Daily Market Update - August 12, 2014

Self-insurance, a risk to our business?… Federal office seeks to find the next big thing in healthcare… Managing the legal risk in employment… And fraudulent claim for more than $3 million lands kitchen salesman in court.

Is self-insurance a risk to our business?

A Silicon Valley business has created software to make it easier for companies to operate a self-insurance scheme. While some risks would be far too expensive to insure in this way, healthcare is one area that some businesses are choosing to operate their own schemes. To protect against huge loses the businesses take out ‘stop loss’ cover. While its claimed that companies can save around 20 per cent by self-insuring their workforce’s healthcare, this is disputed by critics. The concern for the industry is the potential loss of business for healthcare policies if this becomes a more popular model. Read the full story.
 
The next big ideas in health care?
The Affordable Care Act is still in its infancy and there are lots of lessons already being learnt. One part of the act created a new federal office tasked with investigating innovations in the health care industry and experiments are underway across the states. The Center for Medicare and Medicaid Innovation has a $10 billion budget and is meant to improve healthcare and find ways to make America’s healthcare more affordable. Some question whether it is up to the job although most agree that it is a job that needs to be done. With more expensive drugs and treatments being made available every year, and a population that is living longer there is a strong case for innovation. Read the full story.
 
Managing legal risk
Employment law and obligations for employers change from time to time and only the major changes ever make the headlines. It is therefore essential for businesses to do everything possible to keep on top of current legislation, especially as we live in a highly litigious world. Employee contracts should clearly set out practices and expectations which reduce the legal risk but can also reduce other risks in the business too; having a solid Internet usage policy for example. Bullying is something that is taken very seriously in employment tribunals and you should have and enforce such policies rigidly. Social media policies are becoming increasingly important for businesses; what should employees be allowed to say about the business on their personal accounts and at what point have they gone too far. There are many other potentially high-risk legal obligations including discrimination, recruitment and the use of unpaid interns. Read the full story.
 
Man convicted of arson and insurance fraud
Business owner, Justin Hindry, has been found guilty after he burnt down his kitchen and bathroom showroom in a bid to fraudulently claim more than £2m (US$3,334m) from Allianz Insurance. Mr Hindry claimed on his insurance policy following a devastating fire but it didn’t take long for the substantial claim for buildings, contents and business interruption to unravel, with an early inspection causing concern. The Allianz fraud investigation team joined forces with Cunningham Lindsey’s major loss team and found credible evidence which pointed to foul play. Despite claiming that he was eight miles away when the fire was set, both eye witnesses and evidence placed Mr Hindry in the proximity of the showroom when the fire was lit. Chris Aplin, Head of Fraud at Cunningham Lindsey, said: "Financial motive is often a significant indicator of fraud and our award-winning, proactive financial screening identified that all was not well with Mr Hindry’s business prior to the fire.”
 

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