Why Would a Contractor Purchase Employment Practices Liability Insurance?

Author, Kevin Howard, CRIS, Account Executive, Construction Group, Rancho Mesa Insurance Services, Inc.

Insurance is often considered a necessary evil by business owners. It can represent a significant line item on a profit & loss statement rivaling the cost in some cases of payroll, material costs and rent. With deductibles that can range from $15,000-$25,000 per claim, why then would a business spend dollars on an insurance policy that is not required by either state law or part of any general contractor’s insurance specifications?

What does an EPLI policy cover?

Employment Practices Liability Insurance (EPLI) policies typically extend coverage to the following:

• Wrongful termination of an employee who alleges violation of their contract;

• Sexual harassment claims by one employee against another;

• Wage related claims by employees who allege denial of overtime pay or tips, or working “off the books." Note: Most carriers offer a defense only sub limit for this type of claim;

• Claims of unequal or unfair pay between employees performing the same job and having similar skills, education, seniority and responsibility;

• Discrimination claims based on age, race, gender or sexual orientation;

• Third Party. Example: Your employee out in the field of work upsets another subcontractor’s employee, a customer at their home, a student at a school enough to where they file a lawsuit against you.

Why do businesses resist purchasing EPLI?

Declining to purchase EPLI can stem from businesses feeling that they are not large enough for this type of claim to occur.  Many owners have close relationships with their employees and never believe any of the above scenarios could occur within their organization.  And yet, many more can assume that a General Liability policy would cover these types of potential claims when, in fact, most have specific EPLI exclusions. This type of thinking could result in losses that have severe financial consequences for your company. Let’s take a quick look at three common EPLI exposures facing the construction industry.

Common EPLI Claims in the Construction Industry

Rapid growth and layoffs are unique aspects of the construction industry that can cause the elimination of a specific position and/or termination.  With these ebbs and flows, contractors unintentionally open themselves up to wrongful termination cases which can carry into discrimination charges, as well.  It can also be common to see employees bring post-employment wage & hour claims, which center around improper overtime, breaks, etc.   Lastly, contractors' work very often involves interaction and exposure to the public.  This interaction can lead to comments, inferences, or specific actions that non-employees find offensive.  Claims brought by these third parties are difficult to prove when the employer is unable to witness the events first-hand.  

Light Bulb Moment

In these and other potential claim scenarios, employers without EPLI must outlay their own funds to find legal representation and fight the charges.  Legal costs add up quickly regardless of the documentation an employer has kept on file and the conviction they have that an employee’s claim is frivolous.  Defending yourself in today’s environment can become cost ineffective very quickly.  Light bulb moments can occur when EPLI limits are unavailable because coverage is not in force and an owner is staring at a “balance sheet loss,” resulting in a six figure settlement.

Consult Your Broker for EPLI Options

At Rancho Mesa, as it relates to coverage for our clients, we often say "you would rather be looking at it than for it”. That is, you want to be looking at a policy that will respond to coverage than for one at the time of a loss.  Take time to explore the nuances of employment practices liability insurance with a knowledgeable broker.  Allow an expert to educate you on the real exposure to your company, ask to spreadsheet different policy forms, deductibles and limits in an effort to balance the annual premium with the potential impact of a large loss.

For more information about Employment Practices Liability Insurance, contact Rancho Mesa Insurance at (619) 937-0164.

The Number 1 Reason a CPA Reviewed Financial Statement Can Benefit a Contractor

Author, Matt Gaynor, Director of Surety Bonding, Rancho Mesa Insurance Services, Inc.

One of the key documents required when we are assembling the Bonding Programs for our construction clients is a fiscal year-end financial statement prepared by an outside Certified Public Accountant (CPA).  Although we monitor internal financial information from our contractors throughout the year, at the fiscal year-end (usually 12/31), the bond company will require that the statement come from a third party CPA.  That way, they have some certainty that the information has been prepared by an independent financial source that has a background in working on contractor financial statements.

When working with a new client or raising the aggregate program for an existing client, we often discuss recommendations about what type of financial presentation (i.e., compilation or review) they should request from their CPA.  From a cost basis, the compilation may save the contractor a few thousand dollars.  Here is a description of each financial presentation:

• Compilation - the CPA takes financial data provided by the contractor and puts them in a financial statement format that complies with generally accepted accounting principles.  There are no testing or analytical procedures performed during a compilation.
• Review - inquiries and analytical procedures present a reasonable basis for expressing limited assurance that no material modifications to the financial statements are necessary and they are in conformity with generally accepted accounting principles. 

As a bond agent, I have noticed the historical decision point for when bonding companies ask for a contractor to upgrade to a review is when the single job size they are bidding exceeds $500,000.  Of course, we have many exceptions to this rule:

a. If the contractor rarely requires bonding and will only need an occasional $600,000 - $700,000 bond, a compilation is more than acceptable.
b. If the contractor has strong internal financial statements and only requires a bond less than $1,000,000 every few years.
c. If the contractor has a very strong cash position and a solid personal financial statement several sureties will require copies of tax returns but may waive the requirement for a CPA issued statement.

