Ask the Expert

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How Accurate Work-in-Progress Schedules Can Positively Affect Your Bond Program

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

When meeting with new contractors looking to qualify for increased bonding capacity, one of the first items generally discussed is the work-in-progress Schedule (WIP). Understandably, the balance sheet and profit & loss statement get the most attention when compiling financial information for the bond company, but the WIP, whether on a quarterly or six month basis, allows the bond company to gauge how well the contractor has estimated their projects and how conservative they have been on a project’s profitability. Preparation of an accurate work in progress schedule is the only way to gauge the true profitability of the company.

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Equipment Hazards and Ways to Reduce Exposure

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

The very nature of the construction business creates risk; from injuries in the course of employment, damage to property, third party liability, etc. One important area that can be overlooked is equipment security. While there is simply no way to eliminate 100% of risk to equipment, there are several steps a contractor can take to initiate proper controls and minimize losses in this area.

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California SB 1343 Expands Sexual Harassment and Abusive Conduct Prevention Training Requirements

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

In September 2018, former California Governor Jerry Brown approved Senate Bill 1343 (SB 1343) which expands the requirements for Sexual Harassment and Abusive Conduct Prevention training within the workplace.

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Mitigating Risk at Height

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Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

Falls from elevated heights are the single most hazardous injury within the construction industry; representing 38% of all construction fatalities (NSC Construction & Utilities). That is a scary fact if you are a painting contractor that works off the ground. In years past, it was common to see painters working on multi-story scaffolding with few controls in place, or working from ladders on top of trucks to get those extra couple feet needed to finish a project. Workers compensation underwriters have difficulty with risks that work over 30 feet. Why is this 30 foot threshold so critical to insurance companies who write workers compensation?

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Reporting Serious Workers’ Compensation Injuries

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Author, Jim Malone, Workers’ CompensationClaims Advocate, Rancho Mesa Insurance Services, Inc.

Workers’ Compensation injuries occur every day. The majority of these injuries are minor incidents which require no medical treatment or loss of time from work. For others, the injury is reported to the insurance carrier, the injury is addressed, forms are provided, and the recovery from the injury is monitored until the employee is released back to work and a discharge from care is provided.

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How Credit-Based Bond Programs Benefit New Contractors

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Author, Andy Roberts, Account Executive, Surety Division, Rancho Mesa Insurance Services, Inc.

For small or new contractors that are looking to break into the world of government contract work, the process of getting a surety bond program in place can seem like an onerous one. It requires the contractor to compile a lot of paperwork and detailed financial reports, which can be a daunting task for any contractor, regardless of size or experience. However, there are now several “A” rated sureties that provide credit-based programs for writing smaller bonds.

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3 Key Differences Between Self-Insured Retention and Deductibles

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

Every business or non-profit that purchases a form of liability insurance has seen the term deductible or self-insured retention (SIR). While many know the difference between the two, many do not. Deductibles and SIRs, while quite different, are both designed to keep your premiums down. Insurers are willing to reduce the premium on policies, which have a deductible or SIR, because the insured assumes some of the risk. This however, is where the similarities end.

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IRS Extends 2018 Deadline for 1095c Forms

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Authors, Shane Medlin, Employee Benefits Account Executive, Rancho Mesa Insurance Services, Inc.

The Internal Revenue Service (IRS) released Notice 2018-94 outlining extended deadlines for 2018 Minimum Essential Coverage under Section 6055 and Large Employer Shared Responsibility under Section 6056. This notice extends the due date to provide individuals the 2018 Form 1095-B, Health Coverage, and the 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from January 31, 2019, to March 4, 2019. This notice also extends good faith transition relief from section 6721 and 6722 penalties to the 2018 information reporting requirements under sections 6055 and 6056.

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Developing an Effective Injury and Illness Prevention Program (IIPP)

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

If you have operated a business in the state of California for any period of time, you have very likely heard about or run across the acronym IIPP. Wherever you stand with your knowledge within the world of safety, injury, and illness, it is important for every organization to understand the mandatory parts of an IIPP. What is often overlooked is how developing an effective safety program can create positive change and truly impact your bottom line.

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Six Reasons for Promptly Reporting a Workers’ Compensation Claim

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Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

Reporting workers’ compensation claims in a timely manner can have a huge impact on the severity of the claim. Some policyholders believe the practice of not reporting employee injuries early is a good business practice. This could not be further from the truth.

