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Tag Archive for: competitive edge

Additional Insured vs. Loss Payee: What’s the Difference?

October 9, 2022/in General Business Insurance, News

There are a lot of terminologies to keep track of in the commercial insurance world—two of them being additional insured and loss payee.

While additional insureds and loss payees are endorsements that extend insurance coverage to a third party, there are key differences in the scope of coverage provided in each.

Below, we’ll discuss the difference between an additional insured vs. a loss payee.

Additional Insured

An additional insured is a third party—either an individual or business entity—who is added to an insurance policy at the request of the named insured because they have a liability exposure in the relationship.

Typically, an additional insured would be someone who is working with the named insured on a project. For example:

  • A business partner
  • Contractor 

Insureon provides a great example: Say “the owner of an office building hires a janitorial company to clean its premises. If a visitor gets injured after tripping on a box the owner left in a hallway, the janitorial firm could be exposed to litigation.”

Therefore, “to protect itself, the janitorial company would ask the property owner to list it as an additional insured on the owner’s general liability insurance or business owner’s policy (BOP). That way, if the injured visitor sues the janitorial services company for negligence, the building owner’s insurance policy will defend the company.”

When listed as additional insured, the party is then protected under the terms of the policy just as the named insured.

Loss Payee

A loss payee, on the other hand, is a third party who is entitled to receive payment from an insurance policy in the event of a loss.

The loss payee is typically a lender (i.e. bank, mortgage company, the lender who financed the purchase of a piece of equipment insured under the policy) who has a financial interest in the property that is insured under the policy.

If that property is damaged or destroyed, the loss payee will receive compensation from the insurance policy.

Sound a little complex? Here’s a great example from Embroker:

You own a pizza restaurant (yum!) To make your delicious pizzas, you’ve rented “your pizza ovens from another company. If you add that company to your commercial property policy as a loss payee, both you and that company could receive payments if a fire breaks out in the restaurant and damages… the rented ovens.”

Why do both parties receive payments? “Because both have insured interest in the property that was affected.” It’s important to note, however, that the loss payee has first rights on insurance claim payments rather than the named insured.

A loss payee is added to a policy via a “loss payable clause,” which is typically added to a commercial auto or a commercial property insurance policy.

Key Differences: Additional Insured vs. Loss Payee

While additional insureds and loss payees are both parties who are protected under an insurance policy, the scope of coverage that each provides is quite different.

The key difference between an additional insured and a loss payee is that additional insureds receive liability protection whereas loss payees receive property damage coverage.

Additional insureds are protected in the same way as the named insured, while loss payees are only entitled to receive payment in the event of a loss.

Moreover, additional insureds are typically added to a policy at the request of the named insured, while loss payees are typically lenders who have a financial interest in the property that is insured under the policy.

When deciding whether to add an additional insured or loss payee to your policy, it’s important to understand the difference between the two so that you can choose the endorsement that properly protects your interests.

Learn More

In any project, it’s important to make sure you have the proper insurance to protect yourself and all parties involved.

A Certificate of Insurance (COI) gives a summary of what coverages someone has, whether it be general liability, workers’ compensation, or property. A COI can also include a description of coverages that might be there or attached; such as additional insured status or waivers of subrogation.

Read on for more on what you need to know about certificates of insurance.

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Get to Know Our Founder: Her Rotary Involvement

October 2, 2022/in News, Video

Brenda Jo Robyn is not like most business owners. Her background in epidemiology, love for running, and involvement in the Rotary Club of Coronado, California set her apart.

Watch the video below to hear more about Brenda Jo’s involvement in rotary, and the three primary causes that she supports.

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What is Rotary?

First, what is rotary? According to the official website, “Rotary is a global network of 1.4 million neighbors, friends, leaders, and problem-solvers who see a world where people unite and take action to create lasting change – across the globe, in our communities, and in ourselves.”

Their Mission

At Rotary, their mission is to “provide service to others, promote integrity, and advance world understanding, goodwill, and peace through our fellowship of business, professional, and community leaders.”

