Fleet Safety Starts with Strong MVR Guidelines

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

One of the biggest liabilities that any landscape company faces occurs every day. This liability has nothing do with planting, mowing, trimming or irrigation work, in fact this exposure begins before any of the actual work takes place. Auto liability continues to be one of the most significant exposures every landscape company takes on when sending commercial vehicles out onto the road.

With increases to annual auto insurance premiums and the market continuing to harden, it is essential for landscape companies to be proactive to help mitigate these rising costs. Many landscape companies are now investing in safety technology such as GPS systems and dash cameras, but also conducting daily vehicle inspection reports to make sure the trucks are suitable for the road.  Implementing strong internal motor vehicle report (MVR) guidelines is another essential way for insureds to improve fleet safety while keeping insurance increases to a minimum. Insurance underwriters and carriers are placing increasing importance on fleet safety programs, and monitoring how a company is being proactive in trying to prevent claims.

Implementing and maintaining strong MVR guidelines is a critical component of any fleet safety program. Before any employee is allowed to drive a company vehicle, their MVR should be reviewed to ensure they have no major moving violations, their driver’s license is active and valid, and they have an adequate history of driving experience. The driving position in any landscape company is critical, which is why MVRs should be reviewed regularly and driver trainings conducted as often as possible.

Rancho Mesa offers a sample Driving Record Review policy through the RM365 HRAdvantage™ Portal to help clients establish their internal review policy. Online driver training courses through Rancho Mesa’s SafetyOne™ platform can also be incorporated into a company’s policy to ensure all drivers are well trained. Anyone can subscribe to Rancho Mesa’s weekly driver-specific toolbox talk emails.   

Building a strong fleet safety program starts with clear MVR guidelines and taking proactive measures that help reduce risk, protect your company from auto liability claims, and help control insurance premiums.

For questions about your auto liability, contact me at (619) 438-6905 or ggarcia@ranchomesa.com.

Training Your Landscape Fleet Drivers with Rancho Mesa

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Landscape businesses are well aware of the risks associated with their employees operating vehicles on a daily basis. The commercial insurance market has also taken notice of the risks and responded with rate increases and a diminishing appetite to write the policies. 

Rancho Mesa works with over 100 landscape and tree care professionals across the country. Due to our heavy concentration on the green industry, we are able to bring specific resources to this group in an effort to better prepare their businesses to mitigate risk.

An example of these industry-specific resources is our recently released driver-specific toolbox talk library that can be used on a weekly basis to help employees prepare for the common exposures they face while driving for your company. These short safety meetings should be used to supplement your fleet and driver safety program.

The library of 52 English/Spanish driver-specific toolbox talk topics includes:

• 6 Utility Trailer Driving

• 6 Worksite Parking and Awareness

• 40 General Driver Safety

Safety managers can use this content for:

• Weekly refresher trainings for fleet drivers

• During a specific time of year when there is low light, wet weather, or high wind

• Corrective action from GPS or dashcam insights (e.g., harsh breaking, speed management, following distance, right of way, turning, backing safely, and blind spots)

The library of driver-specific toolbox talks are available within the SafetyOne™ mobile app. And, anyone can subscribe to receive Rancho Mesa’s weekly driver-specific toolbox talk emails.

Rancho Mesa encourages the landscape industry to continuously train their drivers to better position them for success.

For questions about best practices for managing driver risk, contact me at drewgarcia@ranchomesa.com or (619) 937-0200.

Top Work-Related Injuries for Landscapers

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

Travelers Insurance’s peer data from 2020 to 2025 report showcases the top work-related injury causes within the landscape industry.  Looking at the top of this list, slip/trips/falls as well as strains account for roughly 40% of the injuries reported. 

With the state of the worker’s compensation marketplace clearly hardening, as shown by the proposed 11% increase to the pure premium rates in CA, now is a great time to make sure your landscape company is focused on preventing these top work-related injuries. (Learn more about the pure premium increase.)

Managing and accounting for slips, trips and falls for landscape companies can be difficult. Best-in-class landscape companies mitigate these claims by managing their job hazard analyses (JHAs). Documenting and communicating to the crew these JHAs can be very beneficial in the prevention of slips trips and falls.  Examples include calling out a portion of the sidewalk that may be uneven due to a root, or a hole in the grass. It can also include identifying  a slippery slope if it had just rained the night before, or perhaps when crew members are working in the morning hours when dew is present. Staying diligent with your company’s JHAs can help reduce these slip trips and falls.

The second major cause of work-related injuries referenced for landscape companies would be strains.  The day-to-day demands of being a landscape professional can be very taxing on the body as it is a very physical occupation. To help mitigate some of these strains, landscape companies should consider implementing a mobility and stretch program into their organization’s daily routine. This would consist of the crews getting together either in the morning at the yard, or at their respective jobsites and performing a quick 5 minute stretch routine to make sure their bodies are ready for the physical activity of the day. Rancho Mesa’s Mobility & Stretch™ Program offers an effective way to ensure employees are stretching prior to performing their job duties.

With workers’ compensation rates on the rise, now is a great time to revisit these key elements of your safety program and make sure your team is doing everything possible to help mitigate future work-related injuries.

For more information or to learn more about our safety resources, email me at ggarcia@ranchomesa.com or (619) 438-6905.

Have you Experienced Turbulence in Your Commercial Auto Insurance Renewal?

Landscape maintenance contractors with large fleets of service trucks are tough to place in the current insurance market. This, along with a hardening general liability market has led to some frustrating insurance renewals.

Rancho Mesa Insurance’s Green Industry Practice Group has helped over a 100 landscape and tree care customers currently operating across the country with navigating this turbulent market. Connect with them for a more detailed review of your company’s insurance placement needs.

“Our current landscape customer base has an average fleet size of 40 vehicles,” said Drew Garcia, Vice President with Rancho Mesa, Landscape and Tree Care Group Leader. “We are a fit for all types of landscape organizations generally starting at $3,000,000+ in annual revenue.”

Reasons Behind the Difficult Insurance Market

• Increase in bodily injury claims

• Increase litigation cost

• Distracted driving

• In-experienced drivers

• Increase cost for vehicle repair

Areas where Landscape Companies Can Focus

• Implement motor vehicle report standards

• Review physical damage needs for comprehensive/collision

• Provide formal annual driver training

• Ongoing driver monitoring and training

• Implement technology (i.e., telematics, fleet monitoring, dashcam)

• Train drivers based on data revealed from technology

• Perform daily/weekly vehicle inspections

• Detailed auto accident and incident reports and prompt reporting procedures

Rancho Mesa’s Green Industry Insurance Solutions

• Property and casualty insurance only (i.e., general liability, auto, umbrella, workers’ compensation, management liability, cyber liability, professional, pollution, property, inland marine)

• Multiple insurance carrier partners

• SafetyOne™ mobile app with landscape and tree care-specific toolbox talk content

• Trusted by over 100 landscape and tree care (green industry) businesses across the country

Four Areas of Focus for Landscape Contractors During A Hard Insurance Market

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

The property and casualty insurance market continues to impact landscape contractors resulting in increased costs, changes to carrier appetites, and overall concerns for insurability.

There are four areas of focus your business can review to help manage the things that are somewhat unpredictable during this difficult insurance market

Renewal Process

It is always a best practice to start the renewal process early. Engage with your insurance agent 90 – 120 days before your policies renew. And, be prepared to update renewal information and learn from your agent about current market conditions.

Policy Structure

Consider policy consolidation. Some insurance carriers have capabilities to underwrite your major casualty lines (i.e., general liability, automobile, umbrella and workers’ compensation) to leverage all your insurance to see if you can create some economies of scale and perhaps more opportunity within the insurance market. As your combined premiums exceed  $200,000, additional deductible options may become available.

Pre-Injury and Accident Prevention

Implementing a strong safety program and ongoing training can help prevent employee injuries and third-party accidents.

Post-Injury and Accident Protocol

Conduct thorough accident reports and investigations. Gathering detailed information at the time of an accident or injury is critical for your insurance carrier to best handle the claim. And, create trainings to avoid similar incidents from occurring in the future.[DG2] 

These four areas should be on your radar to ensure that your company can weather the hardening insurance market.

To discuss these specific areas or to evaluate your current insurance program, contact me at (619) 937-0200 or drewgarcia@ranchomesa.com.

The Importance of an Insurance Pre-Renewal Meeting

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

At Rancho Mesa, we conduct annual insurance pre-renewal meetings with all of our clients and it has always been a crucial part of the insurance renewal cycle.  Now with increased pressure on all lines of coverage, the importance of the pre-renewal meeting is even more critical. 

Typically, we schedule our pre-renewal meetings about 120 days prior to the renewal effective date.  For example, if an insured‘s effective date is January 1st, we will be conducting our pre-renewal meeting sometime in September.  Keep in mind that insurance carriers are able to accept submissions 90 days before the effective date, and getting a submission out at that 90-day mark is our goal. It allows the underwriter time to underwrite the account properly and gather any additional information they may need.  With insurance markets hardening year after year, underwriters are requesting more information with regard to operations, risk management, and safety procedures. Even requesting a loss control visit from the carrier’s risk consultants are becoming more common. By getting our submission out at that 90-day mark, it allows adequate time for all of that to occur. Additionally, by giving the underwriter ample time to do their job, it allows them to release renewal terms weeks in advance of the effective date.  This aligns with Rancho Mesa’s commitment to complete insurance renewal meetings well in advance of the effective date, allowing then for certificates of insurance to be issued in a timely manner. 

Now, let’s dive into what takes place at these pre-renewal meetings.  First, these meetings give our team a chance to sit down with our clients and go over anything and everything related to their current insurance program.  We talk about any changes in company operations from last year, we make sure all of the vehicle, driver, trailer and equipment lists are up to date, and talk about forecasting payrolls and sales for the upcoming policy term.  In addition to that, we inform our clients on trends in the marketplace while also providing educated budgeting figures for what they can anticipate come renewal time.  Overall, these meetings typically take somewhere between thirty minutes to one hour, with the goal of securing all applicable renewal information for our team to approach the marketplace.

