Sunday, August 31, 2014

Get to Know About Contractors Insurance (CI)

Contractors insurance is a specialized coverage for risks associated with contractor's work as a result of a contract. The purpose of purchasing this insurance policy is to protect contractors against liability arising from personal or employee injury, property damage or in the event of any damage or injury to a third party, for which the contractor is held liable.
Contractors face the liability of being sued because of errors
As a contractor, your workplace is prone to certain hazards such as accidents or injuries and thereby you are likely to be affected by third party claims. It covers medical, legal and compensation costs. Let's take a look at some of the liabilities CI covers.
• General liability: Claims made by clients or third parties for bodily injury or property damage, that are caused due to the negligence of contractors are covered under general liability. For example, an employee accidentally injures a bystander while at work and the bystander sues contractor for causing injury. During such situation, general liability insurance will protect you against lawsuit and also pays for medical bills.
• Employers' liability: In employers' liability, employers are held liable for an employee's accident, illness or death during employment for which the parties may sue you. It covers the compensation for loss of wages and provides medical expenses to the injured employees.
• Public liability: Public liability provides coverage for the risks of being liable to pay damages to third parties or damage to their property. Note that it doesn't provide coverage for claims made by your employees.
Things covered by contractors insurance
It covers for injuries or damage to property of others (not the employee or the contractor himself) that is caused by the negligence of the contractor or employees of the contractors. Things that are covered under contractors insurance are:
• Professional indemnity: This insurance is also known as errors and omissions insurance. This insurance will cover you against claims made by any client who suffered financial loss as a result of your negligence, loss or damage of professional documents, dishonesty, infringement of intellectual property and the like.
• Protection of income: In case you are suffering from ill health or severely injured and you are unable to work, financial compensation is offered for the lost income until you recover.
• Covers expenses of litigation: Lawsuits are expensive because you need to pay court fees, attorneys fees and other costs in connection with a lawsuit. Having been covered under contractors insurance, you need not worry of litigation, and can stay in peace of mind.
Points to consider while purchasing contractors insurance
Now that you understand the importance of having contractors insurance, you need to purchase a coverage according to your occupation. Make sure that you check for exclusions, if any, and also, if any liability the policy does not cover.
To get a clarity on what is covered and what is not, you need to be fully aware of your occupation's requirements and then discuss it with reputed brokerage agencies. They will give you professional advice on which and how much coverage is required for you, as a contractor.

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Wednesday, August 27, 2014

What Are Some Common Forms Of Contractors Insurance?

Contract construction work will require that a licensed contractor have adequate and proper construction insurance for contractors. Having the right policies will offer protection to the owner, the employee, and the project owner. By choosing the correct coverage, a construction owner can rest easier and the project owner will know the company he or she is working with is professional and well prepared.
The basic insurance that all contractors need is general liability to cover any claims that have to do with damage to property and bodily injury while on the job. This coverage does not cover damage to the owner's property or equipment. However, it can be made specific to cover issues like work done underground or for fire and explosions that could result from employee mistake.
When your company also provides engineering or design services, or any type of information that relies on your employee's calculations, you will want an Errors and Omissions policy. Making a mistake at the very beginning of a project that is not found could jeopardize the entire project.
Protecting company equipment while in transit and while on site will require risk insurance. This will also cover building materials while at the site. This coverage will protect from damage due to weather like tornadoes, hurricanes, and fire. It will also cover theft. Policy terms last from start to finish of each project.
Coverage for company vehicles can be added to the general liability policy. This will cover the owner, the person contracted to, and anyone directly affected by the work being done. It covers property damage done to others due to actions of you or an employee. Bodily injury will be covered for injury to another in the course of work.
Protection after a project is completed is simple called completed operations. This will insure completed work that was done incorrectly and caused damage. Water damage due to improperly fitted pipes or a fire due to a mistake in electrical wiring would be protected.
Employees are protected from lost wages and medical costs in the event of an on the job injury. The employee's family is due a death benefit if the situation is catastrophic. This and any disease contracted due to exposure on the job are all in Part A of Worker's compensation. Part B protects the owner when the employee waives the coverage in order to sue the employer if he or she sees fit.
The coding of work comp insurance is exacting and time consuming. Some companies track each partial hour of an employees work to assign the correct code. The code produces a cost per hour that an employer must pay. A secretary will have less exposure and less risk, therefore a much lower hourly code rate than a window washer for skyscrapers will. Having experienced and knowledgeable people tracking codes can be a great cost savings to the company.
The best place to start when looking for an agent is by personal reference and by searching the internet. By typing in construction insurance agency and your zip code, you will get local agency contact information. Call a few agencies and get quotes so you can compare. If pricing is fairly even across your choices, base the decision on your interaction with the agency and its employees. They will be your guide in helping you choose the right coverage for your business.