Brenda Jo’s Rotary Involvement

As you can see from her t-shirt, Brenda Jo is part of the Coronado Rotary Tech Team. This is one of three areas she focuses on in the rotary.

“During COVID we wanted to keep meetings going,” says Brenda Jo. “So, a gentleman in our club started doing Zoom meetings, and I joined a year and a half ago to help out.”

Today, the Rotary Club of Coronado conducts hybrid meetings with international speakers and past youth—this is where Brenda Jo helps out.

“I am on the Tech Team and get to help set up. I do the actual recording [and] help with making the video afterward. It’s been really enjoyable, and it’s kept me up to date with tech as it keeps moving forward!”

The other two areas of Brenda Jo’s focus include:

  • End Polio Now (Did you know polio is still not eradicated?), and
  • Low Tide Ride and Stride

The Low Tide Ride and Stride event happens every year. 

“Once a year,” says Brenda Jo, “you get to run, [walk], or ride your bike on the beach… on super low tide.”

The Low Tide Ride and Stride event is the “Coronado Rotary Club’s biggest fundraiser with a majority of the proceeds going to help support local combat-wounded veterans and first responders.”

“We raise quite a bit of money every year for these organizations and their families,” says Brenda Jo. In fact, hundreds of thousands of dollars have been donated over the years.

When we asked for Brenda Jo’s final thoughts on rotary, all she had to say was, “I love Rotary. Love, love, love Rotary!”
Interested in hearing Brenda Jo chat more about another area of her expertise—commercial insurance!? Read on to learn about understanding classifications for workers’ comp dual wage.

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Why an Advisor Should Work with an Insurance Broker

August 7, 2022/in General Business Insurance, News

Wealth advisors who seek the support of an insurance broker not only set themselves up for success but most importantly, they also do so for their clients looking to purchase real estate.

An insurance broker provides a wealth of knowledge to help understand what potential liabilities ensue from the real estate purchase, as well as mitigate risk. 

This partnership will help you as an advisor, guide your client to make the best financial decision as well as plan for the future with the guidance of an insurance broker. Let’s dive into why an advisor should work with an insurance broker.

Infographic of Why an Advisor Should Work with an Insurance Broker

Types of Insurance Needed

The right insurance to cover your client’s upcoming real estate purchase depends on a variety of factors.

  • What kind of real estate is your client purchasing?
  • Where is the real estate located?
  • What is the size of the real estate?
  • What is the purpose of the purchase (personal or for business)?
  • Is the real estate located in a climate that requires additional coverage (i.e. fire zone, earthquake zone, etc.). 
  • And more

All of these answers will help advisors understand potential additional costs that may go towards insurance coverage (or even potential damage should an unforeseen issue arise). 

The different types of insurance policies your client may need for their real estate purchase include: 

  • Homeowner’s insurance 
  • Fire insurance 
  • Flood insurance 
  • Earthquake insurance 
  • The list goes on

The Benefits of Working With an Insurance Broker 

An insurance broker can assess the real estate property to see what potential risks the property has. If the piece of real estate is located in a fire zone, the insurance broker can identify what coverage would look like.

Essentially, working with an insurance broker helps list out all of the different insurance possibilities your client needs. Basic homeowners insurance or umbrella insurance may come with exclusions for coverage for fires, floods, etc.

Knowing what additional policies may arise allows you to sit with your client and discuss their financial strategy to help them maintain their goals.

Once you have the full picture from the insurance broker you’ve partnered with, you can then budget appropriately. You then have all of the materials necessary to make sure you can give a holistic overview to your client and tell them, “this is a financially smart decision” or, “let’s find a different route for you.” 

The main benefits of working with an insurance broker can be boiled down to these three factors:

  1. You help your client mitigate risk
  2. You save your client money both short term and in the long run 
  3. Your client will have better knowledge of the real estate investment they are making 
  4. As a broker, you will then understand where you can save your clients money and where they may have to invest more

Read on for more information on risk mitigation.