As premium and pricing trends continue escalating, pre-renewal meetings are a great way to get an early start on your insurance renewal cycle, setting your team up for the most competitive terms and pricing well before your effective date.

To discuss your insurance renewal, contact me at (619) 438-6905 or ggarcia@ranchomesa.com.

Understanding Premise Liability for Landscape Maintenance Companies

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Vice President at Rancho Mesa, Drew Garcia sits down with John Fischl, Regional Executive with Sentry Insurance, to discuss premise liability risks for landscape maintenance companies, focusing on preventing slip and fall accidents and strategies for mitigating these risks.

Drew Garcia: Welcome back everybody. I'm Drew Garcia, Vice President of the Landscape Group here at

Rancho Mesa. You're listening to StudioOne™ our safety and risk management podcast. Today we're joined by a Regional Executive of the Pacific Region for Sentry Insurance John Fischl. John welcome to the show

John Fischl: Oh, thank you, Drew. It's great to be with you.

DG: Oh, we appreciate you taking the time to come back in here. So, Sentry is a big partner of ours and particularly for me in supporting the landscape industry. And today we're going to take a few minutes to talk about premise liability, particularly for landscape maintenance companies, you know, protecting themselves, protecting their customer, protecting their insurance carrier, and also the general public from exposures that can exist on a commercial property.

And primarily we're talking about slip and fall, trip and fall issues that can occur where the insurance carrier might have to get involved if there's an injury or a claim. John, talk to us a little bit about the state of that market, what you guys are seeing, and then we're going to get into a little bit about some things that where we think landscape businesses can better protect themselves in the future.

JF: Well, Drew, as you know, the climate for liability claims in California has gotten very, very difficult. The personal injury attorneys, and I think everybody is aware of the amount of marketing those folks are doing. We've all seen that the hundreds of commercials on television for all the different firms and billboards, etc. Suffice it to say that if somebody gets injured on property, they are going to call--or very

likely will call--one of those personal injury attorneys. So because of that and the fact you've heard the term social inflation, people on juries nowadays are much more apt to award large sums of damages for injuries, pain, and suffering, etc. So because of those two things: the advanced level of marketing from the personal injury attorneys and the social inflation we see, even relatively minor injuries are turning into very large settlement amounts in a lawsuit. So that is a real challenge for anybody in the business of making sure that premises open to the general public are safe.

DG: A good point. And you see, you know, the impacts that has from the insurance carrier standpoint and ultimately the trickle down to the policy holder. When there's pressure on a particular line of insurance, and in this case we're talking about general liability and what that might bring from these premise liability exposures, when there's significant pressure on a particular line, like we've seen over the last five or six years with commercial auto, what's a typical reaction or what type of reactions could be seen from insurance carriers when there is that unanticipated pressure, maybe not enough rate adequacy, what are some positions that carriers have taken in the past to either handle or deal with scenarios like this?

JF: Well, as an insurance carrier, you only have a couple of choices. Number one, you can decide that the level of losses and the frequency of losses will be greater than what you can anticipate and you would then have no choice but to exit that market and in fact in the last year we've seen a major provider of liability coverage in California for the landscape industry do just that they exited the market. And this has happened multiple times over the last several years. The other thing a carrier can do is kind of hang in there, tighten up their underwriting, look less favorably upon a landscape operator that has some frequency of claims, perhaps not offer coverage to that landscaper, and also increase rates, which is ultimately what has to be done when the cost of lawsuits continues to rise. Carrier has no choice but to raise rates. That should be understood by everybody at this point.

And I think if you've been in business, you know, longer than five years at this point, you've probably been through some sort of market with insurance where you've been faced with non -renewal or significant rate increase. And, you know, it comes as a result of issues, you know, and I think that the stance that Sentry's taken at this point in terms of trying to work with the landscape industry to better shed, mitigate, and manage risk as opposed to having to non–renew or to exit the space is greatly appreciated.

So let's talk a little bit about what things a landscape maintenance company could do to maybe better protect, like I said, their business, their customer, the general public, and then ultimately you as theinsurance carrier to avoid being pulled into maybe an incident that really could have been avoided.

JF: I think there are two primary avenues that a landscape maintenance operator needs to carefully look at. Number one is anytime that operator has the opportunity to control the language in that maintenance agreement, that contract that makes clear who is responsible for injury on those premises from an unsafe condition. If you do not have the ability to control that language, for example, you're signing an agreement with a large property management firm or a municipality, keep in mind that the attorneys for those property owners have crafted the language so that claims on their premises can be transferred whenever possible to the vendors who are providing services for those premises. So knowing that number two is to put a procedure in place by which your maintenance crews are looking for unsafe conditions and reporting those.

And a good procedure would include perhaps taking photographs using their cell phones. Let's say for example of a heaved bit of walkway from a tree root. That photo goes into the office. Somebody in the office is then responsible for including the images in a quick narrative to the property owner that, “Hey, want to notify you, we've found this unsafe condition, somebody could trip and injure themselves, we recommend that you repair that unsafe condition as soon as possible.”

And then keep a record of that notice. And perhaps even once a year if that condition goes un-remedied, re-notify on a periodic basis. This way, when somebody does trip and fall and they break a bone and they call a personal injury attorney and that attorney sues the property owner, the insurance company for that property owner is going to try to transfer that claim to the landscape maintenance company's insurance.

If you've got documentation that shows you notified a property owner of the unsafe condition, you're now kind of off the hook and it is back in the property owner's liability because they were the ones negligent that even when told by you that they had an unsafe condition they did not remedy it. So the key is to inspect and report and retain those notices to ensure that these sorts of claims won't end up with your insurer and ultimately result in either the non -renewal of your insurance or the raising of your rates.

DG: Very clear and very simply put I don't think another question could probe any more information that our audience would need in that scenario. But if I can quickly recap to see if I've got this right, so we're focused on our contracts and whether that's something that we're imposing to our customer or the customer's imposing a contract on us, review that language and push back where appropriate. And then once you're in contract and maintaining a property, there needs to be some level of you know reporting and documenting potential hazards that are on that property that probably coincide with your scope of work and then, you know, reporting that to the property manager building owner and then keeping record of that information for some time.

I think today there's so many different management systems that are now available to landscape companies so there could probably be a workflow created within one of those systems already and if it's something that you don't have access to a management system. And like you mentioned, John, we've all got cell phones. Is there the ability just to snap a quick picture, send it to your supervisor? I mean, it doesn't have to be, I guess, as daunting of a task as people might think initially. And again, this is to hopefully better protect your business, protect your customer, your insurance carrier, and the general public. If there's an issue on a property, we're trying to avoid injuries at all cost for everybody and so I think not only are you providing resources and tools for the landscape industry to better manage your own risk but in turn you're creating safer properties and hopefully minimizing the overall amount of activity that can that can happen. And is there anything that you would you would want to add to, this or do you feel like we've covered it pretty well?

JF: I would just offer that the audience of landscape maintenance contractors understands the level of severity of these claims. Let me give you a couple of quick examples. Person trips on a raised piece of walkway, the person falls, breaks their fall with their hand and breaks their wrist. The wrist is a typical break that requires surgical intervention. That type of claim today is being settled for several hundred thousand dollars.

We've seen broken ankles where somebody steps into a depression or a hole in the grassy area. A broken ankle these days, that settlement will be several hundred thousand dollars. So there's never been a more important time to make sure that if you've signed a contract where you are going to be responsible for inspecting and reporting unsafe conditions, make sure that you have a procedure in place to do that to protect your insurance program for the future.

DG: You can kind of put into perspective like that. I think it helps our audience better understand the severity that's out there and how unpredictable that can be from the carrier standpoint in terms of when do I know this is coming in and do I have enough premium to offset that issue?

And I could see that's a challenge that your team is faced with and this is the reason why you're going to be looking for things like this that are going to elevate the landscape businesses overall risk management program and then in turn maybe there's opportunity to support a policy for them or work with them to some regard.

JF: Absolutely. And I would add that, you know, many of the types of repairs or service levels needed can actually create revenue for the landscape maintenance operator, be it the trimming of tree limbs or the removal of tree roots coming up in a grassy area that people could trip over. Irrigation systems that maybe need a little redesign because they're putting too much water on a street or a walkway, making that slippery. There's a number of things that the landscape contractor can actually get involved in and providing estimates to take care of these things. And there are other things like masonry work, paving, or maybe that's not something the contractor can do. They'd need to have the property owner find another subcontractor for that. But those are all opportunities and at the same time keeping your insurance program intact.

DG: John really well said we appreciate the time, the insight from your perspective is so critical right now for our customers but for the landscape industry in general and I think there's going to be a lot of takeaways from our audience today based on the information that you shared so we really appreciate you partnering up with the landscape industry and being here for us to share this information so everybody's in a better spot.

JF: Well, thank you, Drew. Appreciate having an opportunity to chat with your audience. And I'll just put in a little plug for Rancho Mesa. You guys are one of our very finest insurance agency partners. And we appreciate everything you do. Thank you.

DG: We appreciate that, John. Thank you so much.

Creating a Standard Operating Procedure for Work-Related Incidents

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

In order to improve a process, there needs to be a baseline. When it comes to tracking, reporting, and following through on a work-related incident, injury or illness, creating a standard operating procedure (SOP) sets the foundation.

Flow charts can help all stakeholders better visualize the process and show potential next steps based on yes/no questions. This type of operating procedure also shows the duties and obligations for the individual employee, supervisor, human resources personnel and safety manager that is involved.

This process will ensure your employee receives the timely care they need based on the particular circumstances and provide your staff the confidence that they are accurately handling the situation.

