potential default so as not to prematurely or improperly declare a contractor in default. Once the Surety has paid a loss under the bond, they will seek reimbursement from the Principal including exercising the Surety’s rights over letters of credit, escrows, or personal assets that have collateralized the bond.

 

Regulations & Statutes

The Miller Act

The Miller Act enacted by Congress in 1935, replaced the Heard Act of 1894, and applies to federal government construction projects with a contract amount in excess of $100,000. This law provides the exclusive remedy for labor and materials providers who have not received payment in full within ninety days from the date of the aggrieved sub-contractor or supplier’s last service. The Payment Bond covers first tier sub-contractors and suppliers and second-tier contractors. First tier sub-contractors may bring claims in the form of litigation directly under the Payment Bond, while second tier subcontractors must formally notify the prime contractor of their intent to bring a claim within ninety days of their last unpaid service or supply of materials.

A claim for any unpaid balance is achieved by filing a lawsuit, between ninety days and one year from the date of the last service was provided. The lawsuit must be brought in the name of the United States for the benefit of the party bringing the action. The suit is filed in federal court in the jurisdiction where the contract was performed.

Construction Industry Payment Protection Act of 1999

This federal law became effective August 1999, amending the Miller Act in several ways, including substituting the following provision for the mathematical formula that originally capped the maximum bond amount to $2.5 million notwithstanding the size of the project:

The amount of the payment bond shall be equal to the total amount payable by the terms of the contract unless the contracting officer awarding the contract makes a written determination supported by specific findings that a payment bond in that amount is impractical, in which case the amount of the payment bond shall be set by the contracting officer. In no case shall the amount of the payment bond be less than the amount of the performance bond.

The Federal Acquisition Regulation (“FAR”)

Found at Title 48 of the U.S. Code of Federal Regulations, FAR regulates the federal government’s processes for procurement of goods and services. Part 28 of the FAR entitled Bonds and Insurance sets forth the related specifications. Below are some relevant excerpts of Section 28 of the FAR that detail the requirements for construction contract payment protections:

Performance and payment bonds and alternative payment protections for construction contracts. 28.102-1 General

(a) The Miller Act requires performance and payment bonds for any construction contract exceeding $100,000, except that this requirement may be waived-

(1) By the contracting officer for as much of the work as is to be performed in a foreign country upon finding that it is impracticable for the contractor to furnish such bond; or

(2) As otherwise authorized by the Miller Act or other law.

(b)(1) Pursuant to U.S.C. 3132, for construction contracts greater than $30,000, but not greater than $100,000, the contracting officer shall select two or more of the following payment protections, giving particular consideration to inclusion of an irrevocable letter of credit as one of the selected alternatives:

(i) A payment bond.

(ii) An irrevocable letter of credit (ILC).

(iii) A tripartite escrow agreement. The prime contractor establishes an escrow account in a federally insured financial institution and enters into a tripartite escrow agreement with the financial institution, as escrow agent, and all of the suppliers of labor and material. The escrow agreement shall establish the terms of payment under the contract and of resolution of disputes among the parties. The Government makes payments to the contractor’s escrow account, and the escrow agent distributes the payments in accordance with the agreement, or triggers the disputes resolution procedures if required.

(iv) Certificates of deposit. The contractor deposits certificates of deposit from a federally insured financial institution with the contracting officer, in an acceptable form, executable by the contracting officer.

(v) A deposit of the types of security listed in 28.204-1 and 28.204-2.

(2) The contractor shall submit to the Government one of the payment protections selected by the contracting officer.

(c) The contractor shall furnish all bonds or alternative payment protection, including any necessary reinsurance agreements, before receiving a notice to proceed with the work or being allowed to start work.

28.102-2 Amount required.

(a) Definition. As used in this subsection-

“Original contract price” means the award price of the contract; or, for requirements contracts, the price payable for the estimated total quantity; or, for indefinite-quantity contracts, the price payable for the specified minimum quantity. Original contract price does not include the price of any options, except those options exercised at the time of contract award.

