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Prevent Injuries and Save on Contractor Insurance Costs

Posted by David Ross on Sun, Aug 05, 2018

Prevent Injuries Through Safety, Lower Your Contractor Insurance Costs in Pennsylvania and Elsewhere.We talk a lot about safety on this blog, but the truth is that reducing and preventing the number of injuries in the workplace, is one of the best ways to reduce your workers’ compensation and liability insurance costs. These costs tend to be higher than average in the construction industry due to its dangerous nature, so we’re going to keep talking about safety.

One of the best ways to prevent injuries is to be aware of where and how most accidents occur. Here are the five top events or exposures that lead to injury on construction worksites according to ConstructConnect, along with some tips to avoid them.

The Top 5 Injury Factors on Construction Worksites

#1 - Contact with Objects

Construction sites are filled with heavy equipment and dangerous tools, so it’s no surprise that in 2016, there were 29,160 cases of injuries caused by contact with objects. Being struck by objects or equipment caused the most injuries. Most of those were caused by handheld equipment or objects slipping or being swung by the injured employee. 5,220 accidents were caused by a falling objects or equipment hitting workers.

Injuries also occurred when workers hit an object or a piece of equipment. Some injuries occurred by hitting something stationery such as stepping on an object, but more happened when workers hit a moving object such as a moving part of the machinery.

There were also 3,260 injuries caused by a worker being caught in or compressed by equipment or objects.

Safety Tips:

  • Always wear a hardhat onsite
  • Avoid areas where work is being done overhead
  • Use lanyards or netting to avoid dropping tools or materials to a lower level 

#2 – Slips, Trips and Falls

In 2016, there were 24,700 reported cases of construction workers being injured by slips, trips, or falls. The majority of those injuries were caused by falling to a lower level.

Safety Tips:

  • Provide fall protection for anyone working up high
  • Keep areas where people walk clear
  • Inspect personal arrest systems to make sure that everything is in good working order

#3 – Overexertion

Construction is hard work, so it’s no surprise that in 2016, 21,150 overexertion injuries were reported. These injuries were caused by lifting or lowering objects; pulling, pushing, or turning; holding, carrying, or wielding, and other things like bending, twisting climbing, reaching, etc.

Safety Tips:

  • When lifting an object, bend at your knees and use your legs
  • Wear a back brace when lifting a heavy object
  • Take regular breaks when feeling fatigued or doing something that requires repetitive motion

#4 – Transportation Incidents

U.S. roads can be dangerous. In 2016, 3,470 injuries reported in the construction industry were the result of transportation incidents. This includes vehicle collisions and pedestrians being struck and injured by vehicles in both work zones and off the road – like on construction sites.

Safety Tips:

  • Obey traffic rules when driving
  • Be aware of what’s going on around you
  • Avoid blind spots with mirrors and visual aid devices such as backup alarms and lights
  • Control traffic using barricades and signs to alert drivers of work zones, shifting traffic patterns, etc.
  • Wear proper safety equipment including hard hats, highly visible clothing, steel-toed boots, etc.

#5 - Exposure to Harmful Environments or Substances

In 2016, there were 1,470 injuries caused by exposure to extreme temperatures and 420 injuries caused by exposure to electricity. Electrical injuries can include electrocution, electrical shock, burns, and falls, and low voltage does NOT mean low hazard.

Safety Tips:

  • In hot weather, keep hydrated, try to schedule work during the cooler time of day, bring shade, and keep an eye on each other
  • In frigid weather, provide a heated break area; ensure that workers dress appropriately with layers of loose-fitting, insulated clothing; gradually introduce workers to the cold; know the symptoms of hypothermia, frostbite, and trench foot; and monitor each other
  • Check electrical cords and wires before using
  • Wear personal protection when handling electrical materials

Understanding Leads to Prevention

Understanding your biggest risks for injury and how to prevent them before they happen are your first steps to minimizing injuries in a notoriously dangerous industry. Providing a safe work environment is good for you and your employees. Plus, it provides cost savings on insurance and other costs of workplace injuries such as missed days of work, training new employees, lower employee morale, etc.

 

We'll Help You Save on Every Kind of Commercial Insurance!

To learn more ways to save on contractor insurance, workers comp insurance and all types of commercial insurance, simply call American Insuring Group at (800) 947-1270 or (610) 775-3848 or click to contact us online.

Our independent agents aggressively shop the market to find you the very best deal on quality insurance. Contact us today to start saving in Pennsylvania and beyond!

Tags: Workers Compensation Insurance, Contractor Insurance, Commercial Liability Insurance, workers comp costs, Contractor Safety Management

Contractor Insurance and Managing Subcontractor Risk

Posted by David Ross on Sun, Jul 15, 2018

Contractor Risk Management is key to managing subcontractor risks. A key factor is to obtain the right Contractor Insurance.Risk management is part of any successful business, and it is especially true in an industry fraught with as many dangers as construction. Accidents that cause injury, damage, or death occur on worksites across the country every day.