Other areas to consider within this work flow can be:

• OSHA reporting requirements

• OSHA recordkeeping

• Initial incident report

• Supervisor’s report

• Witness statements

• State-specific requirements

• Follow up reports to address the root cause and prevent similar incidents from occurring in the future.

Standardizing your injury reporting protocol is the first step to getting the appropriate care, minimizing the incident’s claim impact, and providing you training opportunities to reduce the risk of a similar claim reoccurring. As your business continues to evolve and grow, it is critical that you establish a protocol as your foundation and continue to fine tune it as new departments are created or areas for improvement are observed.

Risk Management and Contract Strategies to Protect Your Landscape Business

In this second episode of a special two-part series, Landscape Group Vice President Drew Garcia, is joined by Josh Ferguson, attorney with Freeman Mathis & Gary, to discuss contract strategies and risk mitigation for slip and fall incidents.

Drew Garcia: Welcome back everybody. I'm Drew Garcia, Vice President and Landscape Group Leader here at Rancho Mesa. Today we have a great opportunity to connect with Josh Ferguson from Freeman, Mathis and Gary. Josh and I had a chance to get to know each other over the last couple of years through different trade associations. Josh has a big focus on the landscape and snow contracting community. Josh, welcome to the show.

Josh Ferguson: Yeah, thanks for having I appreciate it.

DG: All right, Josh. So we're going to jump into some things that are kind of current and news and noteworthy right now for primarily landscape operators. So primary, you know, customer is going to be community associations, commercial properties that could be hotels, could be shopping centers, municipalities doing city work. I know each customer might have different needs in terms of how those contracts might need to be set up. But some things that we're seeing on the slip and fall, trip and fall side, want to talk a little bit about if you're seeing that same kind of activity and what are some things that the contractors could be doing to help, not only just prevent them from happening, but if something comes in, what's that supporting documentation that might help your insurance carrier or you when you're going through an incident like that?

And then also talking about this commercial auto market, you know, a lot of the insurance carriers, this has been an issue for a really long time and they're trying to raise rates fast enough to be able to cover the losses that are in the past and they're looking out into the future and it's causing some significant increases and in some cases some non-renewals or some change in appetite and that can really hit landscape hard because these businesses are built with a lot of vehicles in mind and they got service areas that they've got to get to. So I want to talk a little bit about the commercial auto side and some things that maybe the landscape business should be considering. There's certainly technology out there that might be able to support them in some of those efforts, but let's jump first into the slip, trip, and fall type of scenarios that can happen on properties and maybe talk a little bit about trying to defer or shed some of that liability through the contract and you know calling out scope and everything like that that might help build a better case for the landscape company in the event something like that occurs.

JF: Sure, and what you said to start with I think is right on we are also seeing an uptick in volume of claims relative to trip or slip and falls involving landscape contractors getting brought or dragged into those lawsuits. And part of the reason we think they're getting dragged in based on the claims we're seeing and the conversations I'm having is from really broad contract language that is things like monitor and inspecting provisions or maybe unclear terms as to what the landscape or hardscape services are actually to be. The broader or more ambiguous those terms are, the more a property owner or property manager when they get sued can have their attorney go through the rolodex of vendors they have on site, look through every vendor that has a really broad contract and bring in those contractors. So, in the same trip and fall on gravel, they may end up bringing one hardscape company, one landscape company, whoever dug up the piping or drainage on the property to get everybody involved, to make sure that they have the best chance of being protected. So, how we would combat that is again, make sure that the scope of services are really well defined to what you're actually going to do at the site, when you're going to do it, the timeframe you're going to do it, and then have some liability limiting language saying once you're done it, you have no duty to monitor inspector after and they deem that it's satisfactory work, again, to help protect you there.

DG: And if you're the landscape contractor and you already have maybe contracts in play and it's not a practice for you to revisit, you're listening to this now saying, “Shoot, I've already renewed a lot of my business or I'm working for people that I haven't looked at the contract in a couple of years, we just kind to continue to renew it.” What would be the cadence again on looking at those contracts and making sure they're up to speed and how would you go about getting that done so you feel confident that you're in a position where you're there to support the issue if the issue is a result of your work and you're not picking up more than you are anticipating?

JF: Sure. I think there's a two-part answer to that question. I think first and foremost, even if you've signed an agreement and you're in the middle of that period of time in which the agreement's valid, but you think something just isn't accurate or correct or it was when you signed it but they're not letting you do that, there is no reason you can't go to your client and say “This is actually not within our scope or you're no longer allowing us to do this, we should sign an addendum to this agreement confirming the actual obligations of the party.”

As an attorney, again, I want a 10 out of 10, and a 10 out of 10 would be those terms define what you're not supposed to be responsible for and everyone signs it. But even if it's just something where they acknowledge it by email, if then a claim arises relative to that issue, we've got something. We want—and by the global “we”, I mean you as a contractor, me as an attorney and your insurance company—we as a group want anything we can do to help protect you. And some things are better than others, but something is better than nothing. So first and foremost, I want to say that if you're listening to this and then know you signed a contract that's unfair, inaccurate, it doesn't mean you can't have those conversations. We can't guarantee the results, but I think it's worth that conversation.

And then if you did sign it and then you feel like there's nothing you can do about it, I would strongly suggest you revisit contract language on a yearly basis. Whether that's your base contract, you have folks sign or when you re-up with clients that you should look at on a routine basis. As an attorney who's done it for 20 years—and I review hundreds of contracts, especially in the late summer, early fall for snow and ice and then for maybe late winter, very early spring for landscapers—things come up that we had never talked about before. Things change in the industry or you as a contractor may change the type of services you perform. You may be a residential person and you're moving over to HOA or commercial, whatever it is. And then as a result, the language in your base agreement may need to be different. So I would strongly recommend doing it on a yearly basis.

DG: I'm nodding my head the whole time. I know this is just audio, but I'm just thinking of the past conversations with so many businesses and those are the things that come up. You know, everybody's an entrepreneur at heart when you own a business and that could create change No matter if that's with your customer base or a new service that you're offering and making sure that you're just covering your checks and balances in terms of how you're setting this up is important because at the end of the day you just want to make sure that you're supporting the business in the event there's an issue that, you know, comes against you and providing people like you the right information you need to defend.

And I would say the other key issue right now within the landscaping industry, primarily on the maintenance side; so when we've got fleet-driven businesses, commercial auto is at an all-time high in terms of so much scrutiny by the insurance carriers. And for a good reason, they've put out plenty of supporting information to show that they cannot collect enough premium to cover what seems to be the amount of claim cost that comes in. And in my experience with this, when I'm going through a renewal or if I'm talking to a landscape contractor about their business, and then ultimately get to that underwriting conversation. There's a lot of hesitancy right now with this class of business because of the amount of vehicles that they have. And they're really taking a deep dive into driver training, the ability to use things like GPS and dash cams, just as a way for driver behavior and training to that information. So it'll kind of open up that next category where I think originally maybe GPS was being used for routing purposes and then idling and fuel cost, but if you're seeing somebody kind of consistently speed or harsh breaking, harsh turning and you're not coaching to that information, am I right where you could be opening yourself up to some more opportunity where you had the information available and maybe you should have made some corrective action?

JF: Yeah, so there's multiple layers to what we're seeing and they all end kind of with the same end result, unfortunately. So there's certainly social inflation across the board for all personal injury claims The numbers are up across the board whether it's an auto claim, a slip-and-fall claim, a construction defect; whatever it is the numbers are just higher for settlement and for verdict, we track verdict analysis pretty consistently, and the numbers are up whether it's in South Dakota, California or Pennsylvania. So there's that aspect and that as a result then drives up the cost that the carriers are paying on those settlements and verdicts.

And then I think you're right, the plaintiffs' attorneys have figured out a way in this orbit of the landscape world to, if it's an auto claim, focus on the fact that if there's an inadequate training on these things, they can try to put the jury in the same person, in the same stance as the person that was injured, and try to get the jury to then punish these companies. And that's certainly the kind of claims that insurance carriers are worried about, which then cause earlier settlements and impact premiums or their even willingness to write the auto side.

The landscape industry, I think, certainly does a great job on across the board training for their employees because they're worried about workers comp and their employees’ safety. And they're thinking about slip and falls and tripping falls, but at the end of the day, as you mentioned already, all of these folks are in fairly heavy pieces of equipment and sometimes we kind of gets caught by the wayside that these are the things that could really cause the catastrophic losses and that bears out then in huge numbers and so the carriers are worried about it. So they want to see some internal training they want to see what kind of background information you're doing and training for these drivers because they want to make sure that even if they're going to have to pay out for a loss for your driver negligent running into somebody they at least want to be able to show that it was a one-off, it was truly negligence, and it was an accident, and that there wasn't any kind of history that should show that this was bound to happen.

DG: It makes a ton of sense, you know, when you back it in that way. And I think as most business owners, nobody's set out to go about business without any strategy or without any training. And I think that with the amount of technology that's now available, it's easier for them to gather information whether it's leading or lagging information to kind of appropriately assign and create trainings to make sure that they're putting their drivers in the best position to be successful and not to be in these accidents. And at the end of the day maybe having more evidence to provide to you and the insurance carrier to ultimately defend if there is an issue. Talk to us a little bit about—I'm going to flip right back to the contract side on slip and fall documentation—when it comes to doing that type of work or doing when you're primarily engaged in landscape maintenance for these commercial properties. What are some things that the landscape company can do to show that the proof of work or the scope of work was complete? And do you have any examples that you've seen in the past where people are using this so that it does help just with the proof of work being completed?

JF: Yeas, so, on the landscape side, sometimes we don't always get the records exactly when things were serviced, especially if it's a contract that says, you know, say twice a month mowing or weed whacking or fertilizer placement or whatever, gravel, whatever it is. There aren't always great documents to show when it was actually done. And then as a result of it, we have to go back through timesheets, sometimes years later when a claim arises. So, you know, we're really looking for increased documentation and I think technology does make it a lot easier, it takes away some of the friction for this to really show when where and how exactly the work was performed so that we can show that it was done as we see.