(b) Contracts exceeding $100,000 (Miller Act)-

(1) Performance bonds. Unless the contracting officer determines that a lesser amount is adequate for the protection of the Government, the penal amount of performance bonds must equal-

(i) 100 percent of the original contract price; and

(ii) If the contract price increases, an additional amount equal to 100 percent of the increase.

(2) Payment bonds.

(i) Unless the contracting officer makes a written determination supported by specific findings that a payment bond in this amount is impractical, the amount of the payment bond must equal-

(A) 100 percent of the original contract price; and

(B) If the contract price increases, an additional amount equal to 100 percent of the increase.

(ii) The amount of the payment bond must be no less than the amount of the performance bond.

(c) Contracts exceeding $30,000 but not exceeding $100,000. Unless the contracting officer determines that a lesser amount is adequate for the protection of the Government, the penal amount of the payment bond or the amount of alternative payment protection must equal-

(1) 100 percent of the original contract price; and

(2) If the contract price increases, an additional amount equal to 100 percent of the increase.

(d) Securing additional payment protection. If the contract price increases, the Government must secure any needed additional protection by directing the contractor to-

(1) Increase the penal sum of the existing bond;

(2) Obtain an additional bond; or

(3) Furnish additional alternative payment protection.

(e) Reducing amounts. The contracting officer may reduce the amount of security to support a bond, subject to the conditions of 28.203-5(c) or 28.204(b).

In 2004, Congress enacted a provision requiring inflation-based readjustment of the acquisition related threshold requirements every five years. The last adjustment was in 2007, which increased the minimum bond requirement threshold for federal projects from $25,000 to $30,000.

“Little Miller Acts”

Every state, the District of Columbia and Puerto Rico passed statutes governing surety Performance and Payment Bond requirements for state government construction projects. These statutes contain provisions specifying the threshold contract amount under which Surety Bonds are not required. Below we provide relevant excerpts of the Little Miller Acts enacted in New York, New Jersey and Connecticut.

New York Little Miller Act:

New York Consolidated Laws, State Finance Law, Article 9, Contracts, Section 137 states in part:

Provided, however, that all performance bonds and payment bonds may, at the discretion of the head of the state agency, public benefit corporation or commission, or his or her designee, be dispensed with for the completion of a work specified in a contract for the prosecution of a public improvement for the state of New York for which bids are solicited where the aggregate amount of the contract is under one hundred thousand dollars and provided further, that in a case where the contract is not subject to the multiple contract award requirements of section one hundred thirty-five of this article, such requirements may be dispensed with where the head of the state agency, public benefit corporation or commission finds it to be in the public interest and where the aggregate amount of the contract awarded or to be awarded is less than two hundred thousand dollars.

New Jersey Little Miller Act:

New Jersey Revised Statutes, Title 2A, Administration of Civil and Criminal Justice, Chapter 44, Sections 2A:44-143 through2A:44-148 states in part:

(2) When such contract is to be performed at the expense of the State and is entered into by the Director of the Division of Building and Construction or State departments designated by the Director of the Division of Building and Construction, the director or the State departments may: (a) establish for that contract the amount of the bond at any percentage, not exceeding 100%, of the amount bid, based upon the director’s or department’s assessment of the risk presented to the State by the type of contract, and other relevant factors, and (b) waive the bond requirement of this section entirely if the contract is for a sum not exceeding $200,000. (3) When such a contract is to be performed at the expense of a contracting unit or school district, the board, officer or agent contracting on behalf of the contracting unit or school district may: (a) establish for that contract the amount of the bond at any percentage, not exceeding 100%, of the amount bid, based upon the board’s, officer’s or agent’s assessment of the risk presented to the contracting unit or school district by the type of contract and other relevant factors, and (b) waive the bond requirement of this section entirely if the contract is for a sum not exceeding $100,000.