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The Coverage Pitfalls of Insurtech

July 31, 2022/in General Business Insurance, News, Video

With the rise of technology comes the rise of a new sector disrupting the insurance industry: Enter insurtech.

But what is insurtech, and what are its coverage pitfalls? Here, we have Brenda Jo Robyn, founder of Competitive Edge Insurance, on video to discuss the coverage pitfalls of insurtech.

What is Insurtech?

First, what is insurtech? Insurtech is a combination of the words “insurance” and “technology,” and refers to “technological innovations that are created and implemented to improve the efficiency of the insurance industry,” according to TIBCO.

Research shows that the insurtech industry is expected to reach a market size of $114 billion by 2030. This doesn’t come as a surprise considering that this tech helps large insurance companies explore new insurance options without the need for human efforts. Using information gathered from observed behavior, TIBCO says this could include:

  • “Dynamically-priced insurance policies
  • Small business insurance, and
  • Social insurance options

Insurtech also provides insurance companies access to data streams from IoT devices.”

An internet of things (IoT) device is a physical object “with sensors, processing ability, software, and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks.” 

Read on for more information on IoT devices.

The Pitfalls of Insurtech

Insurtech’s technological innovations can scour the internet, pulling information from a host of websites to make an informed insurance assessment.

While technology can sometimes work smarter than traditional insurance methods of insuring a business, insurtech also has its pitfalls.

Insurtech and Underinsurance

When it comes to evaluating and preparing property insurance, insurtech might be able to provide you with information including:

  • When the building was constructed
  • Permitting information
  • When there were last upgrades or renovations completed

Insurtech, however, cannot give you the details of what is inside a specific building. It will not be able to tell you information regarding:

  • The tenancy inside a building
  • Rooms of high value inside of a building that might require additional coverage (i.e. computer rooms)

So, because of this lack of information, you have a lot of very underinsured individuals when it comes to using insurtech.

Insurtech and Human Touch

As it’s been made clear, you do not receive the same human touch when you opt for insurtech.

At Competitive Edge Insurance, we believe it is helpful to have a professional as your advocate to take a look and give you options—not a technological innovation!

The most important thing that you receive with that human connection, according to Brenda Jo, is that this professional can share that an individual has options.

They can:

  • Cover their property at certain limitations, or
  • Decide to self-insure

A traditional insurance professional can help determine what self-insurance might look like. For example, what will they be insuring? Is the self-insuring simply increasing the deductible or not having that type of coverage altogether?

Our team at Competitive Edge can help take a look at your unique circumstances to help determine your areas of risk, where you’re covered, where you’re underinsured, and how to amend these pitfalls.

Interested in learning more? Read on in our article “How Does a Building Owner Know if They Are Underinsured?”

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Will Homeowners Insurance Cover a Construction Project?

March 6, 2022/in Construction, News

So, you want to do a renovation or some construction on your home. Well, you’re not the only one! According to various studies, home remodeling has been hotter than ever during the COVID-19 pandemic. In fact, Houzz, an online home remodeling platform, reported a 58% annual increase in project leads for home professionals in June of 2020.

We don’t blame any of you homeowners for wanting to spruce things up, especially considering all the extra time many individuals and families have been spending at home the past two years.

When tackling a construction project on your property, however, it’s important to consider the bandwidth of your homeowners insurance. Is it enough? Or, should you consider investing in builders risk insurance as well?

Homeowners Insurance vs. Builders Risk Insurance

First things first, what’s the difference?

Homeowners Insurance

Homeowners insurance is defined as “a form of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home.”

It’s important to note that every homeowners insurance policy has a liability limit. This liability limit “determines the amount of coverage the insured has should an unfortunate incident occur.”

Homeowners insurance is typically used to repair or replace your home and its contents in the event of damage.

Builders Risk Insurance

Builders risk insurance, on the other hand, is not quite the same. Builders risk insurance is also known as “course of construction insurance.”

