Early, Cassidy& Schilling, Inc’s Employee Benefit Team was featured in the February issue of Rough Notes Magazine. The title of the article is “BENEFITS BEACON” and the link to the article is as follows:
http://www.roughnotes.com/benefitsereport/archives/v18_february2012/page34/page34.htm
Certificates of Insurance- This World has Changed!
Want to get paid? Want to get on the job? Want to get a certificate of insurance? Even worse, do you want to get a certificate of insurance that names a third party as an additional insured?
This world has changed. In order to provide certificates of insurance that include individuals or third party organizations as additional insureds, a written contract is required. Some insurance policy language goes further-requiring both a written and executed contract. Other requirements such as Waivers of Subrogation, Primary and Non-Contributory language must also be required in a contract in order for a broker to provide a certificate of insurance indicating compliance.
Ten years ago the requirements of a contractual relationship requiring additional insureds, etc. did not need to be met. Today they do!! The state Insurance Departments have specific regulations and requirements stating that no coverages can be amended through a certificate of insurance without endorsement to your insurance policies or being in compliance with contractual regulations of the insurance policy.
This puts a real burden on the issuance of a certificate of insurance in a timely manner.
Your EC&S team wants you to get paid or start a job on your schedule. Please provide a copy of the contract to your Early, Cassidy, and Schilling, Inc. representative when ordering your certificates of insurance so that we can deliver them efficiently and when you need them.
Written by: Tim Schilling
In a mature conservative industry like SURETY BONDS it is difficult to find new and exciting products. Even though I believe this statement, I am going to continue down the road with the original premise of this blog. What’s hot in the surety world for 2012? I do think there is excitement and interest in one particular segment of our business-Commercial Contract Bonds. And you ask “What are you talking about?” These bonds guarantee performance under a contract for a service, or supply/ installation of a product. Typical examples for this type of bond are a contract for a security guard service, a contract to supply school buses, or a facilities management contract. An emerging use for this commercial contract bond is to support the trend of cities, states and municipalities contracting services to the private sector such as school bus transportation or the maintenance of highways in an effort to become more efficient and save money.
Surety bonds, a proven method of risk transfer are frequently used to mitigate the downside risk of loss. We have seen increased requests for a performance bond being incorporated into RFP’s because contractors are requiring bonds from large suppliers and the public sector is protecting their taxpayers from contract default when it outsources a service.
Is your business in need a bond for the first time? If so, you are probably asking “What do I do now?” Early, Cassidy and Schilling, Inc. has the solution for you. Just contact the bond department today.
Written by: Lynne Cook
Are you entering the world of mobile banking? As you know, theft of information and hacking losses continue to rise. We have a few tips that could protect your bank account and private information to pass along:
Written by: Tim Schilling
In today’s cyber society, thieves have found a new cash generator – secure data. Every day, breaches are in the news. Most everyone has heard that Sony was breached for millions of records through PlayStation. What we are now learning is that the fastest growth area of data theft is from small business. A recent Wall Street Journal article cited the fact that in 2010, the U.S. Secret Service and Verizon Communications Inc.’s forensic analysis unit responded to over 750 breaches. More startling is that over 60% of them were at companies with less than 100 employees. The unfortunate truth is that a data security breach carries with it substantial costs in addition to any liability damages that may be assessed against your firm. No business seems safe. Documented breaches, of every magnitude, are occurring in virtually all types of business, including financial institutions, merchants/restaurants, schools/universities and municipalities. Based on a survey conducted by NetDiligence , the average cost of legal defense was $500,000, cost of forensics and related services was $200,000 and the average legal settlement was $1 million.
In additional to liability damages, three of the key areas of financial impact from a security breach include:
1. Crisis Services which can include forensics (problem diagnosis and repair), notification, credit monitoring, and legal counsel. To get an illustration of the potential impact on your firm, copy this link and go to this address: http://databreachcalculator.com.sapin.arvixe.com/
2. Business interruption costs
3. Public Relations costs to mitigate adverse media attention and related expenses to preserve favorable relationships with customers.