Connecticut Little Miller Act:

Connecticut General Statutes, Title 49, Mortgages and Liens, Chapter 847, Liens, Sections 49-41 through 49-43 staes in part:

Sec. 49-41. Public buildings and public works. Bonds for protection of employees and materialmen. Performance bonds. Limits on use of owner-controlled insurance programs. (a) Each contract exceeding one hundred thousand dollars in amount for the construction, alteration or repair of any public building or public work of the state or a municipality shall include a provision that the person to perform the contract shall furnish to the state or municipality on or before the award date, a bond in the amount of the contract which shall be binding upon the award of the contract to that person, with a surety or sureties satisfactory to the officer awarding the contract, for the protection of persons supplying labor or materials in the prosecution of the work provided for in the contract for the use of each such person, provided no such bond shall be required to be furnished (1) in relation to any general bid in which the total estimated cost of labor and materials under the contract with respect to which such general bid is submitted is less than fifty thousand dollars, (2) in relation to any sub-bid in which the total estimated cost of labor and materials under the contract with respect to which such sub-bid is submitted is less than fifty thousand dollars, or (3) in relation to any general bid or sub-bid submitted by a consultant, as defined in section 4b-55. Any such bond furnished shall have as principal the name of the person awarded the contract.

(b) Nothing in this section or sections 49-41a to 49-43, inclusive, shall be construed to limit the authority of any contracting officer to require a performance bond or other security in addition to the bond referred to in subsection (a) of this section, except that no such officer shall require a performance bond in relation to any general bid in which the total estimated cost of labor and materials under the contract with respect to which such general bid is submitted is less than twenty-five thousand dollars or in relation to any sub-bid in which the total estimated cost of labor and materials under the contract with respect to which such sub-bid is submitted is less than fifty thousand dollars.

The Critical Importance of a Strong Principal – Surety Relationship

A surety underwriter is responsible for evaluating the Principal’s overall capability to profitably complete a project based upon: their financial condition, their historical performance, their current workload-in progress, their ability to manage, and their reputation with other stakeholders.

Differences of opinion arise periodically between the Principal and the Surety over its willingness to provide bonding capacity. Principals view this as an indirect undermining of their ability to conduct business. Underwriters view their decision as being in the interest of the Principal because by withholding the bonding capacity, an underwriter may be preventing a Principal from jeopardizing their personal assets. When these situations arise, the insurance broker should be particularly attentive to the underwriter’s concerns, and work with the Principal to provide any additional information that may alleviate or ameliorate the underwriter’s concerns.

Building a sound surety relationship requires continuing diligence, candor, and active dialogue between the Principal and Surety. Perhaps the best way to build the trust that is so important to the relationship is through providing agreed upon scheduled job status reports of work-in-progress, including the profit and loss statements of each bonded (and non-bonded) project, the owner’s payment activity, unapproved change orders, and the firm’s periodic financial statements. A proactive insurance broker will arrange an annual in-person meeting upon completion of the audited financials. The participants would includes the Principal, Surety, the Principal’s CFO and possibly the external auditor. This meeting affords an opportunity to further build upon the “paper relationship” and is a venue for candidly discussing potential issues and future prospects.

Although it may seem counterintuitive, Principals that apprise a Surety of potential issues also create a high level of trust. Proactively providing required information sends a strong signal to the Surety about the Principal’s business character and management, also providing the Surety with the firm’s business plans for the upcoming twelve to twenty-four month period will serve to gain the underwriter’s trust and flexibility when those situations arise that may require the underwriter to demonstrate some additional flexibility in order for the Principal to realize their business objectives. Surety companies can provide valuable resources to Principals to assist them in overcoming temporary business challenges before a default occurs. These resources include: construction attorneys, engineers and accountants.

The U.S. Department of the Treasury publishes a list of approved sureties. The Treasury List is located at: http://www.fms.treas.gov/c570/c570.html.

Highly effective construction companies have mastered the art and science of managing successful surety relationships. Engaging an experienced insurance professional who can work effectively with both internal and external financial and operational personnel to manage the process of securing bonds in a timely manner is a critical component to maintain access to stable surety lines.