Hence its name, this type of insurance, is a type of property insurance that protects your home, or other buildings that are under construction. This coverage is essential to protecting projects from property damage that occurs due to:

  • Fire
  • Lightning
  • Hail
  • Explosions
  • Theft
  • Vandalism
  • Acts of God, for example, hurricanes

Builders risk insurance is a crucial part of a homeowner’s risk management strategy.

Will Homeowners Insurance Cover a Construction Project?

Is your homeowners insurance enough?

Whether you’re considering a from-the-ground-up construction project, kitchen or bathroom remodeling, or even room addition, there’s nothing more important than making sure you have the proper coverage.

Although each policy offers valuable coverage, they exist for separate types of risks. It’s important to note that while each policy will, of course, differ from carrier to carrier, homeowners should not rely on a homeowners policy alone to sustain the financial burden should a loss regarding their construction project occur.

After all, if homeowners insurance and builders risk insurance both covered the same risks, there would be no need for each to exist.

As a general rule, homeowners insurance covers damage to a property already in tact; builders risk covers damage to a property that is under construction.

Obtain the Coverage You Need

By consulting with an insurance broker prior to beginning a construction project on your home, you can learn all about gaps in homeowners insurance and where you may need additional coverage depending on your unique policy.

If you’re considering a project of your own, read on to learn more about how the California labor shortage is affecting the construction industry, and if there are qualified workers available to you at all.

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Payment and Performance Bonds Explained

January 16, 2022/in Bonding, Construction, General Business Insurance, High-Risk Insurance, News
Payment and performance bonds

Payment and performance bonds… The two are an odd pairing—unique in their own way yet dependent on each other.

Although payment and performance bonds have their differences, both are essential in protecting yourself in the world of insurance. Let’s explore the differences below.

Payment Bonds

What is a payment bond? Simply put, a payment bond guarantees payment for subcontractors and payment for materials once a project is completed.

Payment bonds are most commonly seen in construction. Payment bonds are a type of surety bond and are required for most state projects based on the Miller Act.

Surety Bonds

What is a surety bond? 

A surety bond is a contract where one party (the surety company) guarantees the performance of certain obligations in a contract of the second party (the principal or the insured) to a third party (the obligee).

When Do You Need a Surety Bond?

Surety bonds are needed for most licenses in the state of California and other states as well. Some examples of who might need a surety bond include:

  • Contractors
  • Real estate companies and agents
  • Financial institutions
  • Janitorial staff

Why Do You Need a Surety Bond?

Licensed bonds are required in many states to do business and are put in place by the state to protect consumers.

The insured, or principal, purchases these bonds in an amount prescribed by the state to pay the obligee (the state), in case there’s a claim against somebody’s license.

The Miller Act

As previously mentioned, surety bonds are required for most state projects based on the Miller Act.

The Miller Act was passed by the U.S. General Services Administration Public Buildings Service (GSA) to explain how payment bonds protect subcontractors and suppliers.

The GSA responds to any reports of nonpayment, following the legal action needed and protected by the Miller Act.

The GSA states that “the Miller Act requires that prime contractors for the construction, alteration, or repair of Federal buildings furnish a payment bond for contracts in excess of $100,000.” 

There are legal consequences for breaking a contract through the Miller Act.

The GSA expands: “Failure by a contractor to pay suppliers and subcontractors gives such suppliers and subcontractors the right to sue the contractor in the U.S. District Court in the name of the United States.”

Performance Bonds

The main difference between payment and performance bonds is that a performance bond ensures that the employer is satisfied with the job.

While both payment and performance bonds are surety bonds, performance bonds are visible in industries outside of construction.

A performance bond, according to Investopedia, “ensures the completion of a project.” A performance bond covers the ability of the contractor to perform and finish the job as per contract requirements.

If the contractor doesn’t perform, the contract bond kicks in and helps to pay for the completion of that performance.