Preventing those injuries is your first line of defense. That might include actions like creating and enforcing a safety management program, providing proper safety training, offering protective gear when appropriate, etc.

 

Contractor Insurance is Key to Managing Risk

Unfortunately, accidents can still occur. That’s where contractor's insurance comes in. The right coverage will protect your employees, your customers, and your business.

You probably know all this, but what happens when a subcontractor that you’ve hired is injured or causes an injury or damage? Hiring subcontractors is a prevalent practice in the construction industry because the more people you have working on a job, the more you can get done, right?

We think it’s pretty safe to say that’s true, but subcontractors also add another level of risk, which makes it essential to understand the role contractor insurance plays with subcontractors. Here’s some info that may help.

 

Subcontractor Risk Considerations 

#1 - Employee vs. Subcontractor

With an employee, you are required to pay Social Security and Medicare taxes, pay unemployment tax on wages, provide workers’ compensation in many cases, etc. The headaches and expenses of an employee can quickly add up.

But with subcontractors, you don’t have to pay the same taxes or provide WC insurance. Therefore, some contractors misclassify employees as subcontractors. Sometimes it’s even done by mistake because there are so many variables that determine whether or not someone is an employee.

Even the IRS admits there is no simple formula to determine if a worker is an employee or an independent contractor, and factors which are relevant in one situation may not be applicable in another. “The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination,” according to the IRS

 

Misclassifying an employee as a subcontractor can end up costing you more in fines and penalties than you would have paid if they were classified correctly. This makes it imperative that you make the right classifications. Here are some tips to do that.

Determine the Business Relationship 

First, you need to determine the business relationship that exists between you and the person performing the services including your degree of control over them and their independence. The IRS provides these three categories to provide evidence of that control or independence. 

  • Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  • Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  • Type of Relationship: Are there written contracts or employee type benefits (e., pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

#2 - Get Subcontractor Insurance

If you have determined that you are dealing with a subcontractor and not an employee, you do not need to worry about workers’ compensation insurance; however, you still face risks. Don’t assume that your contractor’s liability insurance will cover you in the event that a subcontractor’s work causes damage or injury. Damages caused by individuals other than your employees are excluded in many general liability policies.

Your first step is to make sure that all of your subcontractors have their own general liability coverage that is adequate to cover any injuries or damage. Have them to provide a certificate of insurance as proof. The International Risk Management Institute (IRMI) suggests the following minimum general liability insurance limits for subcontractors:

  • $1,000,000 each occurrence (the combined single limit for bodily injury and property damage);
  • $1,000,000 for personal and advertising injury liability;
  • $1,000,000 aggregate on products and completed operations;
  • $2,000,000 general aggregate.

#3 - Get Listed as an Additional Insured 

You should also make sure that your subcontractors include you as an additional insured on their commercial insurance policy to protect you against their negligence.

 

Be Prepared - Contact Us Today! 

Get affordable contractor insurance throughout PA, including Philadelphia, Reading, Lancaster, Allentown, Pittsburgh, Erie, Harrisburg and beyond.Accidents happen, but the right insurance will help protect your business. For more information about contractor insurance and any time of business insurance you may need, contact American Insuring Group at (800) 947-1270 or (610) 775-3848 or contact us online.

You can rest assured that we'll find you affordable contractor insurance at a great price because our independent agents are free to scour the market and to compare policies among lots of competing providers.

Tags: Builders Insurance, Contractor Insurance

Heavy Equipment Safety and Contractor Insurance

Posted by David Ross on Sun, Jun 17, 2018

Tips for safely dealing with heavy equipment in the construction industry, resulting in lower contractor and commercial insurance rates in PA, including Philadelphia, Reading, Pittsburgh, Lehigh Valley, Erie and beyond. Whenever the Bureau of Labor Statistics (BLS) releases its list of the deadliest jobs in America, some type of construction work is on that list.

According to the BLS, there were 991 fatal work injuries in construction in 2016. They listed first-line supervisors of construction trades and extraction workers as the ninth deadliest job with 134 fatal injuries and a fatal injury rate of 18 per 100,000 workers.

Roofers were number four (behind only aircraft pilots, fishers, and logging workers) with 101 fatal injuries and a fatal injury rate of 48.6 fatal injuries per 100,000 workers.

It's Wise to be Properly Insured 

No one would argue that construction is a dangerous job, and one of the elements that make it dangerous is the use of heavy equipment. According to the Center for Construction and Research Training (CPWR), vehicles and heavy mobile equipment caused 7,681 deaths from 1992 to 2010 with about 404 deaths annually.

Plus, even when vehicles and equipment are involved in an accident, they are often not listed as the cause of death. Given these facts, it's clear that having the proper contractor insurance is key for those in the construction industry. 

