During the process of completing a project, a contractor faces a variety of risks. Materials, equipment, machinery and supplies must be purchased, stored, transported, staged, processed and installed before work can be accepted. For contractors, the property they rely on to complete their work can be compromised along the way.
Most commercial property insurance policies provide little to no coverage for property once it has been removed from a contractor’s premises. To guarantee that property will be insured up until the point that it is installed and accepted, contractors can turn to a form of inland marine insurance known as an installation floater.
The Basics
Installation floaters insure a contractor’s materials, equipment, machinery and supplies from the moment they leave the contractor’s premises until a job is complete. This means that a contractor’s property will be covered in the following scenarios:
- While being stored at a temporary location
- While in transit to a job site
- While being staged or awaiting installation
- While being installed
- While pending acceptance by a project owner or general contractor
Put another way, installation floaters cover a subcontractor’s property before it becomes a permanent feature of a project or structure.
While installation floaters offer similar coverage to that provided by builders risk policies (another form of inland marine insurance typically purchased by project owners or general contractors), there are important distinctions between the two forms of coverage. Installation floaters are typically purchased by contractors or subcontractors that have a limited scope of work on a job because they provide coverage only for the insured contractor’s portion of a project.
Installation floaters can be utilized for both new “ground-up” construction and for remodeling projects, the latter for which builders risk insurance may not be applicable. Additionally, policies can be written either on an annual basis to apply to all projects undertaken by a contractor or on per project basis.
Covered Perils
Installation floaters are “all risks” policies, meaning that they cover all exposures other than those specifically named by the policy. Policies generally cover losses caused by fire, theft, explosions, traffic accidents, vandalism and several other perils.
Unless covered through an endorsement, installation floaters may exclude losses caused by earthquakes, volcanic eruptions, floods, sewer backups, governmental action, nuclear hazards, war or military action, employee theft, or errors and omissions.
Installation Floater vs. Builders Risk Insurance
While some brokers may argue that installation floaters cause redundancies in coverage, and they believe the project owner or contractor’s builders risk policy will respond in the event of a claim, this is often not the case. In some instances, the type of work a contractor performs may be excluded from the terms of a builders risk policy. For example, contractors installing highly valued equipment or materials not covered under the builders risk policy (such as roofs, HVAC and electrical systems) may need to purchase an installation floater to be properly insured.
Even if a builders risk policy covers the type of work being performed, a contractor will likely have to absorb a share of the policy’s deductible in the event of a claim. Depending on the terms of the builders risk policy, it can be more cost effective for a contractor to rely on an installation floater.
With these factors in mind, contractors should always evaluate a builders risk policy to determine whether their interests are properly insured and what portion of the policy’s deductible they may be required to absorb.
Other Considerations
Like other forms of inland marine insurance, installation floaters often exclude coverage for property while it is air- or waterborne. If a contractor’s work requires the use of a crane, helicopter, barge or watercraft to install property, the terms of an installation floater should be reviewed along with existing insurance policies in order to determine whether coverage is applicable and to identify potential coverage gaps.
Trees, shrubs and plants are also commonly excluded from installation floaters. If possible, contractors that perform landscaping installations should have their policy amended to specifically cover this type of property.
Companies that rely on temporary structures or falsework including, but not limited to, cribbing, scaffolding, forms, temporary fencing, and temporary lighting or retaining walls, should work with their brokers to find the proper installation floater. Policies may include a sublimit for these items, or, in some cases, exclude these items from coverage entirely.
Lastly, policies may omit coverage for losses that occur during testing. Companies that execute startup, performance, stress, pressure or overload testing of materials, supplies, machinery, fixtures and equipment should confirm that their installation floater meets their testing needs. Often, coverage for testing can be added at an additional cost.
Claims Process
In the event of a loss, an insured contractor will be required to take action as specified by their individual policy. In general, insured contractors are required to do the following:
- Provide prompt notice of the loss
- Submit proof of the loss, including the time, place and circumstances of the loss, within the timeline specified by the policy
- Supply estimates, specifications, inventories and other information that may be required to settle the loss
- Disclose other insurance policies that may cover the loss
- Take reasonable steps to protect the covered property to prevent further loss
- Produce records related to the value of the property affected by the loss
As always, policyholders can rely on their Scurich Insurance broker to assist during the claims process.
Work With an Expert
To discuss whether an installation floater is the right form of coverage to address your business’s property exposures, please contact Scurich Insurance.
Read more
Before visiting a business, 90 percent of consumers read online reviews. Your company needs online reviews, but your business could suffer if you encourage or allow fake reviews to populate the internet. Understand the dangers of fake reviews as you build and protect your company.