Again, one of the claims that does tend to come up a lot is when somebody trips and falls in a hole and the landscaper gets dragged in because they say it was covered up because it wasn't properly then mowed and our contract says twice a month and then we're having to dig through time sheets but if we actually know exactly who was out there when they were out there; if you have any records with communications with your client, if you're not going to be out there for a certain time because say it hadn't rained in a while or it's extra dry weather that August or September, help things explain itself a little better. Again, it puts you in a better position. Otherwise, we're at the mercy of again, relying on credibility and the insurance companies, especially in these days of social inflation with bigger settlement and verdicts, they don't want to rely on that. They'd rather settle out on the case and protect themselves from those high exposures.

DG: I appreciate it, Josh. I want to thank you again for coming in and helping us out and talking a little bit about snow, talking a little bit about landscaping. I think this is the beginning to just getting more information out to the industry. The goal here is just to educate people and raise the level of professionalism, raise the level of oversight and expertise when it comes to executing on the work that's being done in this industry. So I appreciate you taking that stance and kind of leading the way with the history of your involvement with both snow and with landscape. If somebody wanted to reach out to you or connect with you, it would be a good way for someone to do that?

JF: Yeah. You can find me on our firm's website, Freeman, Mathis and Gary; Joshua Ferguson, and I'd be happy to reach out and respond and I very much appreciate the time today.

DG: Josh, thanks again. Appreciate it.

JF: Thanks.

Navigating Snow and Ice Contracts: Best Practices for Landscape Contractors

In this first episode of a special two-part series, Landscape Group Vice President Drew Garcia, is joined by Josh Ferguson, attorney with Freeman Mathis & Gary, to discuss risk management for snow and ice operations and what landscape contractors should know.

Drew Garcia: Welcome back everybody. I'm Drew Garcia, Vice President and Landscape Group Leader here at Rancho Mesa. Today we have a great opportunity to connect with Josh Ferguson from Freeman, Mathis and Gary. Josh and I had a chance to get to know each other over the last couple of years through different trade associations. Josh has a big focus on the landscape and snow contracting community. Josh, welcome to the show. If you could share a little bit of your background with the listening group.

Josh Ferguson: Yeah, thanks for having me. I appreciate it. So as you said, I'm Josh Ferguson. I'm an attorney with the law firm of Freeman Mathis and Gary. I'm based in our Philadelphia office, admitted to practice in several states up and down the Mid-Atlantic. And I've been a litigator for 20 years now. I've litigated hundreds of slip and fall and trip and fall claims, developed the specialty over the last dozen years or so in the landscapes, snow and ice management, power sweeping industries, and have relationships with some of the trade associations in those industries like Snow and Ice Management Association, Accredited Snow Contractors Association, Planet and some of the state and regional landscape and snow contractor associations.

DG: Josh, your background's perfect timing for us because I can't tell you how many conversations with our clients lead to contracts and the contracts that they're signing with their customers, whether they're signing the customer's contract or are they putting their contract in front of the customer to sign; opportunities to review that and make sure things are up to speed before they start to get the work done. So I'm really excited for you to be able to comment a little bit on, you know, one, in the snow and ice management world, obviously the contract is super important. What are some things that these landscape contractors should be focused on pre-work, and before the contract gets signed, what are some things that they need to focus on to make sure that things are in order in the event something happens later on down the line?

JF: In the snow and ice management world especially, they're risk managers first and foremost. It starts and ends with documentation. So that's from the very beginning when they're starting to develop an RFP to if they get a contract and they need to do a preseason site inspection through in-event performance, post-event performance and invoicing all that needs to be documented. Because if it's not documented when these claims arise whether it's your client on the site telling you, you damaged something or two years later somebody said they slipped and fell you're going to need to prove through a document ideally what you did six months or two years before otherwise again it comes down to credibility and you don't want those claims to turn into intersectional car accidents where everybody claims they have the green light.

DG: That lines up so well with insurance right now because, you know, before we started recording this I was talking about just the carrier underwriting capacity for this type of work. It's really dwindling. There's a lot of questions that surround the pre–underwriting process or pre -quoting process for any landscape company that's in any portion of their work doing snow and ice operations. And you know, one of the key pieces that I think is starting to push the industry in the right direction is the ability to document and there's a lot of technology and software that's making that a little bit easier. Have you seen some improvements in the contractors’ ability to document based on the technology that's available to them today?

JF: Yeah, look, at the end of the day, from an attorney perspective, we're asking for the sun, the stars, and the moon from these contractors. And in the middle of an event, things are more challenging. It's why we probably didn't get as much documentation back in the '70s and '80s and '90s, but technology has really changed the ability for them to do things without a ton of extra work, whether it's right on their phone with an app or it's the actual pieces of equipment, recording it, GPS, or application of de-icing material, whatever it is. And we are seeing that more and more in claims when a suit arises and we're asking for documentation that's coming. And it really does make a big difference in our ability to prove that what you say you did, you actually did.

DG: And I mean, so important in today's world to be able to have that proof. And when there's the ability to do it, it's on the contractor to develop those processes so that it becomes routine so that they don't miss that one opportunity and that opportunity becomes the one that comes back to get them in the end. How about when that work’s being subbed out, so not self -performed, maybe by the landscape business, but they're using service partners to form that segment of the business. Is it same concept there? Are you holding your subcontractor to those same standards? Should they be doing anything different with that work?

JF: Yeah, I mean, absolutely the subcontractor should be doing meeting industry standards and what's in the contract. One area I see contractors that are really good and do good work fall down a little bit when they subcontract out work is that they may have one base subcontractor agreement that they hand out to all of their subs. But each and every one of their client contracts might be different. And you want to make sure the terms that you're obligated to are then passed down to your subcontractor so there's not a gap. So we're talking about the actual scope of services, we may even be talking about the insurance policy limits. These claims have gotten larger and larger in size. What used to be a slip and fall that costs $200,000 now costs half a million dollars in some locations. And sometimes that impacts policy. So you want to make sure you are really comparing and contrasting and making sure that your subcontractors are meeting all the burdens that you would have had to meet should you have kept the work.

DG: Absolutely. And do you see, is that something that a contractor should be looking at routinely? So how often should they review their subcontract agreement to make sure, “am I up to speed with today's terms?” Or is that like once a year you should be looking at that? What's a good cadence on just reviewing that and making sure that you're up to speed?

JF: Yeah. I mean, I think both on your client contract and then your subcontractor agreement, I would look at those yearly. As someone who reviews, especially this time of year over the last few months, dozens of contracts sometimes a day from my various direct hire clients that I serve as outside general counsel for, it's a living and breathing document, right? So even this many years into litigating and serving as general counsel, things come up each year where then we're adjusting a base agreement for. And in addition to that, things change over time. So I think it's something, and business models change. You may do less retail shops and more HOA work. And that may change the type of language you want in your agreements. So I think those are things you should revisit on a yearly basis.

DG: And so that the people listening on the other end have an idea is how to get that done is that having somebody like you in their corner where, you know, annually they're sending these over to you for review? So having some sort of partnership with a firm so that they have this ability to manage those contracts throughout the year or when they're annually recreating their subcontract agreement. Is that how you get that done?

JF: Yeah, I think that makes the most sense, you know, if you have a counsel or somebody you're comfortable with that makes a ton of sense. Again, something we do we do a fair amount and we revisit those annually and then, again, we know there's peak season for those contract review negotiations especially if you're getting a client agreement pushed down on you and you have some concerns with the language, that's something we look at routinely. But whether it's us or someone else the thing that I hope folks come away with the most is that you should always try to review that that contract that's put in front of you and mark it up so it's at least fair. The worst thing that's going to happen is it's all rejected, but you still have the benefit of reviewing it, understanding it, and so at least you know your risk management there.

DG: Good point. I think I like that term, just being fair, because I think a lot of the audience listening that is in this space and performing some snow and ice service or some winter services, they understand that at the end of the day, they want to be there to provide coverage if there's an issue that they inadvertently did. If it was an issue that came up as a result of the service that they rendered, then absolutely, you want to be there for that. I think it's where it might be a little bit of a gray area in terms of who's really at fault with this, that's where I think a lot of the businesses today. Are you seeing more where the contractor's able to put their contract in front of the customer or is it shifted now where the customer's more imposing their contract to the contractor? Has there been any change in that recently?

JF: I think it's pretty consistent that the big box stores, the retail establishments, the large property managers are still trying to put their agreement in front of folks in the snow and ice management industry. We are seeing, I think, an overall uptick in the willingness to engage in a back-and-forth process on the language. Again, depending on the size and folks involved on the other side. You may get one thing out of 10 changed, you never know. But again, most of the time it's worth those efforts.

I am seeing more contractors that have at least drafted up their own contract. And so sometimes then we try to add our contract—meaning the snow and ice management contractor—in as an addendum or an exhibit to then the say property managers contract to help balance out some of the risk and liability-limiting language.

DG: Got it, very good. Anything else that you wanted to share in your experience with snow and ice? I know this could go a number of different ways and we're trying to keep the time down to a 12 –minute segment, but anything else that you wanted to share on the snow and ice side for the listeners?

JF: Yeah again, the importance of having a contract that's clear on your obligations and documentation to prove what you did in January 15, 2021 at 2:30 A.M. If you've got a contract that says the time you were supposed to come out, exactly what you're supposed to put down—and you have the documentation to prove it, it allows your insurance company and their attorney, if a claim arises, to put it in the best position to defend those claims instead of paying out. And that will protect you and the industry as a whole over the long run.

DG: That's a great point. Well said. Well said. Well we appreciate it, Josh. Thanks for the comments on snow and ice, and hopefully we can do this again soon.