Types of Dangerous Heavy Equipment

Cranes have been the most dangerous heavy equipment machinery used in the construction industry for the past two decades. CPWR found that from 1992 through 2006, 632 of all the construction fatalities reported were caused by cranes. In 2008, crane collapses caused 25 deaths and 59 injuries, contact with overhead power lines resulted in ten fatalities and eight injuries. Contact with crane load caused six deaths and ten injuries.

But cranes aren’t the only dangerous type of heavy equipment. Here is a list of the top five most dangerous construction equipment:

  1. Cranes
  2. Bulldozers
  3. Dump trucks
  4. Backhoes
  5. Excavators

Heavy Equipment Safety

Yes, experience does go a long way to ensure the safety of heavy equipment operators and those working around them. The danger comes when someone who has been working on the job for a long time is lured into a false sense of security and lets their guard down.

Distractions Can Cause Accidents

Today, one of the most common dangers may be simple distractions – both external and internal - that can affect veteran and novice heavy equipment operators alike, and many of these distractions can be avoided.

Before cell phones became so ubiquitous, many heavy equipment operators listened to radios. This was distracting enough (and could keep the operator from hearing if something is wrong with the machinery or someone is shouting at them), but cell phones have taken that distraction to a whole new level. 

Today’s cell phones allow operators to listen to music, text, watch videos, play games, check social media, search for information online and make phone calls. Some operators use earbuds to block out external noises. All of this can lead to distraction and danger.

The Occupational Safety and Health Administration (OSHA) has addressed the use of cell phones in cranes. OSHA states; “The [crane or derrick] operator must not engage in any practice or activity that diverts his/her attention while actually engaged in operating the equipment, such as the use of cellular phones (other than when used for signal communications).”

While OSHA doesn’t address this with other types of heavy equipment, it’s a smart safety measure to employ across the board to both operators and those working around heavy equipment.

Do You Have a Safety Policy? 

The best way to avoid distractions of any kind and keep your workers safe is to have a safety policy in place that forbids the use of cell phones while operating or working around heavy equipment, educate workers on that policy, and address any issues as soon as they arise.

Protect Your Business with the Right Type of Insurance

Get the right insurance for the construction industryUnfortunately, accidents still happen, but the right insurance can help protect you and your employees if an injury does occur. Workers Compensation Insurance, which is often a state mandate, can provide wage replacement and medical benefits to employees injured on the job.

Commercial Liability Insurance can help protect your business from lawsuits. Various types of insurance can be combined to create a custom Contractor Insurance policy as well. 

To learn more about these and other types of commercial insurance, call American Insuring Group at (800) 947-1270 or (610) 775-3848 or contact us online.

 

Tags: Contractor Insurance, Construction Equipment Insurance, Heavy Equipment Insurance, Commercial Insurance

5 Tips to Lower your Contractor Insurance Cost

Posted by David Ross on Sun, Apr 29, 2018

Save on Contractor Insurance by following these tipsHaving the protection offered by contractor’s Insurance just makes good business sense. Without it, one nasty lawsuit could put you out of business and your employees out of work. And don’t forget: some state and federal laws require certain types of insurance.

But finding the right contractor’s insurance is a balancing act. You don’t want to pay for more coverage than you need to reasonably protect yourself, your employees, and your business. But then again, you don’t want to find yourself underinsured if something does happen. Remember Goldilocks? You want it "just right".

Using an insurance broker who is familiar with contractors’ needs and risks is the best way to ensure that you have the right amount of coverage at the best possible price.

 

Here are five tips to help minimize your contractor insurance premiums without giving up the protection you need

 

#1) Review Your Policies Regularly

Things change. You may have purchased a new piece of equipment, hired your first employee, or sold a vehicle. You want to make sure that all of your current assets are adequately protected. When you do a review, you should consider the different types of insurance available to contractors and determine if any of them need to be added or deleted from your current policy.

Here are the five insurances you should be familiar with as a contractor:

  • Commercial General Liability (CGL) – Construction is one of the most dangerous industries, making CGL Insurance an essential part of your insurance portfolio. It protects you and your company if someone gets hurt on your property or if you or an employee causes property damage or injury on a job site.

  • Commercial Auto – If you have started using your personal vehicle to drive back and forth to project sites or to transport tools or equipment or if you’ve begun allowing employees to drive your car or truck, personal auto insurance does not provide enough coverage. You may need to add Commercial Auto Insurance.

  • Workers’ Compensation (WC) – If you have employees, you may be required by law to have Workers’ Compensation Insurance. WC is meant to ensure that your employees who are disabled due to a work-related injury are compensated for lost wages and receive the necessary medical treatment. To learn more about WC requirements in Pennsylvania, go to the Pennsylvania Department of Labor & Industry.

  • Inland Marine Insurance (Aka Tools and Equipment Insurance) – What’s more important than your tools of the trade? Inland Marine Insurance is designed to protect your property when it is in transit.

  • Builder’s Risk Insurance - Builders risk insurance is designed to protect your equipment in the event of losses caused by theft and other perils that can occur.