On the flip side, on several occasions we have used the future requirement that they upgrade to a CPA review at their fiscal year-end to provide approval for a bond they need now.  Under that scenario, both the bond company and the contractor have an understanding in place that the request for an upgraded financial statement will allow a positive approval to increase the bonding capacity in advance of the fiscal year end.

Keep in mind, it would be also be prudent to check with your bank to determine what level of financial statement they may require.  

In closing, for contractors looking to grow their business, it is best to provide a CPA review (and pay the extra money) then to risk not getting approved for that larger project or increased program.  It can also help to have a review as the owner starts to get a little further away from the numbers and they can get some level of comfort with a review as to the strength of their accounting system.

Talk to your bond agent and CPA now, to ensure all three parties are on the same page.

For more information about surety bonding, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164

Experience Modification Factors and the Pre-Qualification Process

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

As we enter 2018, government agencies, project owners and general contractors often require subcontractors to enter their pre-qualification process.  Many of these entities will look closely at your Experience Modification Rate (EMR).  

EMR is a numeric representation of a company’s payroll and claims history, compared to businesses in the same industry or standard industry classification.  EMRs create a common baseline for businesses while allowing for a surcharge when employers' claims are worse than expected and credit when employers' claims are better than the industry average.  More specifically, companies with an EMR rate of 1.00 are considered to have an average loss experience.  Factors greater than 1.00 are considered worse than average, while less than 1.00 are considered better than average.  

Pre-Qualification Process

In the highly competitive world of construction bidding, it has become more common that contractors can be precluded from the pre-qualification process due solely to above average EMRs.  This represents an oversight as many companies have strong, well-developed safety programs, yet their EMR is holding them back.  Some examples of this are:

1. EMRs are lagging factors. They only factor the last three policy periods, not including the current policy period.  
2. EMRs can include claims that may have been unavoidable and do not represent a lack of safety (i.e. an employee is rear ended by an uninsured motorist).
3. Large severity claims from smaller sized companies can impact the EMR much more negatively than a similar sized claims at a larger firm.
4. The effectiveness of claims handling may vary from one insurance company to another, thus impacting certain employers when cases remain open with high reserves.

Rather than placing such a critical importance on the EMR Rate, owners and contractors designing the pre-qualification document should include frequency indicators like incident and DART Rate (i.e., days away, restricted or transferred) forms.  These measuring tools incorporate current year totals and can provide up to 5 years of historical data.  Incident Rate calculations indicate how many employees per 100 have been injured under OSHA rules within the specific time period.  The DART rate looks at the amount of time an injured employee is away from his or her regular job.  Lastly, contractors attempting to become pre-qualified should have the ability to provide a detailed explanation should their EMR exceed 100.  This can include loss data, a summary of the company’s Illness and Injury Prevention Plan (IIPP) and code of safe practices, and more information on what exactly the company is doing to reduce future exposure to loss.

Given the importance of the pre-qualification process and the potential for contractors to be precluded from new opportunities to bid work, we’ve developed a “Best Practices” approach to assist companies in managing their EMR.  

Managing Your EMR with Best Practices

The Best Practices approach to high EMRs includes a total claim physical, claims advocacy, and implementation of the Risk Management Center. 

Total Claim Physical
The total claim physical accurately identifies your company's strengths and weaknesses, and then scores the company against others in the industry. It includes an audit of the EMR, analysis of claim frequency and severity, claim trends and determine root causes, provide quarterly claims reviews, and conduct pre-unit stat meetings.

Claims Advocacy
Utilizing a claims advocate can decrease existing claim costs, reduce excessive reserves, and expedite claim closures, which can reduce the EMR.

Risk Management Center
The Risk Management Center provides access to safety training materials and tracking, analysis of incidents and OSHA reporting, monthly risk management workshops and webinars.

For more information on managing your EMR before the pre-qualification process, contact Rancho Mesa Insurance Services at (619) 937-0164. 

Building an Effective Fall Protection Program

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

In a Census, summarizing fatal occupational injuries from 2016, those originating from falls continued a steady upward trend that began in 2011 and increased another 6% in 2016.  More specifically, falls increased more than 25% for roofers, painters, carpenters, tree trimmers & pruners.  Since 2013, fall protection citations have been #1 or #2 on OSHA’s most cited violations.  Now, more than ever, it is essential for employers with personnel who work at heights to provide comprehensive fall protection.

Job Hazard Analysis

While developing any type of new safety program, experts encourage breaking the process into steps.  These steps must be designed for all construction sites where exposure to height exists.  And the plan must be prepared by a competent (qualified) person, defined as someone with extensive knowledge and training on fall protection systems.  The initial step requires a job hazard analysis to be performed at the location in advance of work commencing.  The analysis can include determining the average & maximum height at which work will be performed, identifying the number of employees using the area, observing potential hazards that might compromise the work, and modifying work to reduce exposure.  According to the American National Standards Institute (ANSI), “the most desirable form of protection is elimination of the need to work from height” (Z359.2, section 5.1). 

Types of Fall-Arrest Systems

Assuming hazards cannot be eliminated and the need to work from height still exists, employers can implement both passive and active fall-arrest systems.  Passive systems can include examples such as guardrails or ladder cages while the more technical active fall-restraint systems can use specialized lanyards and anchors to eliminate fall exposure.  These require individualized training that is crucial for proper use and effectiveness.