Source by James Ilardi

Tactics Used by Disability Insurance Companies Against Claimants to Deny Claims

To protect their businesses and their shareholders, disability insurance companies have made it hard for the average person to file a claim and obtain the benefits that they signed up to receive. When a person successful files for benefits on a disability insurance policy, it is long-term and very expensive to the companies.

Because of the laws governing disability insurance policies were written, there are no penalties in place when companies deny or delay claims. If you have to fight for your disability benefits and it takes a year, during which time you lose your home and life savings, there is no punishment or penalty to the disability insurance company. If you win in a court case, you will receive what they were supposed to pay you in the first place. The only thing that the insurance company loses is the time of their in-house law firm, while people who are sick or injured can lose much more. That is why it is important to know as much as possible about disability insurance, the process of filing a claim and the process of fighting for a claim to protect yourself.

Insurance companies employ many medical professionals to investigate claims. They have staffs of nurses and doctors who do nothing but read medical records and review diagnostic tests all day long to build cases against claimants. There are many instances that we have seen where the medical reviewer only sees a small part of the person’s medical file – important documents that clearly verify a serious illness are left out. Is this deliberate or just poor record management? It is hard to know – but the bottom line is that disability insurance claimants have to fight to make sure that their complete medical records have been examined.

Insurance companies often use in-house medical staffers to contact treating physicians, review claims and write letters that are not accurate to help build cases against claimants. A typical scenario: the medical staffer calls the doctor’s office, speaks about the claimant, and then the insurance company staffer sends a letter to the doctor’s office confirming the conversation. The problem is, the letter is not entirely accurate and does not reflect the conversation that took place. Some facts are twisted, others are left out entirely. The critical part is this: the letter will contain a statement that says “unless we hear back from you by (a certain date), you accept the statements in the letter as fact.”

Doctors, office managers and their own staffers are busy, and responding to this letter is not their top priority. When no one responds, or when the response comes after the date, the insurance company uses that as an agreement with the contents of the letter, even if the letter is totally inaccurate and contradicts every piece of information in the patient’s medical record.

Today it is inexpensive for insurance companies to use video surveillance to monitor claimant activities. If you have filed a claim and a van or truck shows up on your block that does not seem to have any identifying marks or workers taking out equipment or making a delivery, it is entirely possible that surveillance is taking place. If you have a disability like fibromyalgia, where some days you cannot get out of bed and other days you feel almost normal, the videotape surveillance will only show you on a good day. This can create a difficult situation. If however your medical records reflect the unpredictable nature of your illness, you have a better chance at fighting the challenge to your disability insurance claim.

Source by Jason Newfield

Lung Cancer and Smoking

According to the American Cancer Society, today, lung cancer is the leading cause of cancer-related deaths in women. In 2006, an estimated 162,460 deaths resulted from lung cancer, and of those deaths, an estimated 79,560 of those were women. At first glance, the numbers might not seem so alarming., but what is alarming is the fact that “between 1960 and 1990, deaths from lung cancer among women increased by more than 400%” (www.lungcancer.org). Do you need a moment to digest those statistics? I know I did.

In addition, to being the leading cause of cancer-related death for women, the National Cancer Institutes reports that the expected 5-year survival rate for all patients in whom lung cancer is diagnosed is 15.5 percent compared to 64.8 percent for colon, 89 percent for breast and 99.9 percent for prostate cancer. Further, about 6 out of 10 people with lung cancer die within 1 year of being diagnosed with the disease (Lungusa).

After reading the data, I did some research to uncover the cause of such high incidences of lung cancer overall, and particularly, in women. Studies show that while lung cancer can be caused by a variety of factors, including asbestos and environmental pollution, smoking is the leading cause of lung cancer in the United States, with an estimated 90 percent of lung cancer cases caused by smoking. 5 What that means, is that 90 percent of lung cancer cases are preventable; and in 2006, of the 79,560 women that died, 71,685 of those deaths were senseless.

To make the numbers understandable from a layman’s point of view, what they correlate to is this: more people have died from smoking in one year than there were American military casualties in Iraq since the war started in 2003, and more than were murdered in the United States in 2005.

