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Why Your Organization Needs a Business Plan

Business plans are documents that map out a company’s future objectives and the strategies that will be employed to achieve them. Due to the general nature of these documents, many organizations wrongly assume that business plans are exclusively for young companies just starting out.

However, business plans can be an effective tool for organizations that have been operating for years or are simply looking to grow. In fact, companies that approach financial institutions for a loan to expand operations will often be denied if they don’t have a strong business plan in place.

To avoid losing financial support and similar setbacks, drafting a business plan that’s unique to your company is critical and can provide the following:

  • A means for starting a business on the right foot. For startups, a business plan can help turn ideas and capital into a viable business model. Specifically, a good business plan can help you secure financing from investors and identify your overall strengths, weaknesses, opportunities and threats.
  • Strategies for managing an existing business. For organizations that have been in operation for years, business plans can provide helpful guidance on a number of issues. In general, business plans can help a business communicate its vision to employees and external parties, develop accurate financial forecasts and evaluate company growth.
  • Opportunities to grow. When a business is looking to venture into new markets or expand its services, business plans can be particularly helpful. Business plans provide organizations with opportunities to raise capital, create a strategy to manage growth and mitigate expansion risks.

Business plans are not a “one-size-fits-all” endeavour, and organizations will need to be thorough and specific when crafting an effective plan. To view samples and learn some helpful best practices, visit Canada Business Network’s website.

© Zywave, Inc. All rights reserved


Ontario Overhauls Employment Standards Laws

Overview

On Nov. 22, 2017, the Government of Ontario passed Bill 148, the Fair Workplaces, Better Jobs Act, 2017 (Bill 148). Bill 148 makes significant amendments to Ontario’s Employment Standards Act, 2000 (ESA), Labour Relations Act, 1995 (LRA) and the Occupational Health and Safety Act (OHSA).

Among other changes, Bill 148 raises the minimum wage, mandates equal pay for part-time, temporary, casual and seasonal employees doing the same job as full-time employees, and expands job-protected leaves for employees throughout the province.

This Compliance Bulletin provides a summary of the major changes included in Bill 148.

Changes to the Employment Standards Act

The majority of Bill 148 focuses on changes to the ESA. Changes to the ESA will come into force throughout 2017, 2018 and 2019.

Employee Misclassification – Effective Immediately

Bill 148 prohibits employers from misclassifying employees as “independent contractors.” While this practice has been prohibited in the past, there is now an explicit ban on treating employees as independent contractors for the purposes of the ESA. This prohibition is intended to address cases where employers improperly treat their employees as if they are self-employed and not entitled to the protections of the ESA. In the event of a dispute over employee classification, the employer will be responsible for proving that the individual is not an employee.

Extended Parental Leave – Commencing Dec. 3, 2017

Formerly this leave was up to 35 weeks if the employee took pregnancy leave, and 37 weeks otherwise. Under the new legislation, this leave can be taken up to 61 weeks if the employee took pregnancy leave, and up to 63 weeks otherwise. This change comes as a result of new federal changes to employment insurance (EI). Employees are only entitled to this extended parental leave if the child is born or comes into their custody, care and control after Dec. 3, 2017.

New Critical Illness Leave – Commencing Dec. 3, 2017

Prior to Bill 148, employees could take up to 37 weeks to provide care or support to their critically ill child. Under the new changes, an employee is entitled to take up to 17 weeks of leave in a 52-week period to provide care or support to a critically ill adult family member and up to 37 weeks to provide care or support to a critically ill child who is a family member.

This additional leave corresponds with the new EI entitlement to Family Caregiver benefit for adults. To be eligible for critical illness leave, employees must be employed for at least six months. For the purposes of this leave, the definition of “family member” is quite broad and even includes people who consider the employee “to be like a family member.”

$14 and $15 Minimum Wage – Commencing Jan. 1, 2018, and Jan. 1, 2019

On Jan. 1, 2018, the general minimum wage in Ontario will rise to $14 per hour and then to $15 per hour on Jan. 1, 2019. After Jan. 1, 2019, the minimum wage will be subject to an annual inflation adjustment on Oct. 1 of each year. The table below demonstrates the expected increases to the minimum wage.