A performance bond involves three parties:

  • The principal: The primary contact in the performance bond; responsible for performing the contract
  • The obligee: The person receiving the obligation
  • The surety: Responsible for making sure each party complies with the performance bond obligations

A Final Note

If these bonds are used and there’s a claim on a bond, the contractor who purchased the bond has to pay that back.

This considered, surety companies look for strong financials in a company, including assets, lines of credit, and letters of credit.For more information, watch this video about surety bonds and contract bonds. There, Brenda Jo Robyn, founder of Competitive Edge, lays it all out on the table in a way that’s easy to understand.

https://compedgeins.com/wp-content/uploads/2021/07/iStock-1209272786.jpg 1414 2121 Amanda Rogers https://compedgeins.com/wp-content/uploads/2020/11/logoweb.png Amanda Rogers2022-01-16 07:00:002022-09-16 13:10:19Payment and Performance Bonds Explained

How Small Businesses Fall Victim to Cyber Attacks

January 2, 2022/in Cyber Insurance, High-Risk Insurance

Cyber attacks are on the rise—and no business, big or small, is immune to the devastating financial loss that a cyber attack can have. So, let’s discuss a few aspects of cyber attacks to look out for, including:

  • What is phishing?
  • Why is it a problem?
  • Why are small businesses targeted?
  • How can your business prevent becoming the victim of a cyber attack?

Let’s dive in.

What is Phishing?

Phishing is an ever-growing concern defined as the “technique for attempting to acquire sensitive data, such as bank account numbers, through a fraudulent solicitation in email or on a website, in which the perpetrator masquerades as a legitimate business or reputable person.”

According to Brenda Jo Robyn, founder of Competitive Edge Insurance, phishing is “any activity that compromises your organization’s security.”

For more on phishing, read our article: “Why Is Phishing the #1 Thing Killing Small Businesses?”

Why is Phishing a Problem?

Let us provide an example of the dangers of phishing.

On February 5, 2021, according to The Pew Charitable Trusts, “a plant operator for the city of about 15,000 on Florida’s west coast saw his cursor being moved around on his computer screen.”

The cursor continued to move, “opening various software functions that control the water being treated [and boosting] the level of sodium hydroxide—or lye—in the water supply to 100 times higher than normal.”

If you didn’t know, the consequences of this breach could have been deadly if not caught immediately, as lye poisoning can result in:

  • Burns
  • Vomiting
  • Severe pain
  • Bleeding

While most cases might not involve the extremes of lye poisoning, this example shows the severity of phishing today. As a result, governments, states, businesses (big or small), and individuals should act accordingly to strengthen their cybersecurity efforts.

Why Do Data Thieves Focus on Small Businesses?

The consequences of a cyber attack on a small business are particularly severe. 60% of small businesses that have been hit by a cyberattack end up shutting down within six months of the attack.

Despite the irreversible aftermath of falling victim to a cyber attack and the fact that 43% of online attacks are now aimed at small businesses, CNBC reports that only 14% are prepared to defend themselves.

Interested in some more statistics?

  • 20% of small businesses have experienced a cyberattack in the last two years. 
  • Last year there was a 424% increase in small business breaches.
  • The median ransomware payment is up 52% to $71,664.
  • On average, businesses experience 22 days of disruption as a result of a ransomware attack.

Cyber attacks are not only extremely expensive to recover from but they also damage your business’s reputation and productivity, and can even be dangerous in the event of personal data being stolen.

This is why it is crucial to protect your small business from cyberattacks. But how can you protect yourself? What can the Florida plant case study teach us?

How Can You Prevent Phishing?

Luckily, there are measures you can take to prevent phishing as a business owner. Let’s discuss some options.

Training

  • Training your employees: To be vigilant; educate them on common phishing traps, email scamming tactics, and how to send data securely (In the Florida case study mentioned earlier, the employee who noticed the breach reported it immediately).
  • Training IT: To know what to look for

Be sure to document your training and review it on a weekly or quarterly basis with employees and staff.