Sunday, August 24, 2014

Protect Your Home Against An Earthquake!

This video is from the Insurance Information Institute. For more information about insurance, go to the I.I.I. Website at

Thursday, August 21, 2014

The Basic Info Regarding Contractors Insurance

Contractor liability insurances are the monetary protection which building contractors anywhere need in the countenance of millions of diverse things which are going wrong in little or big job. This insurance protection is not only a luxury but a great necessity. As matter of fact, contractor accountability insurance is required mostly in majority of projects by the financing corporation. But whether an individual is just an ordinary cabinet installer or a major general, a contractor liability indemnity is one of the means to stop from worrying every day regarding that unavoidable accident.
Insurances for contractors are complete coverage plan intended to safeguard contractors while conducting their business. Having coverage will minimize the dangers to the business of the contractor by changing it to into his assurance company. This policy grants a security net if any untoward incident happens in the job.
The facts
Majority of contractors believe that insurance coverage is very necessary. There are diverse types of coverage accessible to increase general liability to expand the protection of the contractor. Some insurance policies contain workers compensation, surety bonds, property liability, pollution liability, railroad protective liability, builder's risk, owner's and contractor's protective liability, and products and accomplished operations coverage. It is mandatory for contractors to carry indemnity, depending on the status of the operation.
Contractors have peace of mind if they have this insurance because they know that they are protected and they do not worry of losing their business if anything goes wrong. If something untoward occurs, the insurance company will work for them by granting coverage for lawful fees and will conduct their own comprehensive investigation. This guarantees that the claims made against the assured persons are meritorious. Purchasing insurance provides the contractors the opportunity to protect more projects because of the safeguard it grants the corporation engaging those services.
Contractors insurances protect the company by paying for compensation to property or medical expenses for an injured worker that happened in the job site. In return, the owner or contractor pays for the premiums that transmit the accountability of paying for the claim to the insurance company. The kind of work and danger associated, and the amount of coverage applied for is considered when the insurance group grants a payment offer.
Even if the insurance is non-compulsory, contractors might find it difficult to secure job without it. More work offers appear with the provision that contractors may guarantee his job or they will pay for the damages if something wrong occurs. Contractors were even cited for breach of contract since they were not able to generate their certificate of assurance in opportune manner.

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Sunday, August 17, 2014

CalChamber Capitol Report: The Cost of Doing Business in California

(August 13, 2014) California businesses on average have 19% higher operating costs per job than businesses in the rest of the country, according to a st​udy released by the California Foundation for Commerce and Education (CFCE).

Thursday, August 14, 2014

Contractor Insurance - Overview

Contractor insurance is an essential element of running a contracting business and comprehensive insurance cover can mitigate the impact of events such as thefts, an investigation by HMRC or even the threat of legal action and compensation arising from client accusations of negligence.
Umbrella company contractors are normally covered by their umbrella company employer's policy, but limited company contractors must make their own arrangements to ensure they have adequate cover in place to satisfy business and client requirements.
Insurance types to consider
There are three main categories of insurance that contractors should consider:
  • Office
  • Professional indemnity
  • Tax investigation.
A comprehensive office policy would normally include public liability and employee liability, legal requirements for trading limited companies, plus home office contents and portable equipment cover for business equipment, such as laptops and mobile devices.
Professional indemnity insurance, also known as 'PI', will provide the funds to cover legal advice if a client levels accusations of negligence against a contractor, and may also cover any payouts for compensation. Most clients, particularly those in the public sector, require that a contractor limited company has at least £1m in PI cover.
Tax investigation insurance covers the cost of accountants and other expert assistance in the event of an investigation by HMRC. A routine compliance visit by an inspector may only cost a few hundreds of pounds in an accountant's time, but if the investigation develops into a full-blown IR35 case, the cost of an expert defense can run to tens of thousands of pounds, which could financially ruin a contractor who does not have insurance.
Choosing the right policies
Not every contractor's insurance needs will be the same. Some contractors may have requirements unique to their sector, or could have business premises, such as an office or workshop, that require specialist cover.
A specialist small business insurance broker will usually assess a contractor's insurance requirements as part of their service and then actively seek out the most appropriate policies for the contractor's specific needs from the market.
Alternatively, it is possible to obtain a comprehensive package of insurances directly from an insurance company, but contractors should ensure the insurer understands the contractor marketplace and has a track record in providing contractor insurance products.
Contractor insurance costs
As most policies will be individually tailored to a specific contractor's needs, each policy is priced accordingly. Buying insurance in a bundle direct from an insurer or via a broker is usually more cost effective than buying different policies direct from different suppliers.
As a rule of thumb, a comprehensive office policy costs a few hundred pounds, PI insurance from a few hundred to several thousands, depending on the amount of cover required and the type of services the contractor provides.
Tax investigation insurance comes as a benefit of PCG membership. If bought separately, it can cost a few hundred pounds a year, and compared to the potential cost of an investigation, it is generally a worthwhile investment.