#2) Check your deductibles

Increasing your insurance deductible (the amount you need to pay when you file a claim) is one way to decrease your premiums (what you pay for your insurance coverage). If you have enough money in savings to comfortably cover a higher deductible, this may be a good choice for you. 

But be careful. The purpose of insurance is to protect you financially if something happens – an accident, theft, lawsuit, etc. If you don’t have the financial resources to cover the costs of your deductible, then your insurance policy isn’t providing the financial protection you need and could expose you to risks that affect your business – in the worst case, shutting it down.

#3) Bundle your insurance policies

Bundling is kind of like economies of scale. Sometimes if you purchase more than one insurance policy with the same provider, it can be less expensive per policy. Ask your insurance agent if bundling your policies would save you money.

#4) Know when to make a claim (and when not to)

The fact is that the number of claims you submit can affect your insurance premiums, so sometimes it makes sense to pay for certain losses out of pocket. If making a small claim will increase your insurance premiums, it may be less expensive in the long run to pay the minor loss out of pocket.

#5) Risk Management

If you can determine potential hazards and how to avoid them and implement a risk management plan, you will probably have fewer losses and injuries, which means you’ll have fewer claims. Fewer claims usually mean lower premiums. Plus, there are many intangible benefits in keeping your employees and your equipment safe – higher employee morale, higher productivity, less downtime, etc.

 

Don't Overpay for Contractor Insurance!

Contact us to save on Contractor Insurance. Serving Philadelphia, Berks County, Lehigh Valley, PA and beyond.As an insurance broker, American Insuring Group specializes in contractors insurance. We can ensure that you have insurance required by law, help you determine risks specific to your industry, and create the best insurance bundle to protect your business, all at a great price. Even Goldilocks would find our insurance to be "just right"!

To learn how we can help save you money on any type of commercial insurance coverage, call us at (800) 947-1270 or (610) 775-3848, or contact us online

Tags: Contractor Insurance, Commercial Insurance

The Construction Boom and Builders Risk Insurance Rates

Posted by David Ross on Tue, Apr 03, 2018

Tips to lower your builder's risk insurance costs in PAThe construction industry is booming – both new construction and remodeling - and it looks as if that trend will continue. Construction has a 4.5% projected growth rate over the next five years.

In fact, construction is expected to be one of the fastest growing industries into 2020, according to the Bureau of Labor Statistics. Real output in the construction industry is expected to reach $1.2 trillion by 2020.


This is excellent news if you’re in the business of building or remodeling houses. It translates into big opportunities for builders. Unfortunately, it can also bring higher risk, making now the perfect time to let the experienced independent agents at American Insuring Group review your Builders Risk Insurance to make sure you have the right coverage to adequately protect your business.

 

What is Builders Risk Insurance?

Builders Risk Insurance is a type of property insurance unique to the construction industry. It covers structures or building materials during construction. It provides coverage for damage from events such as fire, wind, theft, hail, explosion, lightning, and vandalism. Builders Risk Insurance is typically written for three, six, or twelve month periods, and can be extended (although usually only once) if the project takes longer than anticipated.

This insurance pays for damages up to the coverage limit, which should be based on the total completed value of the structure including not only materials but also labor costs. The best way to determine that value is to look at the construction budget.

Standard Exclusions

Standard exclusions on builders risk insurance include earthquake, employee theft, water damage, weather damage to property in the open, war, government action, contract penalties, voluntary parting, and mechanical breakdown. Another typical exclusion results from faulty design, planning, workmanship, and materials, which can be covered by Professional Liability Insurance.

Here are a few more things that you should know about Builders Risk Insurance:

  • It doesn’t cover the property of others
  • Subcontractors must have their own insurance
  • Tools and equipment are not included
  • Accidents on the job site are not covered
  • Once the building is completed or occupied, the coverage usually ends
  • It doesn’t cover professional liability

Does the Booming Industry Mean Higher Builders Risk Insurance Premiums?

Historically, Builders Risk Insurance has been safe from dramatic increases. Increases tend to be small and incremental. And experts don’t foresee that changing even with the increase in construction projects. However, 2017 was the costliest year ever for weather and climate disasters in the U.S. totaling $306 billion. The U.S. was hit by 16 weather events that caused more than a billion dollars in damage. Previously, 2005 held the record at $215 billion.

Most experts agree that the cost of this damage will only slightly increase builders risk insurance premiums particularly with frame construction and construction in areas that are prone to catastrophes.

How to make Builders Risk Insurance Work for you in this lucrative market

  • Cover Your Entire Project - Many builders purchase builders risk insurance because their lending institution requires it, so they only cover the bare minimum: labor and materials. These are the parts of the project the banks have an interest in, but you need to protect your interests as well, which include overhead and profit.

  • Spell it out with a detailed contract – Make it very clear in the contract who (contractor, owner, designer) is responsible for what if something goes wrong. The American Institute of Architects offers comprehensive contract templates.