Hence, it begs to be considered that if lung cancer is preventable, why do over 1.1 billion people, over 1/6 of the world’s total population choose to smoke and ingest harmful tobacco products? This includes 33% of the African population; 57% of the people in the United States; 72% of Europeans; 48% of Southeast Asians, 39% of Eastern Mediterraneans; and 68% of people in Western Pacific nations (World Heath Organization, 2000 estimates).

The answer in short is addiction.

With this in mind, I struck out to learn more about the history of the cigarette. I was in for quite an education. Besides providing you with a history of the cigarette, this article will also educate you on what lung cancer does to your body, steps you can take to prevent it, methods of screening, and resources. Hopefully, what you learn in the following pages will enable you to make a decision that could save a life.

History of the Cigarette

The primary ingredient in a cigarette is tobacco. Tobacco in cigarettes is usually a blend of several types of the tobacco leaf, which have the effect of euphoria on the nervous system. Tar, a by-product of the cigarette, is produced when the cigarette is lit. Nicotine is also part of the make up of the tobacco leaf. When a cigarette is lit and the smoke inhaled, nicotine moves into the blood vessels of the mucous membranes, skin and lungs, and then directly to your brain [within seconds], increasing adrenaline production, stimulating neurons in the brain that cause “good” feelings, which encourage a person to want to repeat the action that caused that feeling (addiction), further stimulating the production and release of endorphins, which cause feelings of euphoria. (howstuffworks.com).

Man has been using the tobacco product for thousands of years. Native Americans smoked prior to the arrival of European explores; and the practice is even depicted in early Mayan art dating back to 1,500 years ago, when tobacco was also used as a medicinal antidote. In the 16th century, smoking was common mostly among sailors. The cigar later became popular in England in the 1820s. The cigarette soon appeared in Spain. During World War I, tobacco products were included in military rations. After the war, manufacturers began advertising cigarette smoking as glamorous, and the rest, as they say is history (Wikipedia).

When manufacturers recognized the marketability of the cigarette, they became interested in learning how to get more people to smoke. Advertising was one way. The other way was to include additives that made cigarette smoking less harsh, more tasty…and more addictive. Today, there are over 599 known additives in cigarettes that have been approved by the United States (U.S.) Government. What most people don’t know is that while some of these additives are safe and can be found in everyday foods, others are extremely dangerous when ingested and when burned, these additives produce chemical compounds that are toxic.

Some of the additives included in cigarettes are carbon monoxide, nitrogen oxides, hydrogen cyanide, ammonia, formaldehyde and hydrazine, among others. These harsh chemicals have no natural place in a human body, and even to a layman, it is obvious that these products would be harmful when ingested. Carbon monoxide, for example, a poisonous gas found in car exhaust smoke, when inhaled, can cause fatigue, nausea, disorientation and chest pains. Hydrogen cyanide is used to make fibers, plastics, dyes, pesticides and under the name of Zyklon B, was used as a genocidal agent in World War I. Ammonia is a household cleaner which causes skin, eye, nose, throat and lung irritation. Formaldehyde is used to manufacture building materials and to preserve dead bodies. It causes watery eyes, burning of the eyes, nose and throat, coughing, wheezing and skin irritation. Together with the other additives in a cigarette, each time a smoker lights up and inhales, they are inhaling a “cocktail” of carcinogens, creating a multitude of illnesses in their bodies and speeding up death. At the same time, because the physiological and psychological rewards are so immediate, most smokers, after just one cigarette, are on their way to addiction. Nowadays, cigarettes can be found pretty much everywhere, at neighborhood grocery stores, gas stations, street vendors and even on-line.