JF: Thanks for having me.

Reviewing 2024 Insurance Landscape and Forecasting into 2025

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

Now that we’ve turned our calendars and 2024 has come to an end, I wanted to give a brief review of the current state of the auto insurance and workers’ compensation markets within the green industries (i.e., lawn, landscape and tree care).

Auto Market

The auto markets continue to harden year after year and unfortunately it does not look like it will be softening anytime soon. Increases to auto claims cost is the biggest culprit for the hardening market. The rise in auto claim cost stems from medical cost inflation, increases in auto nuclear verdicts (i.e., any claim amounting to more than $10 million), and an uptick in frequency.

For the green industry, most of our clients have large fleets, and thus navigating this challenging market is difficult. A few things that we stress to our clients to help minimize cost increases is to have a strong written Fleet Safety Program in place. Training drivers on a consistent basis, as well as having strong driver criteria for the company, is also important. Make sure the employees that are allowed to drive company vehicles are capable and take that role seriously. Finally, staying up to date with the advancements in technology such as dash cameras or GPS systems can help as well. Forecasting another hardening auto market with rising premiums in 2025 makes staying on top of fleet safety a top priority for all.

Workers’ Compensation

The other major market segment to review is workers’ compensation insurance. This market has been relatively soft over the last 7-8 years where employers were seeing decreases and flat renewals year after year. Reviewing 2024 and looking into 2025 and beyond, experts believe that this line of coverage may begin to harden for some risks with many of the same reasons as the auto market. Medical cost inflation, wage increases, and litigation rates (particularly in California) all are impacting carrier bottom lines who are, in turn, pushing for rate increases. Two focal points for our landscape clients that allow them to control their premiums continue to be their Experience MOD (XMOD) and partnering with strong workers’ compensation carriers. Controlling the XMOD begins with making sure the company is doing everything they can to control risk. Weekly safety tailgate topics, wearing proper PPE, and recording JHA’s (job hazard analyses) are crucial in building a company’s safety profile. Along with those proactive strategies, choosing to partner with a strong workers’ compensation carrier can also help control the XMOD.  Aligning with the right carrier that understands the exposures of the green industry, handles and closes claims timely, and offers in-house services such as loss control inspections, will all help in keeping the XMOD as low as possible.

As we start 2025, now is the time to make positive steps toward navigating these two major insurance markets. Your first step can be a conversation with our landscape and tree care green team to review and advise on your fleet safety protocols, best practice safety techniques, and how managing these well can dramatically reduce insurance premiums and your bottom line.

To discuss how the auto and workers’ compensation market will affect your company, contact me at (619) 438-6905 or ggarcia@ranchomesa.com.

Most Commonly Reclassified Lawn Care and Landscape Workers Compensation Governing Codes

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

The year 2025 will mark my 10th year working with landscape, lawn care and tree care professionals across the country. This long-term approach allows our team the time to learn and grow with the industry. Being able to understand landscape operations and accurately relay this information to the insurance carriers is a critical component to the overall insurance program we put together for our clients.

Insurance carriers almost always audit policies at the completion of the term to reconcile estimated payroll versus earned payroll, and return or collect any additional premium. For workers’ compensation purposes, in states that are under the National Council on Compensation Insurance (NCCI) rating bureau (in which there are currently 35), the two major class codes used by landscape professionals are 0042 Landscape Gardening and 9102 Lawn Care Services. Each code applies to specific job duties; they have different rates per $100 of payroll; and, when the employer can clearly allocate payroll, both codes can be used. Without clear payroll records, however, the insurance carrier can consider summing all payroll into the higher tier.

The 0042 Landscape Gardening classification is considered a construction code and should be used for the new installation of landscapes. However, 9102 Lawn Care Services is not a construction code and should be used for the maintaining and servicing of existing landscapes. The difference in rate, depending on the state(s) in which you operate, can nearly be double for 0042 versus 9102. It is critical to clearly understand when to use each class code to avoid any misclassification that could disrupt cash flow during the policy or surprise you at audit with an additional owed premium.

The nuance of class codes for workers’ compensation does not stop here. Landscape professionals within NCCI states have nearly five or six other codes to consider for their operations, all with specific duties and varying rate. In addition to workers’ compensation codes, general liability policies use a similar system to differentiate services in order to collect adequate premium.

So, in order to avoid reclassification of payroll at the end of a workers’ compensation policy term, keep accurate records and talk to your insurance advisor.

For a more detailed discussion about your operations and the corresponding class code assignments, please reach out to me at (619) 937-0200 or drewgarcia@ranchomesa.com.

Advising Indemnification Agreements with Charles Stec, J.D.

In the second episode of a special two-part series, Executive Vice President Daniel Frazee interviews Charles Stec, J.D., accomplished attorney at Lanak & Hanna, to advise construction companies on what to include in indemnification agreements.

Daniel Frazee: Welcome back to StudioOne™ everybody. We're happy to be joined again by Charles Stec from Lanak and Hanna. We're going to change the conversation a little bit. Charles was nice enough to talk with Drew Garcia, our landscape leader about sub-contract agreements. We're going to shift into indemnification So, welcome back to the studio, Charles, and thanks again for joining us.

Charles Stec: Thanks for having me back. It's my pleasure.

DF: Okay, well, let's talk about indemnification agreements. More specifically, tell our listeners what should go through their minds when they hear that word indemnification and how it may impact them in construction?

CS: So indemnification is a big legal word that simply means a promise to pay for damages or defects that arise from your work.  The bigger concern lately because of the cost of litigation is that there is a duty to defend also included with a duty to indemnify. What that really means is that if there's a claim, you end up being responsible to pay for the legal fees and costs of the person that's making that claim against you. And those costs, especially in smaller claims, can sometimes exceed the value of the actual damages at issue.

So an indemnification provision in a contract can be used to really define who is going to be responsible and to tell a subcontractor that they're responsible for damages that arise from their work. But how we write that provision can very much impact how it will be interpreted and what your actual allocation of responsibility will be.

DF: Okay. So, furthering that part of what you're talking about, can you provide us with an example how indemnification, when worded a specific way, can negatively impact, let's say, a lower tier trade that we might represent?

CS: Sure Daniel. Let’s take a drywall subcontractor as our example. If our drywall subcontractor has an indemnification provision as contract, that ultimately says that he is responsible to defend and indemnify for claims arising from or any way related to his work, then if we had a scenario where there was a water leak from the roof, from plumbing, whatever it is, and it ultimately results in the wall that's dry walled having buckling or mold, then in the event of a claim, that drywall subcontractor could arguably be responsible to indemnify and defend because our provision says in any way relating to his work.

But if we rewrite that position to just say he's only responsible for claims that arise from the negligent performance of his work. Now, in our scenario of the water leak, his duty to indemnify and to defend won't be triggered because the claim ultimately comes from a water leak, not from something wrong with how the drywall work was installed

DF: Okay, that makes sense. And I'm going to go a little off cuff with you, but I want to better understand because I think we have a lot of clients that have concern with redlining contracts, right? They're working with a preferred contractor, a really solid relationship. They don't want to disrupt that. So in your experience, when there is pushback, when there is redlining of contracts, how do most general contractors respond to that when you insert that type of wording. Does it depend on the general or is there some reasonable compromise that you've seen?

CS: So I've actually seen mostly reasonable compromise. I think everybody knows that a contract is ultimately supposed to be negotiated at arm's length. It's supposed to be the two parties are negotiating their position. What people are afraid of as a subcontractor is, "Oh, I'm not going to get the work because I'm not just accepting the contract as it is." But in that scenario, that contractor is running the risk that you're going to argue later that this was a contract of adhesion. Take it or leave it and therefore it's not enforceable. So they're typically open-minded and I have many, many a times in my recent past found myself on the phone with the general contractor's lawyer and we negotiate the few positions that are disputed in a contract. They expect it and for the most part if your requests for revisions are reasonable, they're going to get accepted.

DF: Very helpful. That's very helpful. So let's continue looking at indemnification clauses from a subcontractor's perspective. Walk us through what they may see in a typical contract and some specific examples, again, back to redlining or changing language that can minimize their exposure.

CS: So all contracts are a little different, and every one of these indemnity provisions has been written by different lawyers, so they're all a little different, but I'll give you kind of a general idea of what one normally sounds like. So my example is, “subcontractor agrees to indemnify and hold harmless the owner, contractor, and their agents, and any entity or person for which the contractor is responsible per the contract documents, from and against any claims, damages, or losses, including attorney's fees and costs arising from or in any way related to the subcontractor's work.”

So using my example, there's a few things that you would want to consider redlining with that provision. The first is the vague description of who you're promising to either defend or to indemnify. So in our example it said any entity or person for which the contractor is responsible. Well that's not defined and that creates a very real possibility that you could find yourself either having to provide defense fees for--or indemnity--to parties you've never even met and having to pay potentially multiple defenses. So in that case, I would strike that language in its entirety and instead make sure that each of the people that you were agreeing to identify are clearly defined. Normally that's going to be the prime contractor and the owner only. There may be some scenarios on certain jobs where you would agree to someone else, but it should be defined so you know who and what responsibility you're taking on.

DF: Okay.

CS: In our same example, another consideration is you could add language excluding liability for the owner or the general contractor's negligence. So let's talk about what that would be. For example, if the owner knows there's an unsafe condition there, there's a hole in the ground, a bad step, whatever the case may be, he doesn't tell anybody about it and leaves it there and one of your employees gets injured. Excluding that liability would make sure that the owner becomes responsible and you're not indemnifying the owner for your employee or some other person's injury that's actually coming from a condition the owner knew about and left there and didn't tell anybody.