  • Don’t be Naïve – Whether your company is big or small, you do face risk, and if you don’t have a lot of cash flow even a small amount of damage can be catastrophic.

  • Hire good subcontractors – Verify that all of your subcontractors have certificates of insurance with adequate limits. You may also want to secure a waiver of subrogation and list subcontractors as additional insured for both operations and completed operations for the project. This way, if there is a lawsuit, the subcontractor’s insurance will defend the contractor.


Contact Us to Review Your Business Insurance Policies 

Now – while business is booming – is the perfect time to review your business insurance policies!

The agents at American Insuring Group specialize in Contractors Insurance and finding ways to lower your risk while reducing your costs.

Give us a call at (800) 947-1270 or (610) 775-3848 or contact us online. We’ll be happy to review your policy to ensure that you have adequate coverage to protect your business.

Tags: Contractor Insurance, Commercial Liability Insurance, Business Insurance, Builders Risk Insurance

Critical Gap in Contractor Insurance Filled by CPPI

Posted by David Ross on Sun, Feb 11, 2018

CPPI Insurance Protection Tips for Contractors in PA, from Philadelphia to Pittsburgh and points in between.Contractors, how confident are you in your contractor insurance coverage? Did you know that there might be a potentially costly gap in your Commercial General Liability Insurance policy (CGL) that you may not be aware of?

CGL is a standard insurance policy that protects you against liability claims for bodily injury and property damage related to your business activities.

It helps cover legal costs such as court costs, attorney fees, and police report costs in the event of a lawsuit filed by an employee, contractor, client, vendor, etc. and judgments or settlements that result in the lawsuit.

Many banks and clients require this coverage, which makes CGL one of a contractor’s best friends.

Errors in Judgment are Usually NOT Covered by CGL Insurance

But with progressively more complicated projects and blurred lines between professional services and construction duties and responsibilities, financial loss due to errors in judgment are increasing and are usually not covered by CGL. There is also an exclusion in most CGL policies - the “absolute pollution exclusion” - that can leave a gap in your coverage and expose your business to risk.

 

Pollution & Professional Insurance (CPPI) – 4 Key Coverages

Contractors pollution and professional insurance (Aka contractors protective professional indemnity coverage or CPPI) addresses most of the pollution and professional liability coverage gaps in a CGL with four key coverages.

#1) Professional liability coverage

On a traditional project, an architect or engineer provides the design services, and a contractor implements the design. However, as projects continue to increase in complexity, the line of responsibility between the design firm and contractor are becoming blurred, and contractors are taking on nontraditional risks that a CGL policy may not cover.

Professional liability coverage extends beyond the traditional understanding of “professional services” to include engineering work, design work, construction management operations, and construction process services such as shoring and dewatering. 

#2) Protective liability coverage

This extends coverage when you are held responsible for the actions or omissions of another person. Protective liability coverage provides excess coverage over the contracted design professional’s policy if its policy limits are insufficient, protects you if the design professional’s coverage is no longer available, and acts as a difference-in-condition coverage if the CPPI is broader than the underlying professional policy.

#3) Mitigation expense

It’s usually less expensive to fix a problem discovered during construction right away rather than wait until after the project is completed. This coverage – also called “mistake coverage” - allows you to fix a problem before it becomes a claim. 

#4) Pollution liability

With the increased focus on the environment and a growing list of pollution sources, contractors are more exposed to pollution and environmental losses than ever. Even if you aren’t engaged in pollution remediation, you probably work with and dispose of fuels, solvents, and other chemical wastes.

Most CGL policies offer limited coverage for bodily injury and property damage caused by pollutants, but the absolute pollution exclusion (and similar exclusions) included in most CGLs and auto policies leave contractors open to liability for damages such as the incidental transportation of waste or the development of contaminated sites. CPPI covers claims such as damage to soil, water, air, animal life, and plant life caused by a pollutant release; the cost to clean up, treat and restore damaged resources as a result of a pollutant release; and pollution losses related to the transportation of a pollutant.

If You’re a Contractor You Likely Need CPPI Protection!

A broader understanding of what “professional services” are and the various exclusions in most CGL policies mean that almost every contractor should have CPPI coverage, so if you're a contractor, don't take chances!

Contact Us for the Right Contractor Insurance Protection

Contact us for CPPI insurance in Philadelphia, Pittsburgh, Erie, Allentown, Lancaster, Reading, Harriburg, PA and surrounding states.Call our experienced independent agents at American Insuring Group at (800) 947-1270 or (610) 775-3848 or click here to connect with them online to learn if there are any potentially costly gaps in your CGL policy.

You can rest assured that they’ll find you the right coverage at a great price!

Tags: Contractor Insurance, Commercial Insurance, Commercial General Liability Insurance, CPPI Insurance

Contractor Safety Management in 5 Easy Steps

Posted by David Ross on Sun, Dec 17, 2017

Contractor Safety Management and Workers Comp Insurance Tips for Reading, Philadelphia, Allentown, Pittsburgh, Erie, Lancaster, York, PA and beyond.In 2015, 937 construction workers were killed according to the Bureau of Labor Statistics.