Proper Implementation & Calculating Fall Clearance

Once you have identified the appropriate system for the jobsite, the implementation is critical to the success of the program.  Using the more complex active fall-arrest system as an example, employers can track their progress with four steps:

• Anchorage-the secure point of attachment to the fall arrest system.  The structure must be capable of supporting at least 5,000 pounds/worker or meet OSHA’s criteria of a 2:1 safety factor.
• Body Support-the connection point to the anchorage, commonly seen with a full body harness that distributes the forces of a fall over the chest, shoulders, pelvis & thighs.
• Connectors-examples include lanyards and self-retracting lifelines, devices that connect or link the harness to the anchorage.
• Descent & Rescue-all good fall protection programs must have a plan for rescue or retrieval of a fallen worker.  Employees need to be raised or lowered to a safe location when needed.

As employers build out their fall-arrest system, calculating fall clearance and swing fall hazards represent key components to a successful program.  In part, this can be achieved by determining sufficient clearance below the worker to stop the fall before he/she hits the ground or another object.  It should include an awareness of the anchorage location, the connecting system, deceleration distance, the height of the suspended worker, etc.

Training, Training, Training

Formal, written training programs only become effective tools when employers combine classroom knowledge with practical, hands-on experience.  Competent persons need to continually educate workers on industry regulations, proper equipment selection/use and ongoing maintenance standards.  This must be emphasized on a consistent basis so that workers understand the importance of fall protection as it relates to their own safety and that of the company.

Improving Your Risk Profile

Without argument, the most important reason for introducing a Fall Protection program is the safety and well-being of your employees.  Getting workers home safely at the end of every work day remains every employer’s ultimate goal.  A second goal for consideration is that of improving your company’s risk profile to the insurance marketplace.  If your construction firm performs work in excess of 2 stories, underwriters expect to see details on your Fall Protection program.   While just one aspect of a Best Practices renewal strategy, providing a copy of your program with training examples and site specific layouts can give insurance company underwriters the comfort level they need to deliver more competitive quote proposals. Allowing your insurance broker these reference points can help them engage more options which can lead to better terms and pricing, and lower overall insurance costs for your company.

As your company builds out safety modules and looks to refresh or develop new a Fall Protection program, look to Rancho Mesa Insurance and their Risk Management Center (RMC) for assistance.  The RMC contains endless content, program templates and resources for our construction partners.  Additionally, the Agency’s monthly offerings of industry specific trainings and webinars provides the education our clients need to stay ahead of their competition.

For more information about fall protection, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

4 Simple Steps for Passenger Van Safety

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

Many of our agency's social service and nonprofit clients serve an important function for individuals and families...transportation! Whether helping a physically challenged child get to school or embarking on a day trip to the mall with a group of adults with intellectual and developmental disabilities, it's vital to manage all risks associated with transporting clients.

This article outlines important driver safety guidelines. You will also learn safety tips and the factors contributing to rollovers with large passenger vans.

Start from Day 1

Ensure all new hires receive a driver safety orientation. Make sure they understand the organization's safety policies as well as processes tied to safety. This must include volunteers who may perform driving duties for the organization. 

Employee Screening and Incident Reports

Require new hire candidates to submit a Motor Vehicle Record (MVR) with the employment application, while also checking MVRs periodically. Candidates and employees who don't meet your insurance company's driver guidelines, or pose a liability to the organization, can be restricted from driving or be required to complete additional driver training. It is also a best practice to formalize an accident reporting and investigation process. 

Establish a Written Driver Safety Policy

Document the organization's culture of safety and the need to protect clients, employees, and volunteers while on the road. Include a code of conduct with regards to seat belt use, driving while under the influence, distracted driving, incident reporting, and vehicle maintenance. 

Understand the Risks of Passenger Vans

Large passenger vans, such as 15-passenger vans, are at a high risk of rollover. 

Contributing factors

• Number of occupants: vehicles with less than 10 passengers are three times less likely to rollover
• Speed: The odds of rollover are 5x greater when traveling on high speed roads (+50mph)
• Road curvature: The odds of rolling over double on curved roads vs. straight roads
• Tire inflation: An NHTSA study found that 74% of 15-passenger vans have at least one tire underinflated by 25% or more. Underinflated tires are at a higher risk of blowout.

Safety Tips

• Never allow more passengers than allotted seats. Fill seats from front to back of the vehicle if you have open seats.
• Only allow experienced and trained drivers to operate 15-passenger vans.
• Load cargo forward of the rear axle to enhance stability and control.
• Inspect vehicles for wear and tire pressure. Maintain an accurate log.
• Replace tires on a regular basis
• Keep the vehicle within the Gross Vehicle Weight Rating (GVWR).

The risk associated with transporting clients is important to recognize and manage. With close attention to safety and written procedures any social service or nonprofit organization can successfully help move around town. Be safe out there.

For more information about transportation safety, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

Resources:
Safety is Not a Luxury: Understanding the Risks of Passenger Vans, https://www.nonprofitrisk.org/app/uploads/2016/12/1222-NRM-16-Summer-Newsletter-D3
Before You Hit the Road: Stepping Stones of Driver Safety, https://www.nonprofitrisk.org/resources/articles/before-you-hit-the-road-stepping-stones-of-driver-safety/

Highlights of the New Tax Reform Law

Article provided by, Kevin Brown, Managing Partner, RBTK, LLP.