What are Fake Reviews?
As a business owner, you may solicit or allow fake reviews as a way to bolster your online reputation and attract more customers.
Four common types of fake reviews include:
- Ask family members and friends to share reviews of your company. While your family and friends may be loyal customers, their reviews could be skewed and not provide an accurate picture of your company.
- Pay employees to write reviews. These reviews could appear to be objective but are dishonest.
- Offer your product or service for free in exchange for a written review. While you may boost production volume and customers with this technique, it invites positive rather than honest reviews.
- Encourage reviews on open rather than verified review sites. Numerous review sites allow anyone to leave a review even if they haven’t tried your services or products, a practice that encourages fake reviews.
Dangers of Fake Reviews
Your company faces several dangers because of fake reviews.
Fines – Expect repercussions from the Federal Trade Commission (FTC) and your state if you violate consumer protection laws that include false advertising.
Damaged Reputation – Online review sites can report fake reviews to consumer alert groups and post this information on your profile. As a result, your company will gain a negative reputation that is nearly impossible to overturn.
Broken Trust – If consumers discover that you’ve encouraged or allowed fake reviews, they will stop trusting your company. You lose credibility and valuable business that affects your company now and into the future.
Lack of Growth – An influx of reviews can improve business temporarily, but your business will suffer if your products or services don’t match the fake reviews.
Public Danger – Fake reviews of physicians, attorneys, accountants or auto repair shops could potentially harm consumers. Other dangers caused by undisclosed allergic reactions or unsafe products can also harm consumers, highlighting the need for only honest reviews.
How to Prevent Fake Reviews
In your quest to attract business and build your brand, you may ask all your customers to leave honest reviews on verified sites. Continue to offer excellent service, too, that prompts customers to praise your company online.
Overall, your company will benefit more from no reviews than from fake ones. Understand the dangers of fake reviews and how to combat them as you retain your credibility, build your reputation and protect your company.
Read more
Cyber security researchers recently announced the discovery of two major security flaws that could allow hackers to bypass regular security measures and obtain normally inaccessible data. The flaws, referred to as Meltdown and Spectre, are both caused by design flaws found in nearly all modern processors. These vulnerabilities can be exploited to access all of the data found in personal computers, servers, cloud computing services and mobile devices.
Because Meltdown and Spectre are both caused by design flaws, experts believe that they will be harder to fix than traditional security exploits. Additionally, software patches that have already been released to help address the vulnerabilities can cause computer systems to slow down significantly, which may impact their ability to perform regular tasks.
Researchers believe that Meltdown and Spectre may be limited to processors manufactured by different companies, but also warn that the design flaws that contribute to Meltdown and Spectre have been present for years. Here are some key details about each flaw:
- Meltdown: This flaw can be used to break down the security barriers between a device’s applications and operating system in order to access all of the device’s data. Meltdown can be used to access desktop, laptop, server and cloud computer systems, and can even be used to steal data from multiple users who share one device. Although researchers have only been able to verify that Meltdown affects processors made by Intel, other processors may also be affected. Many software developers have already released updates that prevent hackers from exploiting Meltdown.
- Spectre: This flaw can be used to break down the security barriers between a device’s different applications and access sensitive data like passwords, photos and documents, even if those applications adhere to regular security checks. Spectre affects almost every type of computer system, including computers, servers and smartphones. Additionally, researchers have confirmed that the design flaw that enables Spectre is present in Intel, AMD and ARM processors that are used by nearly every computer and mobile device. Software developers are currently working on a patch to prevent the exploitation of Spectre, but some experts believe that future processors may have to be redesigned in order to fix the vulnerability.
When Meltdown and Spectre were originally discovered in 2017, researchers immediately
reported them to major hardware and software companies so work on security fixes could begin without alerting hackers. As a result, services and applications offered by companies like Microsoft, Google, Apple and Amazon have already been updated to help defend against the flaws. However, you shouldn’t rely solely on a software patch to protect against these vulnerabilities. Here are some steps you can take to protect your computer systems and devices from Meltdown and Spectre:
- Update all of your devices immediately, and check for new updates regularly. You should also encourage your friends, family members and co-workers to do the same.
- Contact any cloud service providers and third-party vendors you use to ensure that they are protected against Meltdown and Spectre. Cloud services and computer servers are especially vulnerable to the exploits, as they often host multiple customers on a single device.
- Install anti-virus and firewall systems to protect against regular malware. Researchers believe that hackers need to gain access to a device in order to exploit Meltdown or Spectre, so keeping your devices free of malware can help prevent data theft.