That’s 21.4 percent of all worker fatalities – the most deaths of any industry sector. Safety and Health Magazine puts those numbers into perspective: “Every week in 2015, 18 construction workers went to work and did not return home.”

Good Safety Management Goes Beyond Workers Comp & Contractor Insurance

As a contractor, you should be committed to creating and maintaining safe construction sites for the protection of your workers and your business. A good safety management program helps strengthen your reputation, attract the best employees, allow your workers to be more productive, comply with OSHA and local regulations, reduce liability exposure, keep your workers compensation insurance and contractor insurance costs down, and – of course – keep your employees safe.

Safety for Contractors and Subcontractors 

Hopefully, you have and enforce a safety management program for your employees, but what about contractors and subcontractors? Your contractors could bring workers to your job site who don’t have the training or certifications that you require of your employees. They may not understand site-specific issues or their responsibilities. And if an injury does occur, it could become your responsibility.

While it may take a little more effort, a good Contractor Safety Management program can prevent many safety issues created by contractors and may be even more critical if the Protecting America’s Workers Act – an amendment to the Occupational Safety and Health Act of 1970 – is passed.

The Protecting America’s Workers Act  

Part of this Act includes requirements relating to an “employer's duty to furnish a place of employment free from recognized hazards causing or likely to cause death or serious physical harm that the employer creates or controls or in which the employer exposes any individual (not just an employer's employee) performing work there” and “site-controlling employer's duty to keep a site log for recordable injuries and illnesses of all employees, including employees of the site-controlling employer or others (including independent contractors) performing work there.” 

 

Here is a 5-Step Process for Creating an Effective Contractor Safety Management Plan:

  1. Prequalification – Any potential contractors should complete a prequalification process that includes safety requirements such as basic EHS (Environments, Health, and Safety) metrics like their recordable incident rate and days away from work, the quality of their services and their technical qualifications and competencies. Look at the contractor’s internal training programs and ask if they use safety as criteria for employment.

  2. Planning – Take an EHS assessment of every job site identifying specific hazards and what additional requirements might be needed from a sub-contractor.

  3. Orientation and Training – Inadequate training is often the cause of contractor fatalities. Even if the organizations you’re hiring provide safety training (which they probably do if you’ve considered their safety record), you should provide site-specific training that addresses hazards, emergency procedures, and safety requirements.

  4. Monitoring and assessment – Monitor the progress of work to identify any safety issues and address those issues promptly. Provide timely feedback on the contractor’s safety performance early on.

  5. Performance evaluation – Evaluate and document the contractor’s performance including if the work was done safely, if it was completed on time, and if the quality is acceptable. This can make it easier to choose contractors for future projects.

Taking these five steps, aligning your safety strategies with your contractors, and creating a culture of safety across all of the workers on your work site will create a safer environment for everyone on your job site, help you can comply with any future regulations, help protect your business, and save you money.

 

Protect Yourself With Workers Compensation & Contractor Insurance

Regardless of your best efforts to create the ultimate safety management plan, accidents can happen. At American Insuring Group our independent insurance agents will help you get the precise level of commercial insurance coverage you need, including Workers Comp Insurance and Contractor Insurance at the best possible price.

So contact us online or call today at (800) 947-1270 or (610) 775-3848.

Tags: Contractor Insurance, Contractor Safety Management

Contractual Risk Transfer vs. Contractor Insurance

Posted by David Ross on Sun, Aug 27, 2017

Contractor Insurance Vs.Contractual Risk Transfer. Contact us for advice and for quality PA Contractor Insurance.If you own a construction company, the chances are good that you subcontract some or all of the work to another party. You can (and should) do your due diligence to ensure that any subcontractor you hire has a reputation for doing a good job safely. However, it’s impossible to foresee all of the potential financial and operational risks that may arise with a project, particularly with a third-party. 

General Contractors Held Liable

There is always the possibility of an injury, property damage, a delay, or a construction defect as a direct result of a third-party’s services or products. Normally, it’s the general contractor who is held liable for the actions of the parties that they subcontract.

Shifting Risk Through CRT - Contractual Risk Transfer

Since you can’t stand over, watch, and control every action your subcontractor makes, it’s important to protect your business from liability issues that may be caused by these subcontractors. Contractual risk transfer (CRT) can help mitigate some liability risks as it shifts some or all of the responsibility for claims, losses, and damages to another party.

CRT is not contractor insurance. Instead, it is a non-insurance contract that identifies critical exposures and clearly states the roles, responsibilities, and requirements (including insurance) of everyone involved in a construction project before the project begins. It is designed to place all or part of the financial risk on the party that is closest and most able to control the activity that may cause an injury, damage, delay or defect, and it indemnifies and holds certain parties harmless for specific actions, inactions, injuries, or damages.