The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it includes both good and bad news for taxpayers. 

Below are highlights of some of the most significant changes affecting individual and business taxpayers. (Except where noted, these changes are effective for tax years beginning after December 31, 2017.)

Individuals

• Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025

• Near doubling of the standard deduction — through 2025

• Elimination of personal exemptions — through 2025

• Doubling of the child tax credit to $2,000 — through 2025

• Elimination of the individual mandate under the Affordable Care Act — effective for months beginning after December 31, 2018

• Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes — for 2017 and 2018

• New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025

• Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025

• Elimination of the deduction for interest on home equity debt — through 2025

• Elimination of miscellaneous itemized deductions subject to the 2% — through 2025

• Elimination of the AGI-based reduction of certain itemized deductions — through 2025

• Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year

• AMT exemption increase — through 2025

• Doubling of the gift and estate tax exemptions to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025

Businesses

• Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%

• Repeal of the 20% corporate AMT

• New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025

• Doubling of bonus depreciation to 100% — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023

• Doubling of the Section 179 expensing limit to $1 million

• New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)

• New limits on net operating loss (NOL) deductions

• Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers

• New rule limiting like-kind exchanges to real property that is not held primarily for sale

• New tax credit for employer-paid family and medical leave — through 2019

• New limitations on excessive employee compensation

• New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation

More to Consider

This is just a brief overview of some of the most significant TCJA provisions. There are additional rules and limits that apply, and the law includes many additional provisions. Contact your tax advisor to learn more about how these and other tax law changes will affect you in 2018 and beyond.

Source

OSHA Accepting Electronic Form 300A Data Submissions Through End of Year

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

In a recent news release from the U.S. Department of Labor (DOL), the Occupational Safety and Health Administration (OSHA) will be accepting electronically submitted 2016 OSHA Form 300A data through midnight on December 31, 2017.  The previous deadline had been December 15, 2017.  

According to a statement released by the DOL, as of January 1, 2018, the Injury Tracking System "will no longer accept the 2016 data."

Employers in California, Maryland, Minnesota, South Carolina, Utah, Washington and Wyoming are currently not required to submit their OSHA reports electronically.  However, it is likely it will be a requirement in the future.

Update: 5/3/18 For updated information on State requirements, read "Federal OSHA Asserts Electronic Data Reporting Requirement Applies to Employers across All States."

For additional information about the OSHA electronic reporting, read "Risk Management Center Streamlines Electronic OSHA Reporting," "DHS Alerts OSHA of Possible Electronic Reporting Security Breach," "OSHA Launched Electronic Reporting System."

California Workers Compensation 2018 Annual Officer Payrolls Minimums and Maximums, Assessment Rates, and Dual Wage Thresholds Announced by WCIRB

ICW Group Insurance Company, the largest group of privately held insurance companies domiciled in California, recently released an announcement that outlines the details of California Workers Compensation 2018 Annual Officer Payrolls Minimums and Maximums, Assessment Rates, and Dual Wage Thresholds.  The document is available for your review.

For any questions concerning the changes, please contact your Rancho Mesa service team.

"2018 Annual Officer Payrolls, CA Assessemnt Rates & Duel Wage Threshold." Insurance Company of the West. 

3 Steps to Developing Your 2018 Safety Training Calendar

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

View fullsize

Example of a construction training short calendar.

The end of the year is the perfect time to evaluate your company’s overall safety program. One important element in a successful safety program is the weekly safety meetings (aka training shorts, tailgate talks, or toolbox talks). 

Rancho Mesa’s Risk Management Library provides the content employers need to educate their employees on how to be safe in the workplace.

The library includes hundreds of English and Spanish training shorts designed to educate employees on various safety topics in a quick and concise manner.  Each training short typically includes 1-2 pages of easy to follow content and a sign-in sheet.

Rancho Mesa recommends choosing 52 topics that are relevant to your industry. This will serve as your training short calendar for 2018.
    

Step 1:  Review the Training Shorts Library

To access the training shorts within the library, login to the Risk Management Center, click “Resources,” then click “Risk Management Library. Click on “Training Shorts,” then click “Safety.”

Review the list to determine which topics are appropriate for your industry.

Step 2: Save the Training Topics

It is recommended that you save your selected Training Shorts to your “My Content” folder.  This will make it easily to find them later.

From the list of training shorts, check the box to the left of the title(s) you would like to save to the “My Content” folder.  Then, click “Add to My Content” in the upper right corner.  Choose the subfolder to save the training shorts. Now, you can refer back to the list of topics, later. 

Step 3: Schedule the Trainings

Now, that you have picked your 52 training topics from the library, we recommend putting them on a calendar.  Pick a day during the week when you’ll have your safety meeting and include the topic for each week. Training may also be scheduled within the Risk Management Center.

For recommendations for your training calendar, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

OSHA Pushes Back Electronic Reporting Deadline

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

In a recent news release from the U.S. Department of Labor (DOL), the Occupational Safety and Health Administration (OSHA) announced it has extended its electronic reporting deadline from December 1, 2017 to December 15, 2017.  