Affected Workers Current Wage Jan. 1, 2018 Wage Jan. 1, 2019 Wage
General Minimum Wage $11.60 $14.00 $15.00
Students $10.90 $13.15 $14.10
Liquor Servers $10.10 $12.20 $13.05
Homeworkers $12.80 $15.40 $16.50

Paid Personal Emergency Leave – Commencing Jan. 1, 2018

Starting Jan. 1, 2018, personal emergency leave (PEL) will become available to all employees, not just employees of employers who regularly employ 50 or more employees. Moreover, going forward, two days of PEL will be paid, provided that an employee has been employed by their employer for more than a week. The paid days will have to be taken before any unpaid days of PEL in a calendar year. Under Bill 148, employers retain the right to require evidence of entitlement to days of PEL, but they will not be allowed to require a certificate from a qualified health practitioner.

 Domestic or Sexual Violence Leave – Commencing Jan. 1, 2018

A new domestic and sexual violence leave has been established under Bill 148. For employees that have been employed for at least 13 consecutive weeks, the new legislation provides up to 10 individual days of leave and up to 15 weeks of protected leave when an employee or their child has experienced or is threatened with domestic or sexual violence. The first five days of leave each calendar year would be paid, the rest would be unpaid.

This leave of absence may be taken for one of the following purposes:

  • To seek medical attention in respect of a physical or psychological injury or disability caused by the domestic or sexual violence
  • To obtain services from a victim services organization
  • To obtain psychological or other professional counselling
  • To relocate temporarily or permanently
  • To seek legal or law enforcement assistance, including preparing for or participating in any civil or criminal legal proceeding related to or resulting from the domestic or sexual violence

The new legislation also requires employers to put mechanisms in place to protect the confidentiality of records they receive or produce in relation to an employee taking domestic or sexual violence leave.

Extended Pregnancy Leave – Commencing Jan. 1, 2018

Starting Jan. 1, 2018, pregnancy leave for employees who suffer a pregnancy loss will be extended from six weeks to 12 weeks after the pregnancy loss occurs. Employees will be able to satisfy their entitlement to this leave by providing a medical certificate from a physician, nurse practitioner or midwife.

Family Medical Leave – Commencing Jan. 1, 2018

The entitlement to family medical leave, which allows employees to provide care or support to a family member with a serious medical condition, will be increased from an eight-week leave in a 26-week period to a 28-week leave in a 52-week period.

Leave for the Death of a Child and for Crime-related Disappearance – Commencing Jan. 1, 2018

Bill 148 creates a new, separate leave for child death from any cause for a period of up to 104 weeks. The legislation amendments also establish a separate leave for crime-related child disappearance for a period of up to 104 weeks.

Vacation Entitlement – Commencing Jan. 1, 2018

Currently, the ESA vacation entitlement is set at two weeks per year for all employees. Now, employees with five or more years of service as of Jan. 1, 2018, will be entitled to three weeks of vacation time and 6 per cent vacation pay. What’s more, employers will be required to retain records related to vacation for a period of five years.

Public Holiday Pay – Commencing Jan. 1, 2018

Beginning Jan. 1, 2018, a new formula for calculating public holiday pay will be introduced. The new calculation will divide the wages earned in the pay period immediately preceding the public holiday by the number of days actually worked. The new legislation also requires employers to provide an employee with a written statement that sets out certain information when a day is substituted for a public holiday.

Overtime Pay – Commencing Jan. 1, 2018

Starting Jan. 1, 2018, employees who hold more than one position with an employer and who are working overtime must be paid at the rate for the position they are working at during the overtime period.

Equal Pay for Equal Work – Commencing April 1, 2018

Starting April 1, 2018, employers will be required to pay casual, part-time, temporary and seasonal employees at the same rate as full-time employees if those employees perform substantially the same kind of work, in the same establishment. This requirement will extend to temporary help agencies, such that workers of temporary help agencies must be paid at the same rate of pay as employees of the client company they are assigned to, provided they perform substantially the same kind of work.

Differences in pay between employees of different status will only be permitted where the difference in pay is made on the basis of seniority, merit, earnings by quantity or quality of production, or other factors, other than sex or employment status.

It should be noted that employees will also be able to request a review of their rate of pay if they believe that they are not receiving equal pay to full-time or permanent employees. The employer will then have to respond to the request with either an adjustment in pay or a written explanation. What’s more, employers will be expressly prohibited from committing reprisals against employees (or temporary help agency workers) who make such a request and must permit or discuss or disclose their rate of pay to other employees.