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Monday, August 11, 2014

CalChamber Capitol Report: New Liabilities on Business​​​​ (AB 1897)

(August 11, 2014) CalChamber Policy Advocate Jennifer Barerra urges members to ask senators to oppose a “job killer” bill that forces one employer to be liable for another’s employment obligations and creates significant costs for the General Fund.

The bill, AB 1897​, unfairly imposes liability on a contracting entity for the contractor’s wage and hour violations and lack of workers’ compensation coverage despite the lack of any evidence that the contracting entity controlled the working conditions or wages of the contractor’s employees.

Thursday, August 7, 2014

7 Key Things Sub - Contractors Must Check Before You Sign That Contract!

1 Who Are You Actually Contracting With?
OK, I accept that this sounds really obvious but how much do you actually know about the organisation that you are getting into a contract with? More importantly will they be around to pay you when the time comes?
There will always be other factors to take into account when deciding on whether or not to enter into the contract. Not least of which, will no doubt be your workload at the time. It is obviously much easier to be selective in times of plenty.
Being willing to place an order with you is only one small part of what you should be looking for in a relationship with a customer. A customer that is likely to become insolvent, or who can't or won't, pay is worse than no customer at all and a customer who takes too long to pay, makes unreasonable reductions or sets off money unfairly, could turn out to be your worst nightmare!
You cannot rely solely on the apparent size of the customer. Not all large companies pay their debts on time and some national contractors are the worst payers of all.
If you have worked for an organisation before, then you will have a pretty good idea as to whether or not they pay on time or are quick to make deductions or raise set-offs.
However, don't assume that because the Manchester office of XYZ national contractor is a good payer, the same will apply to the Bristol office. A lot will depend upon the particular circumstances within that company and within each branch. Whether things go well, may come down to your relationship with individuals within an organisation rather than the inherent culture of the organisation itself.
As a minimum, bank and trade references should be followed up. However, I would advocate making as detailed an enquiry as possible from other Specialist Sub-Contractors who have worked for this organisation. Ask about the culture of the organisation and whether or not they are helpful or unhelpful to their sub-contractors in respect of payment.
Ask about individuals involved and whom you can and cannot rely upon. Ask how easy it is to agree interim applications, variations etc and whether or not they are prone to making reductions or set-offs. Most important of all, ask whether or not they always get paid on time.
Don't be shy about making these enquiries or concerned that making them might cause offence to potential customers. In well run, objective organisations nothing should be further from the truth and reputable companies will respect your professionalism.
2 Scope of the Works
This may sound really obvious but you would be surprised how many disputes I have resolved for Specialist Sub-Contractors where the Sub-Contractor and the Contractor disagreed about the scope of the works included in the contract.
I accept that it is a chore but you neglect this at your peril. Check carefully that what you thought had been agreed during the tender and negotiation pre-contract period, has actually been properly incorporated into the contract.
Check that the Contractor or Client hasn't added in references to documents or specifications you haven't seen, and be wary of phrases such as "necessarily implied from".
I have seen this blatantly used by a Contractor to deliberately add works into my client's scope that my client had definitely not priced. And at a seminar where I used this example one of the delegates told me about his son who was training to be a QS with one of the major Contractors. His son had told him that he was trained how to use this very technique!
If in doubt go back to the Contractor or Client and make sure the written document properly reflects what has been agreed. You must make it clear in writing to the Contractor exactly what you have priced to do before you start work on site or do design work or anything else that could constitute acceptance. Don't sign any documents until you are satisfied that they only refer to the scope of works that you have priced.
3 Time/Programme
Time is a tricky little sucker to get right!
First check whether you are going to have one start and finish date or are going to have to complete the work in sections. If the work is to be completed in sections then you need to be especially careful. Make sure the start date and any notice to start period is what you agreed and be wary of large "windows" for starting the works. I have seen clients being asked to agree to a 3 month window for starting the works on a weeks notice!