The extension was made "to allow affected employers additional time to become familiar with the new electronic reporting system launched on August 1, 2017," according to the statement issed by the DOL's OSHA.

Employers in California, Maryland, Minnesota, South Carolina, Utah, Washington and Wyoming are currently not required to submit their OSHA reports electronically.  However, it is likely it will be a requirement in the future.

Update: 5/3/18 For updated information on State requirements, read "Federal OSHA Asserts Electronic Data Reporting Requirement Applies to Employers across All States."

For additional information about the OSHA electronic reporting, read "Risk Management Center Streamlines Electronic OSHA Reporting," "DHS Alerts OSHA of Possible Electronic Reporting Security Breach," "OSHA Launched Electronic Reporting System."

Berkshire Hathaway Homestate Companies and Rancho Mesa Participate in Nationally Renowned LANDSCAPES 2017

Author, Drew Garcia, NALP Program Director, Rancho Mesa Insurance Services, Inc.

Berkshire Hathaway Homestate Companies and Rancho Mesa Insurance Services NALP Program Team

The Berkshire Hathaway Homestate Companies (BHHC) and Rancho Mesa Insurance Services (RMI) teamed up at the annual LANDSCAPES 2017 convention, the Green Industry & Equipment (GIE) Expo, and the Hardscape North America (HNA) Tradeshow, in Louisville, Kentucky, on October 17-20, 2017.  

The group consisted of Senior Vice President Margaret Hartmann, NALP Assistant Director of Underwriting Valerie Contreras, NALP Program Underwriter Davis Cooper, NALP Client Services Coordinator Emily Docuyanan, and NALP Senior Loss Control Specialist Steve Hamilton from BHHC, and agency Principal Dave Garcia and NALP Program Director Drew Garcia from RMI.

Davis Cooper, NALP Program Underwriter, Berkshire Hathaway Homestate Companies

The BHHC and RMI group participated in a multitude of event programs as speakers, ambassadors, and audience. BHHC and RMI championed four breakfast table topics, a breakout education session based on risk mitigation and cost savings, and took time to speak with association members about the program within National Association of Landscape Professionals' (NALP) booth at the expo.

NALP Program Board Presentation

Sam Steel, NALP Safety Advisor & Steve Hamilton, BHHC

Membership Meeting

“The event was a great success," said Dave Garcia. "It’s amazing to see so many like-minded people dedicated to improving themselves and their companies while building upon the professionalism this industry holds as standard.  We are so proud to be a part of this amazing industry and look forward to a long lasting partnership with NALP for years to come.”

NALP Group

Davis Cooper and Drew Garcia at the booth

Davis Cooper speaking with attendees at the booth

I really enjoyed connecting with NALP members and learning about their individual companies. LANDSCAPES provides an environment for motivated industry professionals to share ideas, learn, and form long lasting relationships. The overwhelming commonality is this identified desire for industry veterans to give back to the community that helped them succeed. It’s easy to build off that energy and puts into perspective that our Work Comp Program is providing the level of specialized attention this industry deserves. I'm excited to keep the momentum going while constantly looking for ways to improve our product so that we can provide more to lawn and landscape professionals.

For more information about the NALP Workers' Compensation Program, contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

OSHA Begins Enforcement of New Silica Rule

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

After an initial delay and a 30-day grace period, the Occupational Safety and Health Administration‘s (OSHA) revised Crystalline Silica Rule is now in full effect. The rule became effective September 23, 2017 and OSHA allowed for a 30-day grace period for issuing fines and citations for companies who were making a good-faith effort towards meeting the new requirements. 

“The new silica rule lowers the permissible exposure limit from the current standard of 250 micrograms per cubic meter of air to 50 micrograms per cubic meter of air, averaged over an eight hour day, and an action level of 25 micrograms per cubic meter of air,” wrote Sam Clayton, Vice President of Rancho Mesa Insurance Services’ Construction Group.

OSHA has made available Interim Enforcement Guidelines and a Fact Sheet to assist companies in complying with the new requirements.

To learn more about the Crystalline Silica rule, read “Is your company prepared for OSHA’s new Silica Rule?” by Sam Clayton. 

Contact Rancho Mesa Insurance Services at (619) 937-0164 for more information.

7 Tips for Managing Risk at Nonprofit Special Events

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

Nonprofit organizations often conduct special events throughout the year. These events can successfully increase awareness of the nonprofit’s mission, generate important unrestricted revenue, and offer all stakeholders a nice opportunity to have fun. Unfortunately, important risk management steps are often overlooked before the day of the event. Let’s look at a few that can limit exposure to risk.

1. Documenting Risk Management Activities
In addition to helping train and supervise personnel, a written plan can help to ensure important actions take place. Documenting activities also helps an organization defend its actions if an accident occurs. 

2. Safety Officer
Consider assigning risk management oversight specifically to one person. The “safety officer” should receive the proper training and resources to safeguard the event, the organization, the participants, and others.

3. Crisis Response Team
To prevent a crisis from draining valuable resources, develop a crisis response team of three to five people. This team should handle any emergency quickly and effectively while working with all stakeholders.

4. Pre-Event Inspections
This important step helps you identify and correct unsafe conditions before an event as well as identify pre-existing damage to the property. During the inspection, note any damages prior to the event and give a copy to the facility manager. It is also a good idea to inspect the premises during and after the event. 

