At Issue FAQ

The first edition of At Issue Frequently Asked Questions will be featured in the upcoming Summer 2017 At Issue Newsletter. Below you can find the full list of questions asked to our legal team. Stay tuned for the next FAQ on the blog and keep an eye out for At Issue in your mailbox.

Leslie Blozan & Greg Miller teamed up to answer some of the most frequently asked questions in Business, Elder Law, Insurance, and more!

If you have general questions for our legal team, send them to mharvey@stonedeanlaw.com for a chance to see it answered in the next edition of At Issue.

Click on a question below to be taken straight to the response

Insurance:
1) What is small-business insurance and how does it work?
2) What’s the difference between term insurance and whole life?
3) What happens when my insurance company totals my car?
4) What happens when an insurance policy matures?
5) When is an insurance policy considered “bound”?
6) What’s the difference between insurance and reinsurance?

Slip & Fall:
1) When can a business be sued for a slip and fall?
2) What does one do if someone slips and falls in their restaurant/store?
3) How is a property owner or business operators liability determined in a slip-and-fall?
4) When can I sue for a slip and fall?

Elder Law:
1) How does one recognize elder financial abuse?
2) What is considered elder financial abuse in California?
3) Where and how does one report elder financial abuse?
4) How does one prove financial abuse?
5) Who needs a conservatorship and what does it do?
6) Where and how does one file for a conservatorship?
7) What’s the difference? Conservatorship vs. Guardianship
8) What are some alternatives to a conservatorship?

Insurance

Answered by Leslie Blozan, Esq.

1) What is small-business insurance and how does it work? 

Small business insurance is the same as any other insurance issued to a business, but with coverages, limits and costs consistent with the size and type of the business insured.

A small business usually needs liability insurance, in case they are sued. It needs property insurance to cover business property such as desks, computers, phones, inventory or whatever the business uses as a part of the business. A fire, theft, flood or other catastrophe can wipe out a business without property insurance. If the business has employees, it needs Workers Compensation insurance. Professionals need professional liability insurance, for malpractice claims.

Specific types of small businesses may need specialty insurance. There are specialty policies available for most businesses, small and large, tailored to specific risks of any particular industry. The business owner must have detailed conversation with an insurance professional to discuss the risks involved with any specific business, and the amounts of coverage required. An experienced broker can identify the proper policy for any small business.

2) What’s the difference between term insurance and whole life?

Term life insurance is effective only for the period the insured continues to pay premiums. It does not acquire any cash value and cannot be used as a savings or investment vehicle. Typically, term life policy coverage is available for higher values than whole life, and the premiums are much less expensive than whole life policies. Practically, a term policy is a good fit for a family breadwinner whose family is dependent on his/her income. It is not intended to remain in force for the balance of the person’s life, only until there is no further need for income replacement.

A whole life insurance policy contemplates an insured maintaining the insurance until death. The policy is intended for the entire, or whole life of the insured. It has a finite term, often at age 100 or 120. If the insured reaches that age, the face value of the insurance is paid to the insured. Whole life accrues cash value over the life of the policy. Loans can often be taken out against the policy’s cash value. Whole life policies are frequently used as investment vehicles, although that use is not favored by many financial advisors.

3) What happens when my insurance company totals my car?

When a car is damaged to the point where its value is less than the cost to repair it, an insurance company will declare the car a “total loss.”  The insured is paid the value of the vehicle. Often, the insurance company takes the car in exchange for the payment, as “salvage.”  Sometimes, the insured can keep the car, get partial repairs for the money paid and make the car drivable.

4) What happens when an insurance policy matures?

This is a term that applies to whole life insurance policies. When a whole life insurance policy matures, it means the insured has died, and the beneficiaries are entitled to payment of the policy amount, or the insured has lived to the end of the policy term, and will receive the face value of the policy in payment from the insurance company. Policy maturity means an insured, or beneficiaries will be paid the policy benefits.

5) When is an insurance policy considered “bound”? 

An insurance policy is “bound” when the insurance carrier accepts the prospective insured’s application for coverage. For the insured, it means they have coverage once the policy is bound. A policy number is assigned and a down payment on the premium is required. A binder is issued, containing a short summary of the key coverages, including policy limits and policy coverage forms. A binder is typically effective for 30-60 days, to allow the insurer to issue the policy and send it to the insured. Once the policy is issued, the binder terminates automatically.

6) What’s the difference between insurance and reinsurance? 

Insurance covers an insured for specified risks of loss. When an insurance policy has a high limit, in the millions of dollars, the policy itself is often re-insured. This means reinsurance companies agree to underwrite, or guarantee, a portion of the risk.

For example, insurer A may issue a policy to Bob Jones Co. for $100 million. Insurer A may then purchase reinsurance for half of the policy limit, with Reinsurer 1 for $25 million of the limit, and Reinsurer 2, for another $25 million. Under this scenario, insurer A retains responsibility for paying up to $50 million of a loss, and the reinsurers share the remaining $50 million. If a claim is made for policy limits, the insurer and reinsurers pay their proportionate share of the loss, according to the terms of the reinsurance policies.

Slip & Fall

Answered by Greg Miller, Esq.

1) When can a business be sued for a slip and fall?

You are always at risk for being sued when someone has a slip and fall on the property. Your ability to defend such a case is improved if you have complied with your floor inspection policies before the incident and have evidence to prove it, such as the security camera video, floor inspection documentation, and witness statements. You should also have a procedure for making settlement offers and securing a release promptly after an incident is reported, and before they are encouraged to sue.

2) What does one do if someone slips and falls in their restaurant/store?

