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What if your roof collapsed tomorrow?


connecticut winter storm 2011Most contractors don't have major property insurance concerns for their own building.  Usually it's extremely large or ornate, because most of the time their employees are out in the field. Building, repairing, servicing, grading, driving, digging, and climbing; rather than working from the office.  In my time in the insurance industry, I don't think I've ever said to a client or prospect "What would happen to your company if your roof collapsed tomorrow?"  Most of the time, the line of questioning goes something like:

"What would happen to your company if you had a hostile fire that burnt your building to the ground?"

More often than not, the response is something like:

"Total loss is impossible, the building is brick." 

"Not a concern, we have an up to code sprinkler system."

More often than not, it doesn't seem worthwhile to push back on either of these objections because historically, these types of losses are extremely rare.  This winter in Connecticut, things are a little different.  I've lived in Connecticut for most of my life, and can't remember when the potential for roof collapse from snow load has been greater. (I wasn't born yet when the Civic Center's roof collapsed) There have already been established businesses and recently built homes that have already had collapses.  The governor has already advised residents and business owners to clear snow from their roofs prior to the winter storm event that is underway as I type this post.

So, what if the roof on your construction company collapsed tomorrow because another two feet of snow fell on it?

Do you have your plans, drawings, blueprints, invoices, change orders, etc backed up somewhere off-site?

Do you have your computers and building contents insured to value?

How long would it take to get a roofing contractor out to rebuild your roof?

Do you have enough cashflow and a long enough backlog of work to sustain the company during this time?

Do any of your employees have the ability to work from home?

How many employees would you lose during the reconstruction?

Disaster recovery plans are often overlooked and not seriously contemplated by business owners due to the low probablity of a major disaster actual crippling their business and because they purchased business interruption insurance (the coverage with the fun worksheet). But if something did happen, wouldn't you want to be up and running as quick as possible in order to save your business and keep all of your clients from going to a competitor?

We've found Agility Recovery Solutions to be an affordable solution to these daunting questions.

As some final food for thought, what if you're a roofing contractor and you start seeing completed operations claims for roof collapses on roofs you built or serviced?  Does your umbrella follow form on your GL policy?  Does your GL policy have the right completed operations endorsement? 

Update from the Hartford Courant

Does Your Construction Company Have a Safety Committee?


Or maybe I should ask if it is active?  Or maybe you haven’t formed one as yet. 

The Connecticut Worker’s Compensation Commission Regulations require employers meeting the following guidelines to have a Safety Committee:

  • 25 or more employees at any single work site, or;
  • A Work–related injury and illness level that exceeds the average incident rate.

 So, whether your Connecticut construction company doesn’t have a Safety Committee, or it has gone dormant, here is some information to get you in high gear!

Safety committees need to be comprised of both labor employees and management employees, with at least 50% of the committee being comprised of Labor employees.  All departments or major activities of the employer should have representation. Committees are usually comprised of 4-8 people and members usually change annually. 

Whether it’s your initial meeting, or you “re-start” meeting, you should begin with electing a Chairperson and Secretary.  You should establish how often you will meet and if possible establish a set day and time for future meetings so everyone will be able to automatically have this on their schedule.  Also, make sure to pick a meeting schedule that is realistic, such as once a month or quaterly. The secretary must take notes beginning with this first meeting and should publish them for all committee members.  Notes should be retained in a file, as it is possible that an OSHA representative may pay you an unexpected visit and request this information!

The purpose of these meetings is to heighten awareness of safety and for the committee and upper management to make a commitment to reduce exposures and provide training and education to make your business or construction job site a safe place to work!  Inspections of work areas and job sites as well as discussions of accidents and near misses are some of the items you should have on your standard agenda.  Ask for safety suggestions from all your employees – make them an active part of the safe workplace!

The number one place to start reducing injuries is at the Safety Committee Meetings!

safety resized 600If your construction firm needs help starting a Safety Committee, CRA has an on-staff loss control/safety specialist who would be happy to help.  Give us a call at (800) 252-9864 or drop us a line to schedule a meeting.

Correlations between Contractor Insurance and BP


connecticut constrution insuranceOne in a Million. A phrase that has been mentioned many, if not hundreds of times since the Deep Water Horizon Oil Rig sank over two months ago in April 2010. It has been mentioned by numerous sources that BP has a reputation for being less than prudent with their risk management efforts. We saw the result of this in 2005 when their Texas City refinery exploded, killing 15 and injuring almost 200 more, and then again this year when the Deep Water Horizon Rig sank, killing 11 and injuring 17. The explosion notwithstanding, I'm still very curious why a company would dig a mile down into the ocean without any plan to stop it if it were to rupture. The reason is that this was a Black Swan event. An event that no one seriously anticipated, and an event that BP CEO Tony Hayward considered one in a million. He acknowledged that it was possible, but the chances were less that slim to none that it would happen during his tenure at BP, and therefore didn't see any reason to spend time or money on a plan to contend with a worst case scenario.