Scheduling – Commencing Jan. 1, 2019

Starting Jan. 1, 2019, new rules for scheduling will come into force. Under these rules:

  • Employees with three months’ service will be permitted to submit a written request to their employer for a change in work schedule or work location. If an employer denies the request, it must provide reasons for the denial.
  • The “three-hour rule” will change so that employees who regularly work more than three hours per day, but upon reporting to work are given less than three hours, must be paid for three hours of work.
  • Employees will have the right to refuse an employer’s request or demand to work on a day that the employee was not scheduled to work if the request or demand is made less than 96 hours before the time the employee would commence work. Employers are exempt from this provision if the employer’s request is to deal with an emergency, to remedy or reduce a threat to public safety, ensure delivery of essential public services or for other reasons prescribed by regulation.
  • Employers that cancel an employee’s scheduled day of work or on-call period with less than 48 hours’ notice will be required to pay the employee wages equal to the employee’s regular rate for three hours of work.
  • An employee who is “on call” and not called to work (or who is called into work and works for less than three hours) must be paid his or her wages for three hours of work.

Changes to Labour Relations Act

Bill 148 also brings about significant amendments to Ontario’s labour relations regime under the LRA. Bill 148’s amendments to the LRA will come into force on Jan. 1, 2018. Most notably, the following changes will come into force:

  • Card-based certification will be permitted in the building services, home care and community services, and temporary help agency industries.
  • Prior to seeking certification, unions with the support of at least 20 per cent of an organization’s employees will be entitled to access a complete list of the employees in the proposed bargaining unit, along with those employees’ phone numbers and personal emails.
  • Remedial certification will be mandatory where an employer interferes with the conduct of a certification vote.
  • The Ontario Labour Relations Board (OLRB) will be allowed to conduct votes outside the workplace, as well as electronically and by telephone.
  • The OLRB will have the power to consolidate a certified bargaining unit with an existing bargaining unit of employees of the employer represented by the same union.
  • Maximum fines for contravention of the LRA will increase to $5,000 for individuals and $100,000 for organizations.

Changes to Occupational Health and Safety Act

Bill 148 contains just one minor change to the OHSA, which was added to the bill at the last minute.

High-heeled Shoes – Effective Immediately

Bill 148 prevents employers from requiring workers to wear footwear with an elevated heel (i.e., high heels) at work, unless such footwear is required for the worker’s safety. Exceptions are allowed for workers in the “entertainment and advertising industry,” which includes the production of a live or broadcast performance or visual, audio or audio-visual recordings of performances.

Next Steps for Employers

To prepare for these changes, employers should immediately review and revise all handbooks, policies and practices that are affected by the new legislation. The full text of Bill 148 can be reviewed here. In addition, the Government of Ontario has published an overview of Bill 148 that employers can review here.

© Zywave, Inc. All rights reserved


Safety Programs and the Impact to Your Bottom Line

If you could save your company money, improve productivity and increase employee morale, would you? Workplaces that establish safety and health management systems can reduce their injury and illness costs by 20 to 40 per cent. Safe environments also improve employee morale, which positively impacts productivity and service.

In today’s business environment, these safety-related costs can be the difference between reporting a profit or a loss. Use these tips to understand how safety programs will directly affect your company’s bottom line.

Measuring the Cost of Safety

Demonstrating the value of safety to management is often a challenge because the return on investment (ROI) can be cumbersome to measure. Your goal in measuring safety is to balance your investment against the return expected. Where do you begin?

There are many different approaches to measuring the cost of safety, and the way you do so depends on your goal. Defining your goal helps you to determine what costs to track and how complex your tracking will be.

For example, you may want to capture certain data simply to determine what costs to build into the price of a product or service, or you may want to track your company’s total cost of safety to show increased profitability, which would include more specific data collection like safety wages and benefits, operational costs, and insurance costs.

Since measuring can be time consuming, general cost formulas are available. A Stanford study conducted by Levitt and Samuelson places safety costs at 2.5 per cent of overall costs, and a study published by the Economist Intelligence Unit (EIU) estimates general safety costs at about 8 per cent of payroll.

If it is important for your organization to measure safety as it relates to profitability, more accurate tracking should be done. For measuring data, safety costs can be divided into two categories:

Direct (hard) costs, which include:

  • Safety wages
  • Operational costs
  • Insurance premiums and/or attorney’s fees
  • Accidents and incidents
  • Fines and/or penalties

Indirect (soft) costs, which go beyond those recorded on paper, such as:

  • Accident investigation
  • Repairing damaged property
  • Administrative expenses
  • Worker stress in the aftermath of an accident, resulting in lost productivity, low employee morale and increased absenteeism
  • Training and compensating replacement workers
  • Poor reputation, which translates to lost business share and difficulty attracting skilled workers

When calculating soft costs, minor accident costs are about four times greater than direct costs, and serious accidents about 10 to 15 times greater, especially if the accident generates fines or litigation costs.