Typical components of a CRT include the following:

  1. A written contract
  2. An indemnification or hold harmless clause
  3. Insurance specifications
  4. A certificate of insurance
  5. An additional insured endorsement
  6. Record retention guidelines

Contractual Risk Transfer Best Practices

Here are five best practices the insurance industry website PropertyCasualty360.com offers to build a more effective contractual risk transfer program:

  1. Create standard contractual risk terms that are regularly reviewed and updated as needed.
  2. Train procurement professionals, so they understand standardized terms and why they’re important to risk management.
  3. Require authorization to bend the terms of the contract because occasionally changes may be needed.
  4. Establish guidelines for when to involve risk management. For example, when a contract exceeds a certain dollar amount or falls outside the scope of your normal activities.
  5. Enforce collection and review of certificates of insurance.

 

Contractual Risk Pitfalls

Here are three common CTR pitfalls from Construction Executive that you should watch out for:

  1. Accepting Certificates of Insurance (COI) at face value. Dishonest contractors have been known to provide fraudulent COIs, cancel the policy after presenting the COI, or purchase highly restrictive policies.
  2. An additional insured endorsement will provide you with a written notification if a policy is cancelled; however, the pitfalls associated with an additional insured endorsement include a) if you don’t have a written contract to go along with it, it may not be enforceable, b) if the underlying policy doesn’t cover a claim because of an exclusion, the endorsement is worthless, and c) even with an additional insured endorsement, the subcontractor’s limits may not be adequate to cover the full cost of a loss.
  3. A written contract may not be enforced in a court of law especially if there is no COI with an additional insured endorsement.

In Summary 

CRT programs can be quite complicated, but since they help limit your liability, protect your assets and your bottom line, and control your insurance costs, they are well worth the effort. It’s always a good idea to use an attorney and insurance advisor when drafting a contract, and whenever you enter into a new contract, you should review it carefully and make sure you understand the risk that you are accepting.

Contact Our Experts To Protect Your Business

Our independent insurance agents will save you money on contractor insurance in Philadelphia, Harrisburg, Reading, Allentown, Lehigh Valley, Pittsburgh, Erie, PA and beyond.To learn more about protecting your business, contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848. Our independent insurance experts will inform you of the risks you may be exposed to, and how to protect yourself with the proper contractor insurance coverage.

Unlike our "single brand" competitors, our independent agents are free to shop and compare rates and coverages among many competing insurance carriers to ensure you get the best price on quality insurance protection. Contact us today!

Tags: Contractor Insurance, Business Insurance, Contractual Risk Transfer

Commercial Insurance and Faulty Workmanship

Posted by David Ross on Sun, Aug 13, 2017

You need the right Commercial General LIability Insurance to protect you against lawsuits. This applies to Contractors Insurance and other types of business in Pennsylvania and beyond.We live in a litigious society, and no matter how careful you are or how small your business is, you may find yourself at the wrong end of a lawsuit. Every year more than 100 million lawsuits are filed in the U.S. every year, according to Rocket Lawyer.

Thirteen percent of small business owners have faced a lawsuit, according to Hiscox. And according to courtstatistics.org, the median cost for a business lawsuit starts at $54,000. “Nearly half of these cases resulted in negative consequences, including financial impact, loss of customers or damaged reputations,” according to Thrive.

Commercial General Liability Insurance

Commercial General Liability Insurance (CGL) is essential if you want to protect your business from lawsuits. CGL covers your business in the event of a liability claim for bodily injury and property damage and from advertising and personal injury liability caused by your services, business operations or employees. It usually covers the cost of your legal defense and any damages if you are found liable (up to your policies limits).

The Insurance Information Institute offers these examples of circumstances that are generally covered by a CGL policy:

  • A customer visiting your business trips on a loose floor tile and is injured.
  • An employee forgets to turn off the water and causes significant damage to a customer’s property.
  • Someone files a class action lawsuit against your business, alleging advertisements constituted misleading information. 

Faulty Workmanship and CGL

We are all human. Sometimes things go wrong: an improper installation or a defective product. What if you install a water heater incorrectly, which causes an explosion with significant damage to your customer’s property, and they sue you for the damages? Will your CGL policy cover you?

Generally, the answer is yes. The CGL policy is designed to pay for property damage to a customer's property, even if the contractor installed it improperly.  It is not designed to pay the contractor to rip it out and replace it in the proper way.  That would be the Workmanship exclusion, but damage from a water heater explosion would typically be covered.

Every policy is unique, but here are two common exclusions in CGL policies that may result in a claim being denied:

  • “Your Work” Exclusion – This exclusion is meant to prevent someone from using a CGL policy as a guarantee of their work. It usually excludes coverage on property damage that is caused by faulty or defective workmanship
  • “Your Product” Exclusion – This exclusion prevents coverage for damage to an insured’s product in the event of a defect in that product.