Due Diligence

Ensure your business is conducting thorough, routine cybersecurity due diligence.

According to Security Scorecard, cybersecurity due diligence is “the process of identifying and addressing cyber risks across your network ecosystem.” Doing so provides “insights into potential gaps in network security so that they can be addressed before they are exploited by cybercriminals.”

For those who are interested in seeing where their business is in terms of safety, read on to learn how you can measure your company’s cybersecurity risk.

Have a Planned Crisis Response in Place

When it comes to cyber risk, there’s nothing worse than being ill-prepared. Of course, we couldn’t write about cyberattacks without mention of investing in a cyber liability insurance policy for your business.

A cyber liability policy might include:

  • Data Breach Coverage
  • Business Interpretation Loss Reimbursement
  • Cyber Extortion Defense
  • Forensic Support
  • Legal Support
  • Coverage beyond a General Liability Policy

As a small business, you must be prepared—because the consequences can be insurmountable. Interested in learning more about cyber insurance and why you need it? Read on in our article “Why Does My Business Need Cyber Insurance?”

https://compedgeins.com/wp-content/uploads/2021/12/How-Small-Businesses-Fall-Victim-to-Cyber-Attacks.png 628 1200 Amanda Rogers https://compedgeins.com/wp-content/uploads/2020/11/logoweb.png Amanda Rogers2022-01-02 07:00:002022-07-21 15:07:00How Small Businesses Fall Victim to Cyber Attacks

What Mandating the Vaccine Might Mean for Your Business Insurance

December 5, 2021/in General Business Insurance, Health & Wellness, News

Business owners have experienced unforeseen challenges as a result of the last nearly two years in a global pandemic.

The conversation surrounding the ethics of requiring vaccines has been floating around the workplace for about just as long.

In September 2021, however, President Joe Biden directed the Occupational Safety and Health Administration (OSHA) to introduce an emergency temporary standard (ETS) that requires companies with 100 or more employees to ensure all employees are:

  • Fully vaccinated
  • Or, that they submit to weekly testing and mandatory masking

*As of November 17th, however, OSHA has paused all vaccine mandates “after a federal appeals court upheld a stay.”

Regardless, it is still top of mind for employees. Here’s what mandating the vaccine might mean for your business insurance along with how you can prepare if the mandate is passed.

Who Would This Mandate Affect?

According to The New York Times, companies with 100 or more employees would “have until Jan. 4 to ensure all their workers are either fully vaccinated or submit to weekly testing and mandatory masking.”

This measure would be enforced to promote workplace health and safety and will affect “some 84 million private-sector workers across the country, including some 31 million who are believed to be unvaccinated.”

If the mandate comes into play, OSHA anticipates the ETS will be in effect for six months depending on COVID-19 statistics.

When Did This Mandate Come About?

“The measure was announced by President Biden in September [2021], and details were released on Nov. 4 by the Labor Department’s Occupational Safety and Health Administration [OSHA],” according to The Times.

COVID, ELP, and EPLI

First things first, what is Employer’s Liability Insurance? This form of insurance “protects your business when an employee sues over a work injury or illness,” according to Insureon. It is especially important, considering “almost one in five small businesses will face employee litigation” at some point.

Equally as important to consider is Employment Practices Liability Insurance (EPLI), which is insurance that “provides coverage to employers against claims made by employees.”

With the potential vaccine mandate, we can anticipate an increase in EPLI claims. As a result, we might see EPLI premiums increase. Kyle Jeziorski, Executive Vice President at Founder Shield offered insight: “I think insurers will try to add COVID-19 exclusions to EPLI policies and potentially offer the coverage for an additional premium.”

It’s definitely something we here at Competitive Edge Insurance will continue to keep a pulse on.

How Responsible Are Businesses for the Spread of COVID?

During the onset of COVID, many employees wondered to what extent businesses and business owners should be held liable if an employee were to contract COVID-19 on the job and suffer sickness or even death as a result.

The answer today is still clear as mud.