5. Emergency Plans
A host of things can go wrong at a special event, so an organization must know how to address these when they occur. Consider the following: evacuations, medical emergencies, crowd control, and limiting alcohol consumption.

6. Volunteers
Ensuring that your “day of” volunteers are properly trained and supervised is a very important risk management challenge. Without such precautions, great harm can come to the organization. Allow time to screen and select the best candidates.

7. Food and Beverages
Will your organization provide and serve food, or, is a vendor performing these functions? You can transfer risk to vendors in most situations, but if your organization is providing food and beverage then consider the following:

• Facilities: Is there adequate preparation, storage, and refrigeration facilities for the type of food?

• Health Regulations: Do you need a health department permit? What other health department regulations should you consider?

• Food Spoilage and Contamination: Do your food handlers have the proper training for handling the food being served?

These are only a few of the very important risk management practices a nonprofit organization should consider before a special event. Ignoring these exposures in the planning phase can turn a fun day into a costly event.  For a full risk assessment of your special event and other activities, please contact Rancho Mesa Insurance Services, Inc.s at (619) 937-1064.

Sources: The Nonprofit Risk Management Center’s “My Assessment“ module (www.nonprofitrisk.org).

Small Performance Bonds No Longer Require CPA Financial Statements

Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.

In the past, many Surety Bond carriers required financial statements from a Certified Public Account (CPA), bank lines of credit, tax returns, etc. for contractor bond programs, whether the client required one bond a year or a large bond program. This is no longer the case.

Several “A” rated carriers now provide “personal credit based scoring” to approve single bonds of $350,000 up to $500,000. There is no need for company financial statements. Instead, the contractor completes a “fast track” application, which requests personal financial information about the owner(s). The bond company will run the personal credit of the owner(s). If the owner(s) personal credit is decent, the bond will be approved. A response is provided within 48 hours of submission. 

The program responds to requests for bid bonds, performance and payment bonds, and letters of bondability. Several carriers provide a “pre-qualification” feature so you can determine if you will qualify for the bond before you bid or negotiate a project that will require a bond. This pre-qualification feature is helpful for owners that are aware they have low credit scores.

So, if you are considering a project that requires a bond and you are not a big fan of collecting a lot of paperwork for one project – don’t fret.  We may have a solution to help you win that job!

Contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164.

NALP Announces 2017 Safety Award Recipients

Author, Drew Garcia, NALP Program Director, Rancho Mesa Insurance Services, Inc.

Rancho Mesa would like to congratulate all 263 National Association of Landscape Professionals (NALP) members who achieved recognition for their safety efforts in 2017.  

"The National Association of Landscape Professionals Safety Recognition Awards Program is designed to reward landscape industry professionals who consistently demonstrate their commitment to safety, and reflects the dedication of these individuals and their companies to creating and maintaining safe work environments," according to the NALP website.

Companies are evaluated in the following categories:

• No vehicle accidents
• No injuries or illness
• No days away from work

We would like to encourage all professional lawn and landscape companies to partake in NALP’s safe company program because participation as a group will continue to evolve and strengthen safety within the industry as whole.  

I’m looking forward to supporting the association and these individual achievements in Louisville on October 19th at the annual awards ceremony.  

On behalf of Rancho Mesa, congratulations to the participants!   

View the full list of winners.

OSHA Announces Top 10 Cited Violations for FY 2017

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

The Occupational Safety and Health Administration (OSHA) released its preliminary top 10 citation list for fiscal year 2017 at the annual National Safety Council (NSC) Congress and Expo, held in late September 2017.

“One thing I’ve said before in the past on this is, this list doesn’t change too much from year to year,” said Patrick Kapust, deputy director of OSHA’s Directorate of Enforcement and Programs, during the expo presentation. “These things are readily fixable. I encourage folks to use this list and look at your own workplace.”

OSHA compiled the list using data collected from incidents occurring from October 2016 through September 2017.

1. Fall Protection in Construction: 6,072 violations.
   Frequently violated requirements include unprotected edges and open sides in residential construction and failure to provide fall protection on low-slope roofs
2. Hazard Communication: 4,176 violations.  
   Not having a hazard communication program topped the violations, followed by not having or providing access to safety data sheets
3. Scaffolding: 3,288 violations.  
   Frequent violations include improper access to surfaces and lack of guardrails
4. Respiratory Protection: 3,097 violations.  
   Failure to establish a respiratory protections program topped these violations, followed by failure to provide medical evaluations
5. Lockout/Tagout: 2,877 violations.  
   Frequent violations were inadequate worker training and inspections not completed.
6. Ladders in Construction: 2,241 violations.  
   Frequent violations include improper use of ladders, damaged ladders and using the top step.
7. Powered Industrial Trucks: 2,162 violations.  
   Violations include inadequate worker training and refresher training.
8. Machine Guarding: 1,933 violations.  
   Exposure points of operation topped these violations.
9. Fall Protection-training requirements: 1,523 violations. 
   Common violations include failure to train workers in identifying fall hazards and proper use of fall protection equipment.
10. Electrical-wiring methods: 1,405 violations.  
    Violations of this standard were found in most general industry sectors, including food and beverage, retail and manufacturing

Training materials for each of the items on the OSHA list are available within the Risk Management Center.  Contact Rancho Mesa Insurance Services, Inc. at (619) 937-0164, for more information.
 