These are just two of the exclusions that may be included in your CGL policy. There are many other exclusions that can result in your claim being denied. Understanding these exclusions and knowing your options will help you protect your business. For example, there is optional insurance that can be purchased that may cover you in the event of faulty workmanship - Contractors Faulty Workmanship Coverage or an Errors and Omissions Insurance Policy.

 

Get Help - Contact the Commercial Insurance Experts!

CGL policies can be complex, so it’s always a good idea to speak with an experienced and knowledgeable independent insurance agent. At American Insuring Group, we pride ourselves on answering questions you may not have thought to ask and making sure you have the right insurance for your business, all at a great price.

Call American Insuring Group at (800) 947-1270 or (610) 775-3848 or contact us online to learn about Commercial General Liability Insurance of all kinds, including Contractos Faulty Workmanship Coverage and Errors and Ommissions Insurance.

Tags: Contractor Insurance, Commercial Liability Insurance, Commercial Insurance, Business Insurance, Commercial General Liability Insurance, CGL, Errors and Omissions Insurance

Contractor Insurance and Mold Remediation Services

Posted by David Ross on Tue, Sep 27, 2016

Contact us to add mold remediation coverage to your Contractor Insurance policy. Serving Reading, Philadelphia, Lancaster, Allentown, Lehigh Valley, Harrisburg, Pittsburgh, Erie, PA and beyond with reliable business insurance for over 25 years.Attention: restoration contractors! You may have lucrative opportunities from an unlikely source—mold. Yes, the fungus that grows in moisture-laden areas of many old homes has created a demand for professional mold remediation services.  Done right, you can grow your mold remediation business while controlling your contractors insurance rates. 

Mold is one problem that homeowners cannot just ignore. Not only does it look disgusting, but it can also weaken the walls, ceilings, floor, and foundation of a house. And it presents a substantial risk to the health and safety of its inhabitants. 

Income vs. Risk

But along with the possibility of additional income, mold has created new risks for businesses that work on water damage restoration, mold removal, or construction. By implementing a mold risk management strategy, however, contractors can participate in these business openings without endangering their company with uninsured liability.

A recent history of mold and insurance

Around 2001, the number of insurance claims for mold damages soared, as did the income for restoration contractors. Unfortunately, the insurance industry had not expected this rush of claims, and they had not priced them into their policies. In response, insurance companies were compelled to begin issuing mold exclusions and limitations. While these exclusions are not standardized, almost every type of property and liability insurance policy has them.

Liability exposure increases for contractors

Without contractors insurance to help resolve their mold problems, some property owners tackled the mold themselves (bad idea!) or sought out mold remediation experts. But these experts are not the only contractors who come up against mold on a regular basis. Restoration contractors, plumbers, and electricians also encounter mold on their job sites. Even though they have not been hired to eliminate a mold issue, these contractors should always inform the property owner when they discover mold. So, why should this put any contractor at risk?

Disgruntled homeowners often blame their contractor

In an ironic twist, many homeowners began filing lawsuits against the contractors who pointed out the mold to them. This shoot-the-messenger mentality put contractors at risk of liability. The Commercial General Liability Insurance (CGL) policy, usually a protective tool for a contractor, has the same pollution exclusion clause as the homeowner’s policy. This exclusion states that the insurance does not cover any bodily or property harm caused by the escape, dispersal, or release of pollutants.

Is mold a pollutant? There is no universal agreement on this from the courts. Some have found the policies to be vague in their definition of pollution, while other courts have defined mold as an airborne pollutant.

Contractors are advised not to expose their business to chance

Contractors need to protect themselves against potentially devastating lawsuits. There are now insurance policies that specifically cover mold and pollutants. Contractors Pollution Liability (CPL) can be added to your CGL to cover liability for these pollutants and provide an unambiguous definition that includes mold or fungi.

CPL is probably the best available policy for contractors wanting to avoid liability when they discover mold on a job site. And there are other methods contractors can use to manage their mold risks.

Reduce Your Risk With an Arsenal of Protection

  • Choose your customers wisely: If your client is aware of a mold problem and knows the insurance company won’t cover it, you may want to walk away from this job.
  • Document your work: Leave nothing to chance. Use photos, notes, and witnesses to corroborate your findings.
  • Treat your customer with empathy: Approach your client with a plan of action that shows you understand his problem and will work with him to solve it.
  • Protect yourself: Adding CPL to your contractors insurance will complete an arsenal that will mitigate your mold risks.

Get Help For All Your Business Insurance Needs 

Contact us for all your mold remediation, contractor insurance, and business insurance needs in Philadelphia, Reading, PA and beyond.To learn more about Commercial General Liability and Contractors Pollution Liability insurance, or for any business insurance need, contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848. We offer insurance from over 25 competing carriers, so we're sure to find you the right insurance at the right price. Call or click today!

Tags: Contractor Insurance, Commercial Insurance Allentown PA, Commercial Liability Insurance, Commercial Insurance, Commercial Insurance Reading PA, Business Insurance, Commercial Insurance Philadelphia PA, Mold Remediation Insurance