There are, however, steps your business can (and should) take to prepare for these newly introduced COVID-19 vaccine mandates.

Steps Your Business Can Take to Prepare

Business Insurance tells us that now is the time that businesses should prepare U.S. Equal Employment Opportunity Commission processes as well as human resources (HR) departments for what lies ahead.

As we well know, there are many employees across the U.S. who will request exemptions from receiving the COVID-19 vaccine due to religious or health reasons. This process, called an ‘interactive process,’ can take weeks or even months.

For businesses, this can be a lot added on their plates—especially if they receive a high number of requested exemptions.

Businesses should know this ahead of time and prepare accordingly.

Erect a Framework in Advance

“Businesses owe it to themselves to put together a framework to manage this,” says Chuck Kable, Chief Legal Officer and Chief Human Resources Officer at Axiom Medical. “You have to have a protocol and a process that you have to administer consistently and over time, and you have to treat everybody equally.” 

If businesses fail to do so, this is when liabilities begin to pop up. 

“Any mishandling of an exemption request can run afoul of anti-discrimination laws,” says Adam Kempe of Kelley Kronenberg. Companies might face various liabilities including:

  • Failure to maintain and keep private workers’ health information
  • Failure to follow steps in Equal Employment Opportunity Commission (EEOC) exemption requests

Consider OSHA Fines

If the headache of one of your employees filing a claim with OSHA as a result of your negligence isn’t enough motivation to get your ducks in a line, consider the hefty OSHA fines you might face.

If a complaint is filed, the first thing OSHA is going to look for is your current OSHA Covid Protection Procedures that are in place, which includes your Injury and Illness Prevention Program (IIPP). All employers are required to have IIPPs in place.

OSHA fines can be especially detrimental to your company’s financials because while OSHA personnel might come in looking for one thing, chances are they will do some digging, which could lead to additional fines or penalties. OSHA, in that sense, is similar to the IRS—except for employers.

Employee Screenings

A final precaution that employers should take, according to Brenda Jo Robyn, founder of Competitive Edge Insurance, is to conduct thorough employee screenings.

Brenda Jo also acknowledges that it may be the case that many people will choose to not work as a result of this mandate.

“You can find out a lot about an employee or potential employee from a screening,” says Brenda Jo. “Be sure to look at their workers’ compensation claims and do reference checks.”

Take advantage of not only their most recent reference but reach out to prior references as well.

A Final Word

With this potential vaccine mandate firing up, it’s especially important for employers to be on their A-game as far as safety procedures and insurance are concerned.

“There’s nothing that prevents a company, especially one not familiar with these issues, from now bringing in appropriate HR personnel, a consultant, or employment counsel to understand what to expect,” says Kempe of Kelley Kronenberg.

On the topic of vaccines, did you know that Brenda Jo Robyn, founder of Competitive Edge, began her career as an Epidemiologist who specialized in immunizations? To hear more about vaccines, specifically, her passion for Polio research, visit this blog post.

https://compedgeins.com/wp-content/uploads/2021/11/What-Mandating-the-Vaccine-Might-Mean-for-Your-Business-Insurance-1.png 628 1200 Amanda Rogers https://compedgeins.com/wp-content/uploads/2020/11/logoweb.png Amanda Rogers2021-12-05 07:00:002021-11-22 16:50:57What Mandating the Vaccine Might Mean for Your Business Insurance

What’s the Difference Between a Surety Bond and a Contract Bond?

November 28, 2021/in Bonding, Construction, High-Risk Insurance, News, Video

The world of insurance can be complex—and for contractors, work can be dangerous, too. As a contractor, the question of what insurance you need to stay protected is likely to come up.

So, for starters: What’s the difference between a surety bond and a contract bond? Which do you need to stay safe?

Today, Brenda Jo Robyn, founder of Competitive Edge Insurance, is here on camera to give us the spiel; including the differences, benefits and risks, and what you need. Let’s dive in.

What is a Surety Bond?