Similarly, if another contractor on the job has done something that is so poor that it is potentially a danger either to other work or to cause injury. Let's say framing was done with a too small of a header and nobody knows that one day comes crashing down. That would be an example that if the contractor knew that their other sub had put in that bad header and didn't tell anybody that you would want to exclude that damage. So I definitely recommend adding language, excluding the gross negligence of either the owner or the contractor.

DF: Okay, all right.

CS: And a final example, it goes back to the defense costs. So in every contract for indemnity, the law implies this duty to defend. And the duty to defend arises at the time that they tender it to you, they say we've got a claim against us. And so you're now paying the legal fees of somebody else before the claims ever resolved and it's determined whether or not you did anything wrong.

Now, in our example, it said attorney’s fees and costs and you could imply that that is that duty to defend, but simply striking that wouldn't be enough, because the law actually implies the duty in to any contract of indemnity. So you have to specifically excluded it. So what you could say is I have no duty to defend a lot of times though Your contractors and owners might reject that. So what we could also consider is limiting what that duty to defend to be.

Two possibilities you could talk about is; saying that you will only agree to pay your proportionate share of the potential defense costs based on your proportionate share of the potential damages so that it's now shared amongst other subcontractors or of the contractor whoever else might be involved in the particular accident or event. The other would be to put a limitation of liability provision in where you could say our liability is either limited to what insurance proceeds pay or even to a specific dollar amounts. I've seen people say let's put it to the total amount that I was paid on the project or a set number like $100,000. Those types of provisions can help limit that defense cost that you ultimately could see picking up from an alleged accident.

DF: Okay, all right. Thanks for kind of going into that detail. Very helpful for our subs to understand some areas to be focusing on. So, if you look at indemnification clauses from a direct contractor's perspective on commercial and service contracts, what should they be watching out for and how can they redline or a change language that can minimize their exposure?

CS: Sure. So, obviously, when you're talking about these direct contractors, those on a commercial or a service agreement, their relationship is a little bit different. So they're now no longer a subcontractor lower down in the chain, but they're in a direct contract, probably with the project owner. So a lot of our discussion before on subcontractors would still apply, but there's a few other things that you might want to look at as well.

First, I've seen in a lot of direct contracts lately that in the indemnification provision, one of the parties to indemnify that owners have been adding is the design team, either the architect or the engineer. Those should be excluded because as the contractor--unless we're talking about a wholly different subject, which is design build agreements--the contractor has no control over the design. They're not able to influence how it's done, how it's built, or most of the times the design's done long before they ever get there. So to indemnify the design team doesn't make sense because it's not someone that you ever had any ability to control the quality of that work. So I think that those should be excluded, be redlined out, and also you would consider adding a phrase that says something to the effect of the contractor is not responsible for claims that arise from design defects or design errors or emissions. You don't really want to be taking on liability for a designer that you didn't have any business with and you're not in contract with.

DF: That makes sense.

CS: Another example that I've seen is that a lot of these indemnification agreements with owners are very broad. They say all claims, damages, liabilities, or losses and the problem is it doesn't clarify for what claims. Are we talking about claims from the owner or claims made to the owner? So what I've been recommending lately is that in those broad indemnity provisions, that it be revised to say for third party claims. That way the owner can't sort of hodgepodge the indemnity provision into a requirement to you to pay their defense fees to sue you. So that's a revision that we've seen come up more often than not lately.

Another that really is beneficial and it sort of goes back into the design question from a minute ago is putting in a reverse indemnity provision. So in a lot of projects, the owner provides to the contractor a set of plans, maybe some reports, some geotechnical reports, whatever the case may be, and the contractor does their work based on those reports. In a reverse indemnity provision, the owner agrees to indemnify the contractor for errors and emissions in those reports. So let's take for example, you are doing, you know, subterranean grading and there is a retaining wall to hold in that subterranean dig if the design plans didn't build a big enough set of supports and you build what's in the design plans and it fails, you shouldn't be the one responsible for that failure because it's the design, not the construction. So the reverse indemnity provision would then make the owner responsible to go to that designer for that claim rather than come to you as the contractor.

DF: Okay, all right.

CS: Finally, there are a lot of other ancillary provisions in a contract that read together with the indemnity provision can help minimize your liability. We talked about two of them with the subcontractors. That's a consequential damages waiver, those indirect costs that may come up. And the other being excluding damages for latent defects. We talked about it in the underground, an unknown type, things you wouldn't know there, like utility or box. Those types of provisions you could consider having in there and they would define when your indemnity would kick in.

Others that you could talk about adding would be a clearly defined delay provision. If your project is running late, who's responsible for that or defining what the damages would be and maybe setting a liquidated damages amount on a daily rate or a monthly rate. So at least you could control your risk because you know what that potential damage would be if it runs late.

And finally, it would be a provision limiting what recoverable damages could be, either to insurance proceeds or the maximum amount of liability, like we discussed earlier.

So the main point is that every construction business is a little different. And it makes sense to tailor your contracts to the type of trade that you're in, the type of jobs that you're doing, they could be public, they could be private, and there's different risks and allocations that come with those different types of projects. So in my belief, a little bit of foresight in working with your contracts in advance can really help control your risks in the event that something does go wrong in the future.

DF: Well, and I think Drew alluded to it too, that your process of being out in front of this and proactive really aligns with how we interact with our clients trying to mitigate risk on the front end. But so often we get feedback that sometimes crosses that line of insurance to legal, where we can comment and provide some feedback, but we don't have the expertise that you do in the background that can really help them truly negotiate these contracts or just tighten up everything that they have with respects to sub-agreements and/or indemnification.

So these bullet points are so helpful for us and our team, and I can't thank you enough for sharing this. I know this is just the tip of the iceberg too. I know what you do for many of our clients is so effective. Tell us again, if people need to connect with you, what's a good way to start the dialogue?

CS: Well, again, thank you for having me here today. It's been a pleasure. You're absolutely right. It is the tip of the iceberg. There are so many different things we could talk about. We could have gone on for hours. I really do like to tailor to a specific contractor's needs. So the best thing to do is literally to reach out. We're available by phone, consultation is free, I can be reached at my office, it's 714-451-7919, send me an email, that's ckstec@lanak-hanna.com or you can go to our website, which is Lanak-Hanna.com.

I say it all the time and I'll say it again here, I think that a little bit of upfront attention, a small amount of money you spend consulting with a lawyer. If it saves you from one lawsuit, it's worth every penny.

DF: Agreed and I think that's been consistent with the clients that have partnered with you and I think they would say the same thing. So thank you again and thanks to our listeners for joining us again in this series and we'll see you next time.

Catch Up on Part 1

Navigating Subcontract Agreements with Charles Stec, J.D.

In the first of a special two-part series, Executive Vice President Daniel Frazee and Landscape Group Vice President Drew Garcia, interview Charles Stec, J.D., accomplished attorney at Lanak & Hanna, to discuss how construction companies can best navigate subcontract agreements. 

Daniel Frazee: Welcome everyone and thanks for joining us. I am Daniel Frazee, the construction group leader and we're back in StudioOne™ with Drew Garcia, our landscape group leader. Welcome Drew.

Drew Garcia: Dan, good morning. How you doing?

DF: Doing fantastic. We're really excited to be joined by Charles Stec, an accomplished attorney supporting the construction industry with Lanak and Hanna. Charles is here to share his experience in representing California trade and general contractors, which includes several of our clients. And more specifically, I think we're going to get inside two important but very distinct topics, subcontract agreements and indemnification. Welcome, Charles, to StudioOne™.

Charles Stec: Thanks for having me, it's my pleasure.

DF: So before we get started, Charles, tell us more about yourself and how you became so focused in the construction industry?

CS: Well, I actually got my start in the trades. I worked as a roofer back in the 90s and 2000s and worked on a lot of different projects: residential, commercial, public projects. Ultimately I still have and maintain a general contractor's license and when I got into the law I ended up gravitating back to construction both because of my experience but also because I believed as a lawyer that I could help contractor clients navigate the pitfalls of the construction industry by getting involved earlier.

What I've noticed in my practice is that many contractors don't consult with an attorney until something goes wrong and they get sued. And at that point, they've already got the contract, says what it says, the facts are the facts. What I like to do is get involved earlier. And at that point, we can look at contracts, we can look at what's going on in a project, and try to assess risks and minimize risks. So the firm I work for, Lanak and Hanna, were really a one-stop construction shop. We handle everything that's related to a construction business. So from the outset, we handle, for example, the contracts, but also bids during the project, labor issues that might come up. And at the end, collections such as stop notices and mechanics liens, or in the event something goes wrong, defending against a defect or a damages claim.

DG: Very good. Yeah, I think we can relate with your guys’ proactive approach to business and how you're trying to kind of consult with your customers in advance of an issue and obviously when there is an issue reacting to it and making sure that you're there for them. We take a similar approach to the way that we do our business. And when we jump into subcontract agreements you know Rancho Mesa we've got a number of different businesses that we help support. We could have general contractors; we could have trade contractors that are a part of a project. We've also got service contractors that might be subbing out small portions of their work where it might not be as glaring or they might think there's not a need to have a subcontract agreement.

Obviously, it's important. Can you talk to us about why the sub contract agreement is an important step in the relationship between two service partners and how it provides clarity?

CS: Sure, Drew. Let's start with the basic, what is the purpose of a contract? Really the purpose of a contract is to allocate risk by defining the rights and responsibilities between your two service providers to avoid disputes that are caused by misunderstandings or to set forth what's going to happen if something actually does go wrong. So generally what we see a lot of in the most common disputes between contractors and subs or a service provider and their subcontractor is simple things like payments, or what happens when there's extra work. So a subcontract agreement can be used to put those things into writing and set forth those basic terms; what that subcontractor is going to get paid, what the specific items that are included in their scope are, so if there is extra, we can define what is and what isn't extra, and then how that subcontractor is going to get paid. Are they getting paid on a progress payment, or are they getting paid on a lump sum when it's done?