Seizing on the lucrative business of addiction, cigarette manufacturers produce approximately 5.5 trillion cigarettes globally each year. China, the United States, Russia, and Japan-the four largest producers-manufacture just over half of the world’s supply. In 2004, China produced 1.79 trillion cigarettes, 32 percent of the global total. The United States produced 499 billion, 9 percent of the total. ([http://www.worldwatch.org/node/4320])

There are billions of dollars spent every year to target current smokers and recruit new ones. According to the World Health Organization (WHO), major manufacturers like China National Tobacco Company (China), Altria Group, Inc., (previously Phillip Morris Companies) (USA), British American Tobacco PLC (UK), Japan Tobacco (Japan), R J. Reynolds Tobacco (USA), Reemtsman (Germany), Altadis (France and Spain), among others, spend a lot of money to market tobacco. The United States alone spends over $10 billion dollars. This includes promotional funds to retailers to expedite the sales.

This marketing is targeted at adults and youth alike, particularly preying on the naiveté’, rebelliousness, experimentive nature of young adults. Cigarette brands like Virginia Slims and Capri’s designs appeal to young women, wanting to look more mature, feminine or sexy; and the Joe Camel and the Marlboro man entice young boys who want to look cool, tough and grown up. Cigarette manufacturers went so far as to give cigarettes names that would appeal to younger people. After public outcry from advocacy groups, this year, J. Reynolds Tobacco Co., in particular, agreed to stop using candy, fruit and alcohol names for flavored cigarettes that might appeal to children, The company was using names such as Twista Lime”, “Warm Winter Toffee” and “Winter MochaMint.

In the 21st century, the marketing efforts to target youth has evidently stepped up, showing the tenacity of the tobacco manufacturers in retaining what could be their most loyal customers, in spite of over 40 years of opposition from both public and private segments. In the late 1960’s, attempts to curb adolescent exposure to cigarette advertising began with the banning of television and radio ads. [However]…the proportion of high school students who smoked rose from 27.5 percent in 1991 to a peak of 36.4 percent in 1997 before drifting back to 28.0 percent in 2000). This increase…was among the factors that prompted a reexamination of regulatory policy, culminating in the November 1998 Master Settlement Agreement (MSA), signed by tobacco manufacturers and forty-six states’ attorneys general, prohibits tobacco manufacturers from taking “any action, directly or indirectly, to target Youth within any Settling State in the advertising, promotion or marketing of Tobacco Products.” As a blanket youth-targeting ban, this provision applies to all types of advertising, including transit ads, billboards, and magazines (Healthaffairs). Today, in most countries, there are age limit restrictions on the purchase of cigarettes by youth.

As awareness of the health-related disadvantages of smoking and other tobacco products came to the forefront of public consciousness, the public has seen more airing of advertisements, public service announcements, smoking education awareness campaigns, lobbying for smoke free movies and the passing of no-smoking laws in certain building, states and even countries. In countries across the world, like Armenia, Argentina, Australia, Canada, Cuba, France, India, Lithuania, Malaysia, Norway, Singapore, South Africa, Spain and Turkey, smoking is banned in certain public places or workplaces. As always, the cigarette manufacturers are trying to find ways to use even the advertising for non-smoking to their advantage, with large cigarette vendors hiring public relations firms to help them create soft marketing, “non-smoking” ads that would draw in more smokers.

In addition, in order to counter the loss in profits from the bans against smoking and public outcry in the 1980’s in the United States and other countries, more aggressive marketing is done on the continents of Asia and Africa, where cigarettes are marketed in television, radio and print advertising, at schools, sports and music events, and even more subtly, in the form of sponsorship at charitable events. Still, there are thousands of organizations working to ban smoking, educate youth and adults about smoking and health related issues, like lung cancer, emphysema, heart disease among other diseases.

What Lung Cancer Does To Your Body

While all the advertising inundates the public with images of how “sexy” smoking is supposed to be, what they don’t show is the ugly side of smoking, how it stains, erodes and damages your teeth, taste buds, throat, esophagus, lungs and inevitably, threatens your life. Granted, not everyone who smokes gets lung cancer and dies; however, it is proven that cigarettes do contribute to lung cancer.

Lung cancer occurs when cells start to grow uncontrollably in a random fashion, causing tumors in the bronchial tubes, mucous glands, and near the air sacs and surface of the lungs. These tumors grow rapidly into larger tumors and can eventually spread throughout the body and into the chest, bones, spine or other organs. The more rampant the cancer in a body, the higher chance one has of multiple tumors, organ failure; and, a lesser chance for survival.