3 Steps to Protect Your Employees from San Diego’s Recent Hepatitis A Outbreak

Author, Alyssa Burley, Client Services Coordinator, Rancho Mesa Insurance Services, Inc.

Whether you work in the human services sector like healthcare, community outreach, or schools, or you are in the construction industry working in areas like downtown San Diego, your employees may come in contact with the Hepatitis A virus (HAV). 

As cities throughout San Diego County actively work to stop the spread of the recent Hepatitis A outbreak, some employers are asking how they can protect their employees who may be exposed to the virus.

According to the Center for Disease Control (CDC), the Hepatitis A virus is spread by “person-to-person transmission through the fecal-oral route (i.e., ingestion of something that has been contaminated with the feces of an infected person) is the primary means of HAV transmission in the United States.”

While the local and national media have primarily focused on the concentration of homeless and drug users who have contracted the virus, about 20% of the recent reported cases are not included in that population, according to the “Hepatitis A Outbreak in San Diego, CA” interview by Dennis Stein, linked to on the County of San Diego’s website. However, about half of the 20%, can trace their infection back to working with at risk populations. Thus, the Hepatitis A outbreak should be everyone’s concern, not just those included in the homeless population and drug users.

The “Hepatitis A vaccination is the best way to prevent the disease,” wrote Wilma J. Wooten, Public Health Officer and Director for the County of San Diego Public Health Services, in a letter to emergency responders, businesses, homeless providers and substance abuse treatment providers.  While vaccination is an option to prevent infection, good hygiene is also highly effective.  

Follow the steps below to help prevent the spread of the Hepatitis A virus to your employees:  

1. Wash Hands
First and foremost, instruct employees to frequently wash their hands with soap and warm water after using the restroom, before eating, and after touching handrails, door handles, tools, and other surfaces that are frequently used by others. 

Handwashing is “integral to Hepatitis A prevention, given that the virus is transmitted through the fecal–oral route,” according to the CDC’s website.

2. Sanitize
It may be necessary to regularly sanitize your facility or equipment. “Maintain routine and consistent cleaning of bathrooms for employees and the public, using a chlorine-based disinfectant (bleach) with a ratio of 1 and 2/3 cup of bleach to one gallon of water. Due to the high bleach concentration of this mix, rinse surfaces with water after 1 minute of contact time and wear gloves while cleaning,” suggests Wooten.

3. Educate
Awareness and education about the Hepatitis A outbreak is key to preventing the spread of the virus.  Based on knowing the facts about how the virus is spread, employees may decide to wear disposable gloves, wash hands more frequently, or change the way they perform their job duties to prevent exposure.
 
The Risk Management Center provides a variety of training materials to Rancho Mesa clients on Hepatitis A and other bloodborne pathogens.  Through online courses, training shorts, videos and other training materials, help educate your employees before there is an infection.

The County of San Diego also provides Hepatitis A information in the form of guidelines, cards, posters, videos and more.

Contact Rancho Mesa Insurance Services at (619) 937-0164 for more information.

Is your Company Prepared for OSHA’s new Silica Rule?

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

On September 23rd 2017 the Occupational Safety and Health Administration’s (OSHA) new silica standard for construction will go into effect.  This means contractors who engage in activities that create silica dust or are known in the industry as respirable crystalline silica, must meet a stricter standard for how much dust their workers inhale.

What is Crystalline Silica?  
Crystalline silica is a common mineral that is found in material that we see every day in roads, buildings and sidewalks.  It is a common component of sand, stone, rock, concrete, brick, block and mortar.  

What are the Effects?
Exposures to crystalline silica dust occur in common workplace operations involving cutting, sawing, drilling, and crushing of rock, and stone products such as construction tasks and operations using sand products like in glass manufacturing, foundries, sand blasting and hydraulic fracking.  Inhaling silica dust can lead to silicosis, an incurable lung disease that can be fatal.  Those with too much silica exposure can also develop lung cancer, kidney disease and chronic obstructive pulmonary disease.

What is the New Standard?  
The new silica rule lowers the permissible exposure limit from the current standard of 250 micrograms per cubic meter of air to 50 micrograms per cubic meter of air, averaged over an eight hour day, and an action level of 25 micrograms per cubic meter of air.

How will the New Standard protect workers?  
The rule significantly reduces the amount of silica dust that workers can be exposed to on the job.  That means employers will have to implement controls and work practices that reduce workers exposures to silica dust.  For most activities, that means employers will have to ensure the silica dust is wet or vacuumed up before workers can work in the area.  Employers are required under the rule to provide training, respiratory protection when controls are not enough to limit exposure and written exposure control plans, measure controls in some cases limit access to high exposure areas.  Employers are also required to offer medical exams to highly exposed workers.

How can your company protect itself from Silica Related Claims?
In addition to implementing the necessary controls to protect your employees, we would highly recommend you review your insurance policies to make sure that your company is protected from silica related claims.   