If something does go wrong, the subcontractor agreement also has the benefit of setting forth how it's going to be resolved. For example, if that subcontractor doesn't finish their work or they get terminated, who's responsible for the cost to complete that work? Another example would be if there's an injury or damages that come from their work, how do we apportion that responsibility? And another example after that would be If something does go wrong and we can't resolve it, what's the procedure going to be? Are we going to go to litigation and spend years in court? Are we going to consider arbitration, which might cost us a little more upfront, but could get to a resolution faster?

The main point is a subcontract agreement is giving you an opportunity to allocate your risks, which allows you to better bid a project. If you are taking on a lot more risk, you're probably going to want to charge a premium for that risk. On the opposite side if you are passing that risk on to your subcontractor perhaps then you might be able to bid at a tighter rate. So a subcontract agreement's big main purpose is to really define things so that we know what's going to happen rather than leaving it up in the air.

DG: Well, so that makes sense. And when somebody's putting together a subcontract agreement, maybe it's the first one that somebody like you is putting together for a business. Is it kind of a, “hey, this one agreement fits all types of work that you might subcontract” or should the business look at more of a focused approach in terms of the type of work that they're subbing out or the type of project that they're on? Would that bring any nuance to the subcontract agreement?

CS: It would. So there's really two answers to your question Drew. First, yes, there are many general provisions that you're going to use through all your different types of subcontractors. Those are going to be those basic provisions like price, payment methods, what's the scope of work, how do we handle change orders, what's that procedure and the notice, maybe schedule and your insurance requirements.

But second, there's going to be some provisions that really are specific to the type of work you're subbing out. So take for example, if you're subbing out work where people are working in the ground, they're doing digging, they're doing trenching, they're planting materials. There's a large possibility that you could have unknown obstructions, whether there's big rocks or boulders in the ground or there's an unidentified utility. You might want to have a provision then that's going to assign who's responsible for those unknown encounters? Is it going to be the subcontractor who's then going to price it higher to deal with their risk of the unknowns? Or is it going to be the general contractor? Or is it going to be the owner? And that's going to affect both your pricing and bidding on the project, but it's also going to affect when that comes up, how do you deal with that dispute? Having that provision in place allows you to have the answer so you don't actually have to have a dispute and go to litigation.

Comparatively let's imagine that your subcontracting out work like roofing or windows or plumbing. Those come with the possibility of a water intrusion claim, there could be a leak there could be a burst pipe. So first and foremost we think well damages from that would probably be covered by insurance but there are other things that aren't and that's going to be those incidentals. For example, if you have a plumbing leak and it's in a residence or in a business, there's a possibility that owner is going to make a claim for loss of use or for a loss of profits because they haven't been able to operate their business. What we would want to then consider is whether or not you should have a consequential damages waiver that essentially says if there's these other indirect costs like the loss of use or like the loss of profits, who's going to be responsible for that? Is that going to be the owner or is that going to be the contractor or the subcontractor that caused the damage? And again, that's going to allocate to you how do you want to price this project? Because your bid is probably going to be affected by how much risk you're taking on. So those are two possible provisions that you might want to make more specific to your individual subcontractors and the type of work that they're doing.

DG: Got it. So obviously having open dialogue with a professional like yourselves in terms of what the project might look like for the business helps to kind of cater to the subcontract agreement or the specific needs of that agreement.

So in general, how often should somebody relook at their, the general provisions of their subcontract agreement that might be unanimous across all of their agreements? Is it an annual thing, bi-annual? Is there a recommendation in terms of how and those things should be re-looked at and revisited?

CS: Well, we generally recommend having your contracts re-looked at yearly. Now, some years there might be nothing to change, but other years there could be. The issue is the law is constantly evolving. So what the regulations are out there, whether it's from the CSLB or it's going to be from decisions from the court, are going to change over the years.

Let's take example, most common thing, pay. In the last several years, we've seen many revisions. Going back, not long ago, if paid provisions were allowed, which essentially said that the contractor and the subcontractor would share the risk that the owner doesn't pay. California has since prohibited those and said, no, that's not reasonable., it's against public policy, we want subcontractors to get paid. So now those are prohibited. Yet I still see them in contracts all the time that haven't been updated.

Similarly, California does allow pay when paid, which says that the subcontractor’s payment can be delayed until the contractor is paid by the owner. We saw just in the last couple of years, the court come back though and find one scenario where it decided to limit those provisions. And specifically, it was a lot of these provisions were being written to say that if the owner and the prime contractor got into a dispute, that the subcontractor had to wait to get paid until that dispute, whether it was litigation or arbitration, was resolved. Courts came out and said, that's not reasonable because it potentially makes that subcontractor who may have nothing to do with the dispute have to wait for payment for even years until that litigation is resolved. So the court said now that “pay when paid” provisions have to be reasonable. So I've been recommending in the last couple of years’ revisions to contracts to define what that reasonable period is.

So the answer to your question is ultimately contracts should probably be reviewed yearly. Some years it's going to be more, some years it's going to be less, but you want to stay up to date with the current codes, the current decisions, and the CSLB rules that are ever changing.

DG: Very nice. Now that makes sense. Last question, last subcontract question for you. So obviously having them is important, making sure that they are catered towards the work that you guys are, that you're putting into place. You know, I think the answer is probably obvious on this, when should that subcontract agreement be signed? But I'd like you to comment on that, but also what are some pitfalls if they're not signed before the project takes off? What are some concerns or what could that create in terms of, you know, future issues or maybe more immediate issues if that agreement isn't in place before the project takes off?

CS: Well, I think starting off, I would say what we've been talking about assigning risk and responsibility is really going to impact your pricing. So I would recommend having those agreements signed early.

What a lot of my contractor clients have been doing is they're doing master subcontractor agreements where with the regular vendors that they're using, they have an overall agreement that sets forth the terms and conditions and their assignment of risk and how they're going to deal with problems that they typically would foresee in an agreement that gets signed long before there's ever a job in place. Then when there's a particular job, they'll issue a purchase order and that purchase order will just incorporate the terms and conditions of that master subcontractor agreement. That's a really good place to be because then when you are bidding on a project, you already know how you are allocating risk amongst yourself, your subcontractor, and the owner, and you can price accordingly.

DG: Yeah. Again, it makes total sense.

DF: Okay. Well, tell us if people need to connect with you, what's a good way to start the dialogue?

CS: Again, thank you for having me here today. I can be reached at my office, it's (714) 451 -7919. Send me an email, that's cksetc@lanak-hanna.com or you can go to our website, which is Lanak-Hanna.com.

DG: Thank you again and thanks to our listeners for joining us and we'll see you next time.

Continue to Part II

Umbrella vs. Excess Liability: The Key Differences Contractors Need to Know

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

When reviewing insurance requirements that contractors receive from municipalities and/or general contractors, two lines of coverage that are often misunderstood are umbrella and excess liability. These terms are commonly interchangeable in the contract, but have subtle differences. In addition, the limits required by contracts are increasing significantly.

Excess vs. Umbrella

An excess liability policy has two primary functions: it provides excess limits above the underlying liability insurance limits and replaces underlying insurance limits as aggregate limits are exhausted; the excess policy will be subject to the same coverage terms, conditions and exclusions as the underlying policies. This is what is called follow-form.

A commercial umbrella liability policy has three primary functions: it provides excess limits above the underlying liability insurance limits; replaces underlying insurance limits as aggregate limits are exhausted; and offers broader coverage than primary policies for certain losses which would be subject to an SIR or self-insured retention.

Why are they important?

A commercial umbrella or a properly structured excess policy will sit above a contractor’s existing policy’s general liability, auto liability and employers’ liability limit. This protects contractors from large unexpected losses that can have devastating financial impact on the company.

With the dramatic rise in costs of insurance claims the last few years, either from social inflation or third-party litigation funding, multi-million dollar settlements are becoming more frequent. For example, if one of your employees is in an auto accident that causes severe bodily injury to multiple people, the legal and medical costs incurred could very easily exhaust your primary auto liability limit very quickly. Umbrella or excess policy limits would be available cover those losses.

So, when reviewing a contract, pay close attention to the umbrella or excess insurance requirements, and ensure that you understand the subtle differences of how they can impact your bottom line if there is a claim.    

To learn more about these specific coverages and how they can be incorporated into your current insurance program, reach out via email to sclayton@ranchomesa.com or (619) 937-0167.

Maximizing the Value of Your Next Loss Control Visit

Author, Rory Anderson, Partner, Account Executive, Rancho Mesa Insurance Services, Inc.

There are a few different reasons for a carrier to schedule a loss control visit. Sometimes, a carrier may want to perform a loss control visit before they quote your insurance. However, for the purpose of this article, I’d like to focus on the loss control service offering provided directly from your current insurance carrier.

From the perspective of a tree care business owner, uncertainty, skepticism, and hesitation are often the most common initial reactions to an insurance carrier loss control visit. However, these visits should not be seen as a negative process. Instead, they present an opportunity for tree care business owners to enhance safety protocols, reduce risks, and ultimately improve their insurability.

Loss control specialists have dedicated their careers to understanding risk and safety, and are committed to make the workplace safer. By engaging with the loss control specialist and reviewing their recommendations as constructive guidance, tree care companies can make valuable changes that not only improve their risk profile, but also potentially lower insurance premiums.

To get the most out of a loss control visit:

• Set clear objectives. Establish goals and determine what you would like to accomplish. Communicate your objectives of the visit with your team members and the loss control representative. It is a good idea to engage your key employees and involve your team. Your safety officer, fleet manager, and crew leaders should be present. This will encourage participation and help cultivate a culture of safety.

• Share information.  Have your safety programs, training records, maintenance records, and any other safety information ready to share. Discuss any safety incentive programs and/or initiatives set forth by management.

• Maintain an open mind and practice humility. Welcome feedback and approach the visit with a positive attitude. View the loss control specialist as a partner and be open to recommendations.