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15 Tips for Reducing Exposures When Performing Median Work

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

Many city contracts and some residential communities will call for landscape contractors to install, maintain, or remodel road dividing medians. The potential risk for injury that can occur due to this exposure is highly severe. If your operations include any percentage of median work, then be sure to understand this increases your overall risk profile and slides the operations needle towards “heavy” in class.

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California Insurance Commissioner Announces Rate Cuts for 2019

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

California employers received some great news regarding their Workers Compensation premiums for 2019. On November 6, 2018, Insurance Commissioner Dave Jones recently announced his decision to cut California Workers’ Compensation advisory pure premium rates by 8.4% significantly higher than the initial recommended 4.5%. This change will affect policies that renew or incept on or after January 1, 2019.

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What is a Surety Bondability Letter?

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

When an owner or general contractor is looking to pre-qualify a contractor for a specific project, they will often request the contractor to submit a bondability letter from their bond agent. The bondability letter provides the owner with an assurance that the contractor has been underwritten and approved by a surety company for support of a specific project. The bondability letter is issued for no cost (it is regarded as a standard service provided by the bond agent).

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How a Medical Billings Errors & Omissions Policy Can Protect Against A Medicare Recovery Audit

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

Human Service agencies billing Medicare may find themselves paying thousands of dollars in defense costs and regulatory fines resulting from a Medicare Recovery Audit. According to the Centers for Medicare and Medicaid Services, “the Medicare Fee for Service (FFS) Recovery Audit Program’s mission is to identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries.”

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Important Reminder for Janitorial Business Owners: Property Service Worker Protection Act

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Author, Jeremy Hoolihan, Account Executive, Construction Group, Rancho Mesa Insurance Services, Inc.

A few of my janitorial clients have recently asked for information on the Property Service Worker Protection Act (AB 1978) and its requirements. Below is a description of the law and instructions on registering. As a reminder, the deadline for all janitorial service providers to register for the Property Service Worker Protection Act was October 1, 2018. If you have not yet registered, I would recommend doing so, as soon as possible.

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2019 Expected Loss Rates Published in California’s Updated Regulatory Filing – X-MOD Impact Inevitable for 0042 Class Code

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

The 2019 Expected Loss Rate (ELR) for Landscaping class code 0042 was recently published at a 15% decrease or $2.97.

The ELR is the factor used to anticipate a class code’s claim cost per $100 for the experience rating period. It is not to be confused with the Pure Premium Rate (PPR). The ELR differs from the PPR in that the ELR simply measures the basic claim cost for a class code without including loss adjustment expense, excess loss load (capped at $175,000 for X-MOD purposes), and loss development.

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Distracted Driving, Not Just an Automobile Insurance Issue, Bad News for Workers Compensation Too

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Author, David J Garcia, A.A.I, CRIS, President, Rancho Mesa Insurance Services, Inc.

I’ve written at length on the negative effects distracted driving is having on the automobile insurance industry and its impact on the rise in accidents, claim costs, and increases to your automobile premiums. But, have you considered its effects on your Experience Modification Rate (EMR) and ultimately workers’ compensation cost?

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Contractor Strategies to Maximize Your Bank Line of Credit

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

Some of my most successful bond clients opened their construction business with a good amount of working experience on their resume, but only a minimal amount of cash and capital. Unfortunately, bond companies like to see a strong amount of cash and capital. Therefore, my goal, as their bond agent, is to work with what they have at the present time to explain why they are a “good risk” now for bid, performance, and payment bonds - along with ideas on how to overcome the initial cash and capital constraints.

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Understanding Waivers of Subrogation for Contractors

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Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

In an era where general contractors commonly require a Waiver of Subrogation from its sub-contractors before they are allowed to step foot on the jobsite, it is important to understand how a Waiver of Subrogation functions. Most companies simply tell their agent they need the waiver added to their contract, but what does this mean? How does it affect the policy?

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Update: 8868 Class Code Changes - Proposed WCIRB Changes Awaiting Public Hearing August 3rd

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Author, Chase Hixson, Account Executive, Human Services Group, Rancho Mesa Insurance Services, Inc.

On August 3, 2018, the California Department of Insurance will hold a public hearing regarding the proposed changes to the 8868 Class Codes.

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