Let's change it around a little. Say you're a Connecticut construction company, shopping your insurance around. You send your agent out to 15 different insurance markets and have them come back with prices. Even if those 15 insurers did offer you pricing, no agency has the time or resources to be able to comprehensively compare 15 different insurance policies to each other. Especially the types of policies that are written for construction insurance. But that doesn't matter, because you got a good price and have never had a major claim and your agent takes you golfing sometimes. It's tough to compare a run of the mill Connecticut construction insurance policy with a fully self-insured entity like BP, but the correlations between haphazard risk management definitely exist.

In my time in this industry, I've spent a solid chunk of time talking to contractors about insurance. It is extremely rare that there is ever a discussion initiated by the contractor that revolves around buying the coverage to fully cover their risk for everything that could happen in their course of work. More often than not, these conversations center around buying just enough coverage to be able to bid on work, rather than buy anything that isn't explicitly required by an upstream contract. But what happens when one of your heavies crashes into a school bus because the operator was texting on their phone? Is a 2 million dollar umbrella going to be enough? What happens when you're working near water and you dump a barrel of hydraulic fluid into the local water table? Did you skimp on a pollution policy because you've never had a pollution claim before? These, and similar types of losses occur to contractors every year, and more often than not will not only exponentially jack up your insurance rates and make it very hard to secure insurance via standard markets, but they have the very realistic potential to put your company out of business. The company with your last name on the trucks. The company your great grandfather started with 2 pickups and a few shovels. Is it worth it to save a thousand dollars a year on your construction insurance?

I wonder if Tony Hayward is wondering if he ‘bought enough insurance'? His company has much deeper pockets than yours, and they've already paid two billion out. By the time business interruption claims start coming up, or a hurricane blows tarballs of oil a mile inland, they'll be reaching further and further into their pockets.

We know that money is extremely tight right now for Connecticut construction firms, and that a low price on insurance can make the difference between making payroll or not, but this buying on price alone mentality existed well before the economy went down the tubes. Instead of saving money, save your company. Protect it from every risk that could befall it. Even the black swan one in a million claim.

If you don't want your company to be the next BP, give Construction Risk Advisors a call. Their staff has over 100 years building and servicing bulletproof Connecticut Construction Insurance policies. We know what can happen, and we know how to help you prevent it through contractual risk transfer, as well as make sure you have the right coverage in place when it does.

How Fast Do Workers Compensation Claims Need to be Reported?


Is the timely reporting of workers compensation claims really that important? Absolutely! The smallest claim can turn into a 6 figure nightmare merely by not being reported promptly. A delay of just a few days can alter the outcome of a claim and raise the associated claim dollars through the roof!

Having trouble believing this? Well, here are some reasons:

First and foremost is treatment for the injury. We have seen many "sore shoulders" go unattended only to end up with the employee seeking treatment in the middle of the night at the local Emergency Department. The charges for Emergency Room visits are easily 3 times those of an Occupational Health Clinic, so the medical costs of this incident just tripled. Emergency room providers are great at what they handle - emergencies! But they tend to handle the work related injury by automatically keeping the employee out of work an average of 3-5 days .....another increase to the cost of the claim!

Those same shoulder and soft tissue injuries that went untreated for several days, can eventually become major surgery issues, lost time claims with substantial permanency ratings, and in many cases full and final settlements. By reporting the claim immediately, the employer can and should direct the injured worker to the local occupational health clinic thus hopefully mitigating the overall cost of the claim.

An employer should never delay reporting a claim or directing the injured worker for treatment. Either of these can result in a disgruntled employee who ultimately hires an attorney. Attorney involvement on Workers' Comp claims slows down the progress of the claim resulting in increased dollars.

Insurance carriers have specific time lines in which to make payment to a claimant and meet other standards. If these are missed due to a claim being reported late, the carrier can still incur fines for not meeting required deadlines. These fines become an expense on your Workers' Comp claim!

Hopefully these are reasons enough for you to encourage your employees to report all incidents immediately and for you to report the incident to the carrier the same day. This quick response can help contain your claim dollars as well as keep your experience mod and premium lower that your competitors!

If one of your construction laborers or foremen were injured on the job, does your construction firm already have an established relationship with an Occupational Health Clinic?  Did your insurance agent help you with this and provide job descriptions for the clinic to keep on file?  Construction Risk Advisors has relationships with many of the occupational health clinics that treat injured Connecticut contractors every day.   We can help facilitate this for your company as well as work together to prevent the claim in the first place!

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