Lung Cancer Prevention/Detection/Screening/Treatment

One can take several steps to prevent the occurrence of lung cancer. First, if you are a non-smoker, promise yourself that you will never pick up a cigarette. Secondly, avoid inhaling second-hand smoke. Also, since lung cancer can also be caused by toxins in the environment, like radon gas and asbestos, it is important to be aware of their existence, and to avoid exposure.

For people who have a history of lung cancer in their families, lung cancer can be detected by screening via x-rays, CT scans, biopsies, testing of coughed up mucus, and blood tests. Lung cancer, in its early stages has no noticeable symptoms; however, as it progresses, lumps, coughing, blood-stained phlegm, breathlessness, chest pain, recurrent pneumonia or bronchitis, weight loss and fatigue can occur.

According to lungcancer.org, there is currently no approved screening test for lung cancer that has been proven to improve survival or detect localized disease. However, there are many studies under way to find an appropriate screening tool. If detected early, lung cancer can be treated, depending on the type and extent of the cancer. In instances where the cancer is localized in the lung, surgery can remove the tumors. When the cancer has spread beyond the chest, chemotherapy and radiation are used as treatment. Some patients can even elect to have lung transplants, where the diseased lung is replaced by a healthy one.

Resources/Initiatives

For those trying to quit, the good news is that there are a myriad of resources, nationally and internationally, to help people quit. International agencies like the Environmental Protection Agency (EPA) and the World Health Organization (WHO) have extensive data and resources on their websites to educate the public about the dangers of smoking. In 1998, WHO established the Tobacco Free Initiative (TFI), which is dedicated to framing global tobacco policy and focusing international resources on the global tobacco epidemic.

The American Cancer Society, the National Cancer Institute, and lungcancer.org are among the many organizations that provide information, education and resources to help smokers quit. There are telephone, on-line, group and one-on-one support groups, government and community funded that provide counseling. Some people use and therapy, various medications, including the patch, hypnosis and nicotine pills to assist them in quitting.

One of the most important factors in quitting and sticking to it is having a strong support system. If you are trying to quit or help someone to quit, keep in mind that cigarette smoking is extremely addictive and that people trying to quit can experience anxiety, depression and irritability, as they crave the nicotine their body has become accustomed to ingesting. Because of how addictive nicotine is, some people give up quitting or experience relapses in smoking after only a short time. Thus, it is very important to get lots of support from family and friends, since they can provide reminders of the benefits to quitting.

Other Risks

Besides the risk of getting lung cancer, there are a multitude other health related illnesses that can develop due to smoking, including heart attack and stroke, blood pressure, respiratory diseases, cancer in other parts of the body and cardiovascular diseases. People who smoke also put others around them at risk. Women who smoke give birth to babies with lower birth rates, children of parents who smoke can develop respiratory illnesses and people who inhale second-hand smoke have a higher risk of developing lung cancer or other smoking-related disease. (National Cancer Institute).

Then, there is the economic downside to smoking. According to http://www.cancer.org, tobacco creates “…hugely increased healthcare costs…diversion of agricultural land that could grow food, the costs of fires and damage to buildings caused by careless smokers, the resulting increase in insurance premiums, employee absenteeism, decrease in worker productivity…widespread environmental costs due to large-scale deforestation…pollution, and the millions of discarded butts and cigarette packaging that litter streets and waterways (www.cancer.org).”

In the USA, between 1997 and 2001, tobacco smoking resulted in $92 billion of annual productivity losses; worldwide, smoking accounted for 10% of fire deaths, the total [number of people] killed by fires caused by smoking [was] 300,000 and the total cost of fires caused by smoking was $27 billion. In 2003, cigarette litter accounted for 34% of the trash collected along the world’s coasts; every year, children start 1,000,000 fires using lighters, and as of 2005, the economic costs to the economy healthcare included was upwards of $300 billion dollars (www.cancer.org).

