Contractors: Accurately Project Payrolls & Subcontractor Costs
2 January 2009Problem General Liability Exclusions For Contractors
18 December 2008Green Building Insurance Challenges
18 December 2008Green Building Risk Management Obstacles
18 December 2008Still Need Workers Compensation Even If Insured Subcontractors Used?
10 December 2008The second most common myth regarding Workers Compensation for the construction industry is “I don’t need to carry Workers Compensation insurance since I only use insured subcontractors and do not have any direct employees”.
Like the other myths I will be discussing, this is not necessarily accurate.
Even if you have a current certificate of insurance on all of your subcontractors showing that they carry Workers Compensation, you are still not adequately protected. In fact, all it means is that at the time the certificate was issued they had insurance in place.
If the subcontractor’s insurance is canceled after the certificate is issued, it is very unlikely you will be notified. Neither the insurance agent nor the insurance company is legally obligated to notify you. The certificate merely states that they will “endeavor to” let you know the coverage is no longer in force. With the current state of the economy, it is becoming more and more common for the subcontractor to obtain insurance in order to have the certificate issued, and then letting the policy cancel for non-payment. The end result is that you will still end up with an uninsured subcontractor desite your efforts.
In conclusion, the best way to protect yourself and your assets is to purchase your own Workers Compensation policy and add the subcontractor classification codes on an “if any” payroll basis.
Are All Contractors Required To Carry Workers Compensation?
8 December 2008
The fact is that this is more complicated than it seems at first glance. If an employer is required to carry Workers’ Compensation but does not do so, the injured worker can file his Workers’ Compensation claim with the state’s Uninsured Employer’s Fund and will get paid the traditional benefits. The state’s Uninsured Employer’s Fund will then file a lien against the non-complying employer for the amount of the payout and can levy substantial fines against the employer in addition to the benefits.
Employment Practices Liability - Why Do I Need It?
25 November 2008Employers of all sizes are exposed to legal actions filed by current or former employees that allege discrimination, harassment, wrongful termination, and other charges. Employment Practices Liability Insurance (EPLI) covers lawsuits brought by employees (past, present or prospects), or governmental entities against the insured employer, alleging wrongful discharge, discrimination or certain types of harassment. EPL coverage is excluded under most General Liability policies but can be written on a stand-alone policy.
Claims can arise from employees being offended by cartoons, jokes, suggestive comments from supervisors and/or co-workers (sexual harassment); termination of an older employee or failure to promote an older employee (age discrimination); overbearing supervisors (hostile work environment); different rules for men and women in the same positions (sex discrimination); etc. As you can imagine, the potential for Employment Practices Liability claims are almost endless and usually very expensive.
I recently read about an EPL claim where the administrative assistant in an attorney’s office (I’ll call her Sue) was terminated after 15 years of employment. Sue’s supervisor (I’ll call her Helen) was much younger than Sue and was constantly criticizing Sue’s work and attitude. Sue had never received any negative reviews prior to Helen. After Helen conducted Sue’s annual review (which was negative and alleged poor work performance and attitude problems) Sue was terminated. Sue then filed a lawsuit against her employer for age discrimination (Sue is in her late 50’s) and hostile work environment (harassment by Helen), won her lawsuit and was awarded a settlement of over $1,000,000 plus court costs.
Many cases have involved female employees suing their employers for sex discrimination when a male co-worker (with the same or less credentials as the females) was promoted over them. Some of these claims have involved large, well known companies such as Wal-Mart and Publix Supermarket.
We also see quite a few claims for sexual harassment. The days of posting or passing around cartoons and jokes or commenting on a co-workers appearance and/or clothing and not getting into trouble are a thing of the past. It’s often difficult to draw the line between innocent fun and malicious abuse.
With today’s “I’ll sue you”, it’s not my fault”, politically correct mind set these claims are becoming more and more frequent.
I strongly urge every employer to sit down with their insurance agent and discuss this very valuable, but often overlooked, insurance protection!
What Does the Home Builders Association Do For Its Members?
21 November 2008As an agency that specializes in the insurance and business needs of the Residential Construction industry, I am asked almost daily by my insureds about WHY they should join their local Home Builders Association (HBA) - what are they getting for their money? With the economy in it’s current state, this question has become more and more frequent. All they see at first glance are the membership fee (which can range anywhere from $400 to $600 depending on the local association), monthly meetings and dinners. While the monthly meetings and dinners focus on education and networking there is much, much more going on.
Activities in Congress, the federal agencies, the courts, and state and local governments affect the housing industry and the National Association of Home Builders (NAHB) is actively involved on many fronts to make sure that housing remains a priority in the public policy arena.
Membership in your local HBA automatically makes you a member of the NAHB. The NAHB has a professional staff of more than 300 in Washington, DC. Its various divisions:
- Analyze policy issues
- Takes the industry’s story to the public through the media and other outlets
- Monitors and works toward improving the housing finance system
- Analyses and forecasts economic and consumer trends
- Educates, trains and disseminates information to members
- Represents the industry’s interests on Capital Hill
- Stives to ensure that housing remains a national priority when laws are made and policies are established
- Works with federal agencies on regulations affecting the housing industry in areas such as mortage finance, codes, energy and the environment
- Strives to shape decisions of the courts by becoming involved in litigation on land development, environmental and construction liability matters, such that laws and regulations may be interpreted favorably for the housing industry
Being a member of the HBA shows that you are a professional who is committed to the building industry.
To learn more about the benefits of being a member: http://www.nahb.org/generic.aspx?sectionID=101
To find the HBAs in your area, go the the National Association’s website: http://www.nahb.org/local_association_search_form.aspx
Rental Cars and Hired Car Physical Damage
6 November 2008Dave, a client of mine, called the other day to let me know he was going on a business trip, and asked about whether or not he should buy the rental car company’s Physical Damage Waiver, or just add Hired Car Physical Damage to his business auto policy. I explained to Dave that while the Hired Car Physical Damage would provide coverage if the rental car sustained damage, it would not address three key provisions of the rental car contract - replace cost valuation, loss of use and diminution of value.
The commercial auto policy uses the Actual Cash Value method if a car is totaled, which is cost new less depreciation. This can be a significant difference from the replacement cost of the vehicle.
With regard to loss of use, I’ve never seen an insurance company pay for this as there is no provision in the business automobile policy that would grant such coverage. Loss of use means the rental car company would have to have every other car they have in that category rented in order to suffer a monetary loss by not being able to rent the vehicle damaged in the collision.
With regard to diminution of value, most rental car contracts want to recoup the loss they will incur upon sale of the rental car when it is time to remove it from the fleet. The fact that the car was involved in a crash must be disclosed to the buyer, and the sales price will be reduced as a result.
Due to the above uncertainties, the safest course of action is to always purchase the Physical Damage Waiver from the rental car company.