For additional risk management updates, contact Scurich Insurance today.
Read more
Technology can be a risk, especially when it involves your password. You hear about all of the hack attempts on the large corporations, but you don’t hear about the every day person that get’s targeted by a cyber attack. Simply visiting a website could enable your attacker access to your computer. This should push you to protect your most valuable asset, your password! Don’t give the hackers an easy target by not following the simple tips on improving your password.
Improve Your Password
- Change your password every 30-45 days.
- Choose a password between 8-16 characters.
- Use at least two special characters (!@#$%^&*) randomly within your password
- Avoid using family or pet names, dates or common phrases within your password.
- Never reuse or repeat a password across accounts.
Stay Away from COMMON Passwords
Protect yourself (and your company) by making sure you’re not using one of the top 25 most commonly stolen passwords of 2017, as determined by IT security firm SplashData.
- 123456
- password
- 12345678
- qwerty
- 12345
- 123456789
- letmein
- 1234567
- football
- iloveyou
- admin
- welcome
- monkey
- login
- abc123
- starwars
- 123123
- dragon
- passw0rd
- master
- hello
- freedom
- whatever
- qazwsk
- trustno1
Read more
It’s that time of year: Feb. 1 marks the deadline for you to tabulate your annual OSHA Log Summary (OSHA Form 300A) and post it in a common area wherever notices to employees are usually posted.
The summary must list the total number of job-related injuries and illnesses that occurred during the previous calendar year and were logged on the OSHA 300 Form. And don’t forget to leave the Summary posted until April 30.
If you need additional assistance, have questions about recordability, or would like to compare your loss performance trends against national benchmarking data, contact us today at 831-661-5697 for more information.
Read more
On Dec. 22, 2017, President Donald Trump signed into law the Tax Cuts and Jobs Act (Act). The Act makes significant changes to the federal Internal Revenue Code (Code), including changes that impact employee benefits. Effective for 2018:
- Employers cannot deduct expenses associated with qualified transportation fringe benefit programs;
- Employees cannot exclude bicycle commuting reimbursements from their gross income; and
- Moving expense reimbursements are not deductible for employers and cannot be excluded from employees’ gross income.
In addition, effective for 2018 and 2019, the Act creates a federal tax credit for employers that provide paid family and medical leave.
Because most of the Act’s provisions became effective on Jan. 1, 2018, employers should start working with their tax advisors to determine how the tax changes will impact their businesses.
Qualified Transportation Fringe Benefits
Code Section 132 allows employers to provide certain transportation benefits to employees on a tax-free basis. These benefits include qualified parking, transit passes, and transportation to and from work in a commuter highway vehicle (“vanpooling”). Prior to 2018, bicycle commuting reimbursements also qualified for this tax exclusion.
Qualified transportation expenses paid by either the employer or employee can be excluded from an employee’s gross income, up to certain limits. For 2018, the tax exclusion limits are $260 per month for qualified parking expenses and $260 per month for transit passes and vanpooling expenses, combined.
Beginning in 2018, the Act eliminates the employer deduction for expenses associated with a qualified transportation fringe benefit program. The Act also eliminates the deduction for any expenses incurred in connection with providing transportation to an employee in connection with travel between the employee’s residence and place of employment, except as necessary for ensuring the employee’s safety.
However, with the exception of bicycling commuting expenses, the tax exclusion for employees has not changed—qualified transportation benefits are still excludable from employees’ gross income. The tax exclusion for bicycling commuting benefits is suspended for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026.
Qualified Moving Expense Reimbursements
Before 2018, employers could pay or reimburse an employee’s eligible moving expenses related to starting employment at a new principal place of work on a tax-free basis. The Act suspends this income exclusion from 2018 through 2025 tax years.
It also suspends the employer deduction for qualified moving expense reimbursements for the same period of time. However, the income exclusion and deduction still apply in the case of a member of the U.S. armed forces on active duty who moves pursuant to a military order and incident to a permanent change of station.
Employer Credit for Paid Family and Medical Leave
The Act creates a new temporary tax credit for employers that provide paid family and medical leave to their employees. The tax credit, which applies to wages paid in 2018 and 2019, is equal to a percentage of wages paid to employees who are on family and medical leave. Paid leave that is provided as vacation leave, personal leave, sick leave, or required by state or local law is not taken into consideration.
To qualify for the tax credit, an employer must have a written policy in place that provides at least two weeks of paid family and medical leave for full-time employees (proportionally adjusted for part-time employees) and a rate of payment that is at least 50 percent of an employee’s normal pay rate.
Read more