Another unfortunate truth is that a great burden is placed on business for compliance through a myriad of regulations. Based on the Health and Human Services website , there are roughly 46 laws and/or regulations regarding Confidentiality, Privacy and Data Security. While the leading acts are HIPAA, GLBA 501b (Graham-Leach- Bliley), HITECH (Health Information Technology for Economic and Clinical Health) and ERISA, there are many other federal regulations that can trigger fines or penalties. In addition, any business processing credit card transactions is also subject to Payment Card Industry (PCI) standards. Individual payment brands (e.g. Master Card, Visa) can and do impose fines and operational consequences on their retailers.
Don’t wait. Contact Early, Cassidy & Schilling, Inc. and let us help you asses the potential impact to your business. We will help you minimize your cyber risk by identifying control methodologies and transferring risk through insurance.
Written by Michael Fragola, VP Business Development, Early, Cassidy & Schilling, Inc.
On April 6, 2011, Virginia Governor McConnell signed into law H.B. 1951 Public Procurement Act which increases the bond threshold from $100,000 for non-transportation related construction contracts to $500,000. Transportation related contracts remain at the current $250,000 level. This is the highest threshold in the country and as you know the Federal Government’s threshold is $150,000.The Governor believes this new law will help small contractors obtain work within the Commonwealth, however, the change also produces some unintended consequences of which you should be aware.
No Payment Protection
Since a mechanics lien cannot be placed on public contracts, the use of payment bonds has been the standard protection for subcontractors and suppliers. With the new regulation, you as a subcontractor do not have any payment protection on a public non- transportation contract of $500,000 or less.
Prequalification Changes
The regulation suggests a new prequalification process in lieu of a bid bond for contracts in excess of $100,000 and under $500,000. When you, as a sub, take a job that is bonded, a third party is offering assurances to the owner and all parties involved that the general contractor is capable of prosecuting the contract. This is because the surety has performed a rigorous prequalification process from both the financial and operational perspectives. In addition, sureties maintain long-term relationships with a contractor which affords them an understanding of their client’s performance capabilities over a period of time on both public and private work. The new regulation imposes the prequalification process on to the public contracting authority.
This impacts you in at least two ways. First, will the new publicly managed process be as effective as the corporate surety regimen? Is the general contractor truly qualified to perform the work and pay the bills? Second, if you bid as a prime subcontractor, be prepared to participate in the state’s prequalification process which will probably include providing financial statements to them.
Taxpayer’s Risk
Historically, bid, performance and payment bonds have been the utilized for over eighty years by governmental bodies to transfer the risk of non performance from the taxpayer to the surety. Without the surety, the risk of default falls back to you, as a taxpayer, if your business or you reside in Virginia.
During the 2011 legislative session, the Senate reviewed S.B. 1126 which suggested increasing the threshold on transportation contracts from its current $250,000 level. This bill created a panel of interested parties to study the performance and payment requirements and report its findings to the Senate in December of this year.
Please watch for further developments.
Written by: Lynne W. Cook, Senior Vice President
written by: Jim Smith
Many construction companies form joint ventures with another contractor for the purpose of performing a major project. In order for the JV to be covered on the existing construction company’s General Liability policy (CGL), the JV must be added as a named insured. Some contractors prefer to purchase a separate CGL policy specifically for the JV entity.
Unfortunately many times clients forget or do not realize they need to notify their insurance agent about the new entity. EC&S has a solution: add a blanket joint venture coverage endorsement to the existing CGL policy. This will also eliminate the need for a second policy and assure NO GAPS in coverage will occur.
In case the exposure of completed operations is on your mind, there may be an endorsement available that will include liability coverage for the joint venture following completion of the project.
Members of the EC&S Construction Team are prepared to draft manuscript endorsements and request coverage from your CGL insurer.