Make sure the period for carrying out the works is clearly stated and confirms what has been agreed. Do not agree to "work in accordance with the Contractor's programme" or "as per our site requirements" or any other form of words that Contractors can twist the meaning of and use against you!
If in any doubt get it clarified and agreed before you sign up or start any work.
4 Price and Discount
Trust me I have resolved lots of disputes involving price and discount. It happens all the time, so please don't let it happen to you. Check that your price has been properly incorporated along with any tender summary or amendments and clarifications that have been agreed. If you are relying on any qualifications in your tender make sure they are not "lost" because of terms like "...the Sub-Contractor acknowledges that all terms and conditions of his quotation are excluded".
If you negotiated a one off discount on your price to win the job then make sure the contract clearly states that this discount does not apply to the valuation of work instructed as variations. In days gone by (that unfortunately I am old enough to remember) Main Contractor's Discount was linked to prompt payment. There is no such provision in most modern Standard Form contracts. So if the contract mentions discount make certain you know what it applies to and how it will work in practice.
5 Payment Terms
Again this might sound like an obvious thing to check but you might be surprised how many times this becomes a problem. Make sure that you understand how long the payment period actually is. These days contracts normally refer to a "Due Date" and a "Final Date for Payment". You also need to be clear about what other events or circumstances have been linked to payment.
For example;
21.2.1 The first payment shall be due 30 days after the Sub-Contract Valuation Date next following the date of commencement of the Sub-Contract Works.
21.2.2 Interim payments after the first payment shall be due 30 days after the Sub-Contract Valuation Dates thereafter.
21.2.3 The final date for payment for the first and interim payments shall be 30 days after the date when they become due.
Now, you could be forgiven for having skim read this and thought it's a 30 day payment period.
What it actually says is that the first payment and the following interim payments shall be due 30 days after the Sub-Contract Valuation Date. That is not due in the sense that it is "due" for payment on that date!
So, the payment becomes "due" 30 days after the Sub-Contract Valuation Date. The final date for payment for the first and interim payments shall be 30 days after the date when they become due.
In other words 30 days plus 30 days is 60 days from the Sub-Contract Valuation Date!
In this particular instance you should also be clear that the contract sets out the Sub-Contract Valuation Dates, because that is what triggers the payment sequence. Make sure that these dates are only a month apart they could quite easily be longer! You should also ensure that the Sub-Contract Valuation Dates go on beyond the end of the planned Sub-Contract Period, and if the works are delayed you should ensure that an extended list of dates is agreed.
6 Design Liability
As Specialist Sub-Contractor you will be liable for any design you provide if that design subsequently proves to be faulty. You need to be very clear that your design liability is restricted to reasonable skill and care, and that the far more onerous standard of fitness for purpose does not arise. Unfortunately it is all too easy to get this wrong!
Similarly, this is one situation where it isn't necessarily what the contract says, but what the contract doesn't say that gives rise to the much more onerous standard! If the contract is silent about design liability then your liability will be the far more onerous standard of fitness for purpose.
Why is this so important? Well, fitness for purpose basically means you are guaranteeing that your design will satisfy the end users needs irrespective of what you did or didn't know about his business and irrespective of what it says in the enquiry or specification.
A major consequence of this onerous liability is that it is highly unlikely that your professional indemnity insurance will reimburse any resultant losses where you have failed to provide the guaranteed result. In other words they will void your cover!
Your obligation to produce a design which is fit for its purpose is an absolute duty independent of negligence. It is a duty which is far greater than that imposed upon a professional designer employed solely to design, as the professional would only be liable if (in the absence of an express provision) he was negligent.
Express provisions to the contrary will obviously negate any implied terms. In other words a specific clause which defines your liability must be incorporated into your contract and that clause must restrict your liability to reasonable skill and care.
The implied obligations of the professional have been developed in the medical and legal professions where a result cannot be guaranteed. The kind of liability that arises when a Specialist Sub-Contractor designs and installs has its root in the law related to sale of goods where the law imposes an obligation to supply goods fit for purpose where the purpose is made known to the seller and the buyer relies upon the seller's judgement.