Thorough investigation is key in being able to defend against a slip and fall case. Do not make any statements regarding who is at fault or what should have been done to avoid the accident. Take photographs, secure contact information and statements from all witnesses, identify and document the person doing the last inspection of the area before the incident, and secure security camera video. Notify your insurance carrier and/or attorney promptly.

3) How is a property owner or business operators liability determined in a slip-and-fall?

A property or business owner has a duty to use reasonable care in inspecting the property for potential hazards. The type of property and its use can impact what the owner is required to do in an effort to keep it safe.

4) When can I sue for a slip and fall?

If you have fallen and were injured you can sue for personal injuries within 2 years of the accident date.

Elder Law

Answered by Leslie Blozan, Esq.

1) How does one recognize elder financial abuse?

There are many signs of financial abuse, but they may be difficult to identify. The easiest to spot is missing money or unexplained bank and credit card transactions, but this can only be discovered if the abused person allows access to bank and credit card statements. Other signs are changes in behavior and appearance.

An abused person may lose weight because they are not eating due to lack of money for food. They may cancel services such as telephone, cable television, gardeners and housekeepers, to save money. Their prized possessions, particularly jewelry and valuable collectibles, may suddenly disappear. Overdue payment notices may be a sign; evictions; termination of utilities can be signs. Any sign of lack of funds where there was previously money is a potential indication of abuse.

Financial abuse is often accompanied by physical abuse, including isolation from family members, denial of medical care, and physical assault. Any sudden change in behavior should be a warning sign something might be happening. The appearance of a stranger intruding into a person’s life and receiving gifts is cause for concern. Attention must also be paid to family members. Children and grandchildren of the elderly are the most common financial elder abusers because they have the elder person’s trust and affection.

2) What is considered elder financial abuse in California?

Financial elder abuse is defined in Welfare & Institutions Code sec. 15610.30. A person guilty of financial elder abuse took, or assisted in taking, the property of a person 65 years old or older. The taking of property must have been done for a “wrongful use,” such as personal enrichment; with intent to defraud; or by undue influence. If these actions are a substantial factor in causing the elder person’s loss of property and/or money, a person has committed elder financial abuse.

Undue influence is excessive persuasion that overcomes the elder person’s will and causes them to take actions, or refrain from actions that cause an unfair result. There are many factors to undue influence, including the susceptibility of the elder person;  the relationship of the abuser to the elder person;  the tactics used by the abuser; haste or secrecy by the abuser in making changes in the elder person’s financial affairs; and the unfairness of the result of the abuser’s actions.

3) Where & how does one report elder financial abuse? 

Each county has Adult Protective Services, where complaints can be lodged. APS will investigate claims of abuse when the situation may be uncertain, or the concerned person has no definite proof. If there is a dire situation where immediate rescue is required, local law enforcement should be contacted. If there is physical abuse, under any circumstances, it should be reported to law enforcement.

In instances of financial elder abuse, the crime is often discovered after money has been taken. Evidence of the abuse should be reported to law enforcement. Depending on specific circumstances, physical and financial elder abusers will be prosecuted and punished.

4) How does one prove financial abuse?

Financial abuse is proven through evidence that money or property has been taken for the benefit of the person doing the taking. Evidence is developed through the abused person’s statements and the statements of witnesses, such as family members, friends and neighbors.

Financial documents such as bank statements, credit card bills and similar writings provide a paper trail of stolen funds. When financial abuse is first identified, a report should be made to law enforcement to begin laying the foundation for a criminal and/or civil case for financial elder abuse.

5) Who needs a conservatorship and what does it do?

Conservatorships are designed for adults who cannot care for themselves either physically, financially, or both. A conservatorship may be over the person or estate of the conservatee, or over both. A conservator is appointed by the court, to handle the necessary physical/financial arrangements of the conservatee.

The person serving as a conservator is held to the highest duty of care and honesty. Regular reports must be filed with the court and all reports are subject to audit. A conservator may be needed for a physically or mentally disabled adult. Grounds for conservatorship include lack of mental capacity, severe physical disability and mental illness.

6) Where & how does one file for a conservatorship?

Conservatorship petitions are filed in the Superior Court of the county where the conservatee lives. Different counties have different rules. It is possible to file the necessary conservatorship documents without an attorney, but the requirements are complex.

County courts usually have online resources that provide step-by-step instructions for obtaining conservatorship, along with the required forms. Some counties also offer free conservatorship workshops.

 7) What’s the difference? Conservatorship vs. Guardianship 

Conservatorship and guardianship are similar and may sometimes be interchangeable. Conservatorship protects the financial interests of physically or mentally incapacitated adults. Guardianship protects the physical well-being of an afflicted person who has no financial estate.

For example, an indigent person in a coma requires a guardian to make medical decisions. The same person in a coma, with assets, requires a conservator to handle the financial matters and make decisions regarding medical care. Typically, guardians do not handle financial affairs of estates valued more than $24,000. If an incapacitated person has assets worth more than $24,000, a conservatorship is required.

Guardians also protect the interests of legal minors:  those under age 18. A child cannot sign an enforceable contract or be a party in litigation unless a guardian is appointed.

8) What are some alternatives to a conservatorship?

If the potential conservatee is cooperative, matters can be handled informally. Information can be shared and the helper can be added to bank accounts to ease bill payment and handling accounts. If the person to be protected has minimal assets, a guardianship may be a solution. Another option is a power of attorney, although that cannot be executed by a person without the mental capacity to understand what they are doing, and the consequences of their actions. If the potential conservatee is not cooperative, and is in physical and/or financial danger, there is no alternative to a conservatorship.

 

Thanks for reading the full At Issue FAQ, we hope you had your questions answered! If you have a general question you want to see answered, email them to mharvey@stonedeanlaw.com.

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