There are three parties involved in a surety bond, including:

  • The surety company
  • The principal or the insured
  • The obligee

A surety bond is a contract where one party (the surety company) guarantees the performance of certain obligations in a contract of the second party (the principal or the insured) to a third party (the obligee).

When Do You Need a Surety Bond?

Surety bonds are needed for most licenses in the state of California and other states as well. Some examples of who might need a surety bond include:

  • Contractors
  • Real estate companies and agents
  • Financial institutions
  • Janitorial personnel

Why Do You Need a Surety Bond?

Licensed bonds are required in many states to do business, and are put in place by the state to protect the consumer.

The insured, or principal, purchases this bond in an amount prescribed by the state to pay the obligee (the state at this point), in case there’s a claim against someone’s license.

What is a Contract Bond?

A contractor performance bond is a written contract that guarantees the performance obligations under a contract.

Contractor performance bonds are used frequently in the construction industry but are also sometimes used in manufacturing and supply chains as well.

When Do You Need a Contract Bond?

The short answer: It depends! Contractors can be required to have a contract bond for different parts of the process when they’re bidding for a job, according to Brenda Jo.

What Is a Bid Bond? When Do You Need One?

Oftentimes, a bid bond is required to submit a bid for a project. Typically, these bids are in the public arena for states or cities. For example, the Department of Forestry.

“A bid bond lets this entity know that the contractor can provide a payment and performance bond should the job be awarded to them,” says Brenda Jo.

“If the contractor is awarded the project and the contractor decides that they cannot fulfill the obligation, the bid bond helps to pay for the difference in price that it costs to get a new contractor in.”

This leads to the next kind of bond couplings, which is the payment bond and the performance bond. Let’s discuss.

Payment Bonds and Performance Bonds

What is a payment bond? What about a performance bond?

A payment bond is a bond that guarantees payment for subcontractors and payment for materials.

A performance bond, on the other hand, covers the ability of the contractor to perform and finish the job as per contract requirements. If the contractor doesn’t perform, the contract bond kicks in and helps to pay for the completion of that performance.

infographic showing the difference between a surety bond and a contract bond

A Final Word

An important note: For all bonds mentioned, if they’re used and there’s a claim on a bond, the contractor who purchased the bond has to pay that back, says Brenda Jo.

This considered, surety companies look for strong financials in a company, including:

  • Assets
  • Lines of credit
  • Letters of credit

Surety companies look for anything that creates a picture that says you’re worthy of having a bond put into place—because if the bond is utilized and pays out, they need to know that the purchaser of the bond can pay that money back.

Bring in The Experts

At Competitive Edge Insurance, we work with insurance carriers across the country to place all types of business coverage. We are always seeking out new insurance companies to write hard-to-place and high-risk business insurance.

Don’t let cancellation dissuade you from finding comprehensive coverage. We can help! Learn more by connecting with our team today.

Additionally, for those interested in learning more, choose between our articles on the key differences between general contractors and construction managers and the difference between payment and performance bonds.

https://compedgeins.com/wp-content/uploads/2021/10/Whats-the-Difference-Between-a-Surety-Bond-and-Default-Insurance.png 628 1200 Amanda Rogers https://compedgeins.com/wp-content/uploads/2020/11/logoweb.png Amanda Rogers2021-11-28 07:00:002022-05-27 09:45:25What’s the Difference Between a Surety Bond and a Contract Bond?

What to Expect from Changing Contractor Costs

November 8, 2021/in Construction, High-Risk Insurance, News, Video

The global pandemic brought many changes to the construction and builders industry. Here’s what to expect in 2021.

Read more
https://compedgeins.com/wp-content/uploads/2021/04/Construction-Feature-Image-scaled.jpg 1706 2560 Amanda Rogers https://compedgeins.com/wp-content/uploads/2020/11/logoweb.png Amanda Rogers2021-11-08 11:25:002021-11-08 11:29:52What to Expect from Changing Contractor Costs
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