Just the act of measuring costs will drive improvement.  In theory, those providing the data become more aware of the costs and begin managing them. This supports the common business belief that what gets measured gets managed. And, as costs go down, what gets rewarded gets repeated.

How Can You Show ROI?

Studies indicate that for every $1 invested in effective safety programs, you can save $4 to $6 as illnesses, injuries and fatalities decline. With a good safety program in place, your costs will naturally decrease. It is important to determine what costs to measure to establish benchmarks, which can then be used to demonstrate the value of safety over time.

Also, keep in mind that your total cost of safety is just one part of managing your total cost of risk. When safety is managed and monitored, it can also help drive down your total cost of risk.

Safety as a Core Business Strategy

Industry studies report that companies who focus on safety as a core business strategy come out ahead. Safety experts believe that there is direct correlation between safety and a company’s profit.

© Zywave, Inc. All rights reserved


ABEX Finalist for MGA of the Year in the 2017 Insurance Business Awards

ABEX has been selected as a Finalist for MGA of the Year in the 2nd annual Insurance Business Awards. ABEX is honoured to be a finalist for the second year in a row, following its 2016 nomination.

Insurance Business Canada is the leading insurance-focused magazine with more than 80,000 monthly visitors across the globe. IBC readers voted in their thousands to select finalists in 23 categories – chosen for their stand-out
services, employee focus and corporate social responsibility among many. Winners will be selected by a panel of industry experts and announced on November 30th, 2017 during a stellar black-tie awards ceremony at Liberty Grand Toronto hosted by “TV’s funniest woman” Jessi Cruickshank.

“The finalists are the best of the best,” said Jessica Duce, Project Director of Insurance Business Awards Canada. “They demonstrate the resilience, innovation and sheer management smarts it takes to build a thriving business today. Success stories like theirs are the lifeblood of the Insurance industry.”

“A big thank you to our brokers for nominating ABEX for the Insurance Business Canada’s MGA of the Year award for the second year in a row.” said Marijana Dabic, VP Business Development at ABEX. “Being among the finalists is a great recognition by the Canadian insurance industry and we are truly honoured!”

For the full list of finalists and ticket information, visit Insurance Business Awards.

About ABEX:

ABEX Affiliated Brokers Exchange Inc., is an insurance wholesaler (MGA) providing niche products and insurance solutions to brokers across Canada. ABEX provides brokers with capacity and specialty facilities to create out of the box solutions for standard and misunderstood risks.

About Insurance Business Awards America:

The 2nd annual Insurance Business Awards is one of a series of international insurance events. The event will be held in Toronto and will bring together industry leaders to celebrate excellence in the Insurance industry and is designed to recognize individuals, teams and companies for their outstanding achievements and contributions to the field.

About Insurance Business:

Insurance Business is published throughout the world with multiple editions. The Canadian edition is published bi-monthly, with a readership of 9,000 professionals across Canada. The print edition is supported by an online industry hub offering daily news and business intelligence via a website, with 80,000 monthly visitors, and e-newsletter sent daily to 16,000 subscribers across Canada. Committed to delivering the latest industry news, opinion and analysis, Insurance Business Online takes a fresh approach to covering the need-to-know developments of the day from government and regulatory bodies, platforms, underwriters and insurance firms, as well as industry service providers.

 


Wrap-up Insurance Programs for Construction Projects

Insuring all of the risks associated with large-scale constructions projects can be a daunting task for the parties involved. The traditional insurance approach requires each party to procure and maintain separate coverage. Generally, the contractor and subcontractor then include the cost of insurance, plus a mark-up, in their project bids.

Typically, risk is then pushed downstream—from owners to general contractors, and from general contractors to subcontractors—through contractual indemnifications, contractually mandated minimum insurance requirements and additional insured provisions.

While this approach may be customary for the parties involved, it is not without complications. Due to the number of policies and insurers involved, the traditional approach creates the potential for unforeseen liability gaps to emerge. Some parties may have inadequate limits, gaps in coverage or no insurance at all. Furthermore, because there are various insurance companies covering one project, each claim has the potential to cause costly and time-consuming cross litigation.