Over the last few years, we’ve seen quite a few General Liability carriers putting Silica exclusions on there policies.  This isn’t always the case and may be negotiated out depending on the carrier.  Another alternative is to obtain a Contractors Pollution Policy that would provide the necessary coverage for this exposure.  

Rancho Mesa also recommends taking advantage of the Silica Exposure Training materials available within the Risk Management Center. These materials include an online training course, PowerPoint presentation, training short and quiz in both English and Spanish. Should you have any questions, please contact Rancho Mesa Insurance Services at 619-937-0164.

Workers' Compensation Dual Wage Thresholds Increases for Construction Classes in 2018

Author David J. Garcia, C.R.I.S., A.A.I., President Rancho Mesa Insurance Services, Inc.

Updated September 15, 2017 The Workers’ Compensation Insurance Rating Bureau has confirmed the following increases for the 2018 dual wage construction classifications.

Originally published on May 12, 2017.

In an effort to keep you informed, so that you can begin to plan your 2018 budget, we wanted to let you know of a potential change in the dual wage classes, for many but not all, the dual wage construction class codes.

The Workers’ Compensation Insurance Rating Bureau is proposing increases in the wage threshold for ten different construction industry dual wage classifications and is likely to recommend an increase in an eleventh, by the time it releases its 2018 regulatory filing, next month. The proposed increases range from $1.00 to $2.00 per hour, to keep the thresholds in line with wage inflation. See the chart below for the actual changes.

Dual Wage Thresholds

Classification	Current Threshold	Recommended Threshold	Threshold Difference	Last Changed
5027/5028 Masonry	$27	$27	$0	2013
5190/5140 Electrical Wiring	$30	$32	$2	2014
5183/5187 Plumbing	$26	$26	$0	2014
5185-5186 Automatic Sprinkler Installation	$27	$27	$0	2009
5201-5205 Concrete or Cement Work	$24	$25	$1	2009
5403/5432 Carpentry	$30	$32	$2	2016
5446/5447 Wallboard Application	$33	$34	$1	2016
5467/5470 Glaizers	$31	$31/further study	$1	2016
5474/5482 Painting/Waterproofing	$24	$26	$2	2009
5484/5485 Plastering or Stucco Work	$27	$29	$2	2014
5538/5542 Sheet Metal Work	$27	$27	$2	2009
5552/5553 Roofing	$23	$25	$2	2009
5632/5633 Steel Framing	$30	$31	$1	2016
6218/6220 Excavation/Grading/Land Leveling	$30	$31	$1	2014
6307/6308 Sewer Construction	$30	$31	$2	2014
6315/6316 Water/Gas Mains	$30	$31	$2	2014

_{Table Source: WCIRB.com.}

Rancho Mesa will keep you informed should the proposed 2018 change go into effect.  If you have any questions, please give us a call at (619) 937-0164.

Your Rancho Mesa Team - RM365 Advantage

3 Topics to Discuss with Vendors, Independent Contractors, and Partner Agencies Prior to Working Together

Recently, a non-profit client of mine asked the question: What are the steps I should take with vendors, contracted professionals and partner agencies to make sure my organization is protected should a claim arise as a result of their work?  This is a common exposure to many of our clients, and there are several steps that can be taken to protect your business.

1. Verify the Proper Insurance is in Place
Any person/organization that you consider working with should be fully insured and able to provide you with a Certificate of Insurance, which lists the coverages, carriers and limits of insurance they have in place.  Without their own insurance in place, your company is now assuming full responsibility for anything that may occur as a result of their negligence. Depending on the nature and scope of the work being performed, different types of insurance will be required.  An insurance professional can help you determine the specific coverage needed.

Example: A charter school has hired a local animal shelter to bring animals to their students and teach about conservation.   One of the animals bites a student.  If the animal shelter does not have the proper insurance, the charter school’s insurance will be liable for any action taken against the school.

2. Name Your Business as Additional Insured
In addition to verifying that the correct coverages and limits are in place, you should also require they name your company as an additional insured on their policy.  By doing this, your organization will now be indemnified under their policy for claims arising as a result of their work, in which you are named. 

Example: In the example where a charter school has hired a local animal shelter to bring animals to their students and one of the animals bites a student, by requiring the animal shelter to name the charter school as an additional insured, the school is covered under the animal shelter’s insurance.

3. Provide a Waiver of Subrogation
A waiver of subrogation means an insured (and their insurance company) are waiving their right to subrogate against another party, should their employee suffer an injury on your premises.  Most independent contractors aren’t required to carry insurance, so this wouldn’t apply to them.  However, if employees of another company are performing work on your premises, it is wise to have them waive their right to subrogate against your workers’ compensation carrier. 

Example: A charter school has hired a local animal shelter to bring animals to their students and teach about conservation.   While presenting, an employee of the shelter trips and injures their knee.  A waiver of subrogation would void the animal shelter’s workers’ compensation provider from seeking subrogation against the charter school’s workers’ compensation policy. The employee will still be treated, but you won’t suffer the penalty for it.

I strongly recommend reviewing your processes regarding vendor, independent contractors and partner agencies to see what is currently in place.  Far too often steps are skipped and businesses are unaware of the liability they are assuming.  If you have any question about a specific circumstance, please don’t hesitate to give Rancho Mesa a call at (619) 937-0164, we are happy to assist.