• Conduct a walkthrough and jobsite visit. Tour your facility and visit a jobsite, unannounced. It is best to drop in on your crews without them knowing you will be there. This will provide real insight into your operations, accountability, and identify gaps in safety compliance.

• Document recommendations. Most of the time, your loss control representative will generate and send to you a report for your records. However, if that is not the case, make sure to record key points and suggestions.

• Create an action plan and prioritize changes. After the visit, review the recommendations with your team and prioritize the changes and completion of your plan within a certain timeframe.

• Build a relationship. Stay in touch after the initial visit and maintain communication with the loss control representative to discuss ongoing safety improvements and updates.

Maximizing a loss control visit strengthens your business by improving safety, reducing insurance costs, and maintaining a long-term relationship with your carrier partner. It is easy to view loss control visits as a chore or another task to check off the to-do list, but doing so overlooks the valuable insights the loss control representative can offer. Instead, try to view it as a partnership so you can leverage the representative’s knowledge to improve workplace practices and create a safer and more efficient operation.

To discuss how your tree care company can make the most of a loss control visit, contact me at (619) 486-6437 or randerson@ranchomesa.com.

Three Industry Benchmarks all Landscape Companies Should Track

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

There are three major benchmarks that all landscape companies should consider when looking at how well they manage risk.  The three benchmarks are your:

• Average Claim Cost

• Claim Indemnity Rate

• Claim Frequency Rate

Knowing the importance of this, we designed a key performance indicator (KPI) dashboard that highlights these industry benchmarks, as well as compares them against other landscape companies in their geographic area.

We have pulled data from all landscape companies using the 0042 class code and have come up with some industry averages.  For the sake of this example, we will use California landscape contractors only. 

In California, the average claim cost for landscape contractors is $50,300 per 1 million dollars of landscape payroll.  In other words, on average for every 1 million dollars a landscape company has in the 0042 class code they should incur about $50,300 in claim cost. That number would rise to $100,600 in claim cost if a landscape company had 2 million dollars in 0042 class code. 

The next major category to consider would be indemnity rate.  Indemnity rate, or claims that result in lost time and temporary disability, the industry average is 0.7 claims per 1 million dollars of 0042 payrolls. 

Finally, the last category we consider is frequency rate.  In California for every 1 million dollars allocated to the 0042 class code on average that company will have 1.5 claims.

Knowing the data will not only give your team a good indication of how safe your company is, but these categories also play a significant role in determining work comp premiums.  There are several underwriting metrics a worker compensation underwriter takes into consideration when looking at a prospective business.  The Experience MOD, loss history, and of course safety protocols and procedures to name a few. 

The other major metric that underwriters are looking at are these three benchmarks: , average claim cost, indemnity rate, and frequency rate.  Simply put, the better a landscape company scores in these critical metrics, the better chance that an underwriter will add schedule credits to lower the worker’s compensation premium.

Now is a great time to see how well your landscape company stacks up against your peers, and consider any internal options to improve your metrics in any of these three major categories.

Digitalizing Risk Management: A Step-by-Step Guide for Getting Started

Author, Alyssa Burley, Partner, Media Communications & Client Services Group, Rancho Mesa Insurance Services, Inc.

Imagine you are working in a highly productive organization. Over many years of trial and error, the team has streamlined their operations to the point of a well-oiled machine using good ol’ paper and spreadsheets. Then, your insurance broker offers a digital risk management solution and you are faced with the prospect of transitioning your manual processes to a digital platform. This is the scenario that many Rancho Mesa clients have faced and successfully overcome.

Mobile applications have become an integral part of daily life by streamlining everything from banking to finding a ride in the city. Manual tasks can now be completed easily from a mobile device. So, why haven’t most businesses implemented this mobile technology into their daily operations?

Planning & Support

Transitioning a manual process, like the administration and documentation of toolbox talks, safety trainings, jobsite inspections, and other risk management activities, to a digital platform does not have to be a daunting task, though it may seem that way at first. With proper planning and support from those who have helped others digitalize their manual processes, you can significantly increase the chances for success. Utilize resources like Rancho Mesa’s client services team to provide best practices for each manual process that will be replaced by a digital platform.

Where to Start

Once an organization has decided they are ready to make the move to a digital platform, they often ask how they should begin. It is a best practice to start digitalizing a process that has few barriers to implementation, yet will still have a significant impact on operations. Therefore, utilizing digital toolbox talks (e.g., tailgate talks, safety meetings, and the like) is typically the best process to tackle first.

Next, review your existing toolbox talk process and document the steps. It may be helpful to ask the following questions:

• Who decides which topics will be used each week?

• Where is the content sourced?

• How is the topic content distributed?

• Who administers the toolbox talk (e.g., tailgate talk, safety meeting, etc.)?

• Where are the toolbox talks performed?

• How are employees tracked who participated in the toolbox talk?

• Where is the documentation stored?

The answers to these questions will help you identify who will need access to the toolbox talks in the digital platform, whether through an administrator website or a mobile application.

Then, identify one to three people in the organization who are excited about being an early adopter of the new technology. They should be excited at the prospect of streamlining the manual process of getting the toolbox talk content each week, performing the safety meeting, passing around the sign-in sheet, and making sure the signed paper makes it back to the office and in the correct file cabinet. These early adopters could be an administrator, foreman, supervisor, or safety manger, depending on who is responsible for performing portions of this task.

The early adopters will function as the organization’s initial testers, cheerleaders, and then coaches for the rest of the team. They will test the digital process by accessing toolbox talk content and documenting the meeting attendance with both pictures and signatures from their mobile devices. They will report back to their organization’s leadership on how the new process is working. This gives the organization a chance to work with their insurance broker’s client services team to offer suggestions for minor adjustments to the new digital process. Meanwhile, the early adopters will naturally promote the new technology to their co-workers and get others excited for the launch of the new process.  

Once the new digital toolbox talk process is tested and adjusted as needed, it is ready to be released to the rest of the organization. There will be a learning curve, but the early adopters will be familiar with how the streamlined digital process works and will act as informal coaches for new users of the platform. 

Benefits

Changing a well-established process can cause some people within the organization to question why the change is needed in the first place. So, be prepared to explain the reasoning behind the transition. Explain the benefits that will be felt by both the employee and the organization.

Employees will spend less time on paperwork, so they can get back to their other job responsibilities. No longer will a supervisor have to worry about where the sign-in sheet went from yesterday’s safety meeting. All the documentation is digitally uploaded to the cloud and instantly accessible to those who need it.

The organization can ensure compliance with the Occupational Safety and Health Administration’s (OSHA) safety meeting requirements and eliminate lost paperwork. No longer do organizations need file folders full of sign-in sheets with, unfortunately, illegible signatures. Digital records are easily accessible and filtered by date, project, topic, etc. in order to streamline the process of retrieving data.

All of these things save time, effort, and increases compliance, which ultimately translates to reduced costs.

If your organization is ready to make the transition from paper to digital, contact your Client Technology Coordinator for more information about Rancho Mesa’s proprietary SafetyOne™ mobile app and website.

Don’t Wait Until It’s Too Late: Notify Your Insurer of a Claim Right Away

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

Rancho Mesa’s commercial clients purchase insurance to transfer financial risk to a third party and protect their business against claims of liability. These clients rightfully expect their respective insurers to fulfill the obligation found in black and white on the Insurance Service Office (ISO) general liability form that reads “We will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies.” So, what must a policyholder do to ensure this obligation is fulfilled?

Most importantly, following a known event, policyholders should not wait until served a lawsuit. Per the policy conditions, the policyholder must notify the insurer “as soon as practicable” of an “occurrence or an offense” which may result in a claim. Failure to do so can result in a breach of duty and forfeiture of coverage for that claim.

When reviewing policy coverage and terms in proposal meetings with their broker, clients often voice concerns about what types of occurrence require notice, how a notice to an insurer will impact future coverage and premiums, and how quickly is “as soon as practicable.”

Per the ISO general liability form, “occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

Various court cases and legal precedent do not provide a clear reporting timeline. It is safe to say policyholders do not want to find out how late is too late to report a claim. Report the incident without delay.

Having some apprehension in reporting the incident due to potential rate increases is common and understandable, but should not come into play at the expense of triggering coverage. It is also true that most insurers do not weigh reported incidents or notice only items when underwriting the risk. In contrast, claims, or matters where a third party actually alleges the policyholder is responsible for damages, will have significance to the underwriter. When determining how or when to properly provide notice to the insurer, your Rancho Mesa service team can educate and advise on how best to proceed.

For more information on a policyholder’s obligation to report an incident or to ask questions about your current policy, please contact me at (619) 937-0175 or sbrown@ranchomesa.com.

Return of the Rush Hour: Avoid Increased Risk with Safe Driving

Author, Megan Lockhart, Marketing & Media Communications Special, Rancho Mesa Insurance Services, Inc.

As students return to the classroom, the back to school traffic has also resumed. With more cars on the roads, this leads to more risk for commercial vehicles making their daily commutes.

By the time Labor Day passes, most school districts and universities in the nation have started classes again, and with that, an increase in traffic in the mornings and afternoons has also resumed. The roads are flooded with school buses, parents, carpoolers, and college students rushing to their destinations. At the same time, the normal work commute continues, including many commercial and company-owned fleet vehicles.

In 2021, the National Highway Traffic Safety Administration reported that the rate of large truck fatal crashes was highest in the months August through October.

In order to keep their drivers safe, employers should educate their employees on the added hazards on the road this time of year and revisit training topics related to defensive and distracted driving.

The SafetyOne™ platform offers driver safety resources to help employers prevent auto accidents, with many toolbox talks and a library of online training courses. 

Additionally, anyone can register online for Rancho Mesa’s Fleet Safety webinar with dates throughout September and October.

To learn more about driver safety resources, contact your client technology coordinator.