As an alternative to having each party obtain separate liability policies, project owners and general contractors can turn to a wrap-up insurance programs to manage their risks.

What is Wrap-up Liability Insurance?

Sometimes referred to as controlled insurance programs (CIP), wrap-up insurance programs are centralized insurance and loss control programs intended to protect the project owner, general contractor and subcontractors under a single insurance policy or set of policies for the construction project.

Insurers typically offer two types of wrap-up programs based on the party sponsoring the program:

  1. Owner Controlled Insurance Program (OCIP): Under an OCIP, the project owner sponsors and controls the program. Accordingly, the project owner is the first named insured, and the general contractor, subcontractors and other participants are named insureds.
  2. Contractor Controlled Insurance Program (CCIP): Under a CCIP, the general contractor sponsors and controls the program. The general contractor is the first named insured, and the subcontractors and other participants are named insureds. Depending on the program, the project owner is either an additional insured or named insured.

While wrap-up programs are most frequently used for large, single-site projects, a rolling wrap-up can be used to insure multiple projects under one program.

What Types of Coverage Do Wrap-up Programs Provide?

Although each wrap-up program is designed to meet the needs of the specific project, most programs insure employer’s liability, general liability and excess liability exposures for claims arising from the construction project at the construction site during the policy period.

In many instances, builder’s risk, environmental liability, contractor default and other types of insurance can be included under a wrap-up program. Professional liability coverage can also be added to insure architects, engineers and other design professionals working on the project.

Liability occurring away from the project site is generally excluded under wrap-up programs. Accordingly, subcontractors, suppliers and vendors conducting off-site manufacturing or the assembling of building components may be excluded from the program. Claims arising from goods or materials in transit are often also excluded, preventing haulers and truck drivers from being covered under the program.

Wrap-up programs typically do not insure specific operations such as blasting, demolition or other high-risk operations. However, each program is different, and it is critical for program sponsors to be familiar with exactly what is and is not covered.

Benefits of Wrap-up Programs

Wrap-up programs can provide a number of benefits, including the following:

  • Potential cost savings: Wrap-up programs are designed to reduce the overall cost of insurance by providing what amounts to volume discounts for the entire project.
  • Consolidated coverage: Under the traditional approach, by which parties procure their own insurance, the project owner and general contractor can set minimum insurance requirements for downstream participants. However, it can be difficult to determine whether contractors and subcontractors have obtained the correct limits and types of coverage. By contrast, under wrap-up programs, the controlling entity exerts greater control over the types, scope and limits of coverage.
  • Higher limits: Most wrap-up programs have very high limits. If a major disaster occurs at a project and is not covered by a wrap-up program, the responsible contractors may not have adequate limits to cover the claim. Thus, the owner or general contractor may be on the line for the difference. However, if the project is covered by a wrap-up program, the limit should be sufficient to cover the incident.
  • Centralized safety and risk management: Program sponsors, working in conjunction with their brokers, the insurer and safety professionals, can maintain centralized safety and risk management services. Doing so can reduce the frequency and severity of injury and property damage claims, thereby reducing insurance costs for the project.
  • Efficient claims processing: Because a single insurer is the control point for managing claims, the process tends to be more efficient under wrap-up programs.
  • Reduced disputes among insured parties: By covering all of the parties on a project under one policy, wrap-up programs reduce coverage disputes and subrogation issues between insureds and insurance carriers for covered claims that occur on the job site.
  • Access to projects: For contractors and subcontractors, wrap-up programs can provide them with access to projects that they may not have otherwise been able to properly insure.

Potential Drawbacks

Because wrap-up programs often offer a broad range of coverage for many entities, they can be expensive to obtain. However, program sponsors are typically able to reduce costs by selecting higher deductibles or by distributing premium costs to all parties covered under the policy.

Since wrap-up programs tend to encompass several types of coverage for a number of different organizations, program sponsors generally inherit administrative tasks. Beyond purchasing the wrap-up program, sponsors may be required to review and approve program documents, meet with underwriters and review claims. To address these issues, plan sponsors can designate or hire individuals to help administrate the programs, which can add to overall costs.

While wrap-up programs often result in cost savings, like any insurance policy, they are subject to market fluctuations. Accordingly, potential cost savings should be carefully considered.

© Zywave, Inc. All rights reserved.


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