Benefits of Not Smoking

On the upside, there are a myriad of benefits to quitting smoking. You can prevent health related illnesses like emphysema, heart disease and lung cancer by never smoking or quitting smoking as soon as possible. Quitting as soon as possible can improve the quality and longevity of your life. According to the National Cancer Institute, there are almost instant health improvements when a person quits smoking. “Within just a few days of quitting, a person’s sense of taste and smell return, and breathing becomes easier; blood pressure, which becomes elevated while smoking, begins to return to normal. Research has shown that people who stop smoking before the age of 35 reduce their risk of developing a tobacco-related disease by 90%, but older smokers can also benefit greatly from quitting. Even smokers who quit after being diagnosed with a smoking-related illness reduce their risk of medical complications and of dying from a tobacco-related disease”.

The key thing that I want to leave with you is this. Your life is in your hands – literally. You are in control. Smoking, as addictive as it may be, is a choice. Every time a smoker lights up a cigarette and inhales, that individual is making a conscious decision to harm his/her body; and every time the smoker exhales the cigarette smoke, he/she is harming others and the environment.

Source by Maimah Karmo

The Federal National Flood Insurance Program Has Grown to Epic Proportions – Unworkable

The Federal Flood Insurance Program, referred to as the National Flood Insurance Program (NFIP) is a total disaster, pun intended of course, you know me. How bad has it gotten? Well, they are redrawing flood maps to help get more premiums to pay for their costs, costs which are out of line simply because FEMA is so wasteful, politically correct, and inefficient, even if it is one of the more efficient agencies of our Federal Government. Yes, let’s talk about all this shall we?

The GAO (Government Accounting Office) put out an interesting report on September 18, 2013 titled; “National Flood Insurance Program: Continued Attention Needed to Address Challenges,” GAO-13-858T, which was quite telling, it stated in the introduction amongst other things that the National Flood Insurance Program (NFIP) has been on the “high risk list” since 2006, and it owes well over $24 Billion to the US Treasury, not including the devastating Boulder Colorado flood in the Summer of 2013. The report then stated;

“NFIP’s financial condition highlights structural weaknesses in how the program has been funded–primarily its rate structure. The annual amount that NFIP collects in both full-risk and subsidized premiums is generally not enough to cover its operating costs, claim payments, and principal and interest payments for the debt owed to Treasury, especially in years of catastrophic flooding, such as 2005.”

In 2005 they are speaking of Katrina, Rita and several Hurricane storm surge hits and the flooding from the Lake Ponchartrain levee breaches. Also included in the current deficit and bankrupt fund is money allotted for political reasons during the Obama re-election campaign in October/November of 2012, Super Storm Sally, I mean Sandy-Pants, where the US taxpayer took it in the shorts and big government paid out anyone with a sniffle or wet shoes.

Another interesting testimony was given by FEMA Director to the US Senate sub-committee, you can also read about this statement; “Written testimony of FEMA Administrator Craig Fugate for a Senate Committee on Banking, Housing, and Urban Affairs, Subcommittee on Economic Policy hearing titled “Implementation of the Biggert-Waters Flood Insurance Reform Act of 2012: One Year After Enactment” which appeared in the online archives on September 18, 2013.

Why is all this happening? Because the government thought that it could solve all its problems by selling insurance where private markets didn’t dare due to risk. The government in its infinite wisdom and bureaucracy thought it could manage the program better and more profitable. Since that has never to my knowledge happened in government whether we are talking about Amtrak, US Postal Service, or ObamaCare, one has to ask why anyone is surprised this isn’t working. Worse now, the bankrupt FEMA, and NFIP wants to soak those who are not at risk with higher forced premiums to pay for their shortfalls. Ouch.

Yes, ouch, like the US middle class consumer home owner can take anymore. Now they have the DHS, yes, the Department of Homeland Security calling it a national security issue, convenient, meaning they’ll have the power to enforce their authority onto anyone and in this case perhaps everyone they choose. Please consider all this and think on it.

Source by Lance Winslow