Most standard forms of building contracts provide a clear distinction between the duties of the designer and the duties of the builder, so that if a building proves to be faulty because of both design and construction faults the Employer is faced with bringing an action against both the designer and the constructor.
The principle behind a design and build contract is that the Contractor and his Specialist Sub-Contractor are responsible for both design and construction.
The Courts have readily implied the following terms into design and build contracts.
1. That the work will be carried out in a workmanlike manner 2. That materials of good quality will be used 3. That the materials and work (including design) will be reasonably fit for their respective purposes.
Lord Denning M R in Greaves and Co (Contractors) Ltd -v- Baynham Meikle and Partners (1975) said;
"Now, as between the building owners and the Contractors, it is plain that the owners made known to the Contractors the purpose for which the building was required, so as to show that they relied on the Contractor's skill and judgement. It was, therefore, the duty of the Contractors to see that the finished work was reasonably fit for the purpose for which they knew it was required. It was not merely an obligation to use reasonable care, the Contractors were obliged to ensure that the finished work was reasonably fit for the purpose."
Lord Denning's comments were reinforced by the House of Lords in IBA -v- EMI and BICC (1981) where Lord Scarman said;
"In the absence of any term (express or to be implied) negating the obligation, one who contracts to design an article for a purpose made known to him undertakes that the design is reasonably fit for the purpose."
7 Dispute Resolution!
Last but by no means least you need to know that your rights have not been compromised by Contractors or Clients!
If the contract between you and the Contractor or Client is subject to the Construction Act (The Housing Grants and Construction Act 1996) the contract should have certain provisions which provide some degree of protection. But beware that these have not been negated by the specific words of the contract!
Suspension For Non Payment
Exercising your right to suspend performance is a very effective way to get paid!
The right to suspend may not be exercised unless you have given written notice of your intention to suspend performance. The period of notice is the bit that the Contractors will change to make it more difficult for you. The time period in the Act is 7 days but there is nothing to stop them extending this period to 14, 21 or even 90 days!
Any valid period of suspension automatically confers on you a right to an extension of time under the contract and where the contractual time limit has been set by a date rather than a period the date for completion is deemed to be adjusted automatically.
Having the right to suspend performance for non payment is not a statutory right unless the Act applies, so it is a good idea to ask for such a provision to be included into those contracts where the Act does not apply.
Adjudication is a statutory procedure by which any party to a construction contract has the right to have a dispute decided by an adjudicator. It is intended to be a quick process and it can be cost effective when handled properly. 
  • It is normally used to obtain payment but most types of dispute can be adjudicated.
  • It is a very quick process and the adjudicator must generally decide the dispute in less than 42 days.
  • The adjudicator's decision is temporarily binding and can be enforced by the Courts
But in the vast majority of cases the parties accept the decision as binding.
However, the way that some Contractors put a stop to this very effective remedy is to make you responsible for all the costs!
In Bridgeway Construction Ltd v Tolent Construction Ltd (2000) TCC the issue was whether a provision in an adjudication procedure on the matter of costs was void if it inhibited a party from pursuing the remedies provided by the adjudication process.
The subcontract between Bridgeway and Tolent incorporated the CIC Model Adjudication Procedure, but with amendments. Two amendments were relevant to the issue of costs. A new clause 28 had been added which stated:
"The party serving the Notice to Adjudicate shall bear all of the costs and expenses incurred by both parties in relation to the adjudication, including but not limited to all legal and expert fees."
A new clause 29 stated:
"The party serving the Notice to Adjudicate shall be liable for the adjudicator's fees and expenses."
Bridgeway the subcontractors made an application to the adjudicator and the adjudicator awarded them a sum of money. Bridgeway also asked for their costs, but the Adjudicator rejected this request because of the terms of the contract.
Unfortunately, in the ensuing court case his Honour Judge Mackay had no alternative but to decide that the clauses were not void, nor voidable. In this case the alterations were to a CIC Model Procedure and not alterations to any Act of Parliament.
It is obviously a decision that the Contractors love and Specialist Sub-Contractors are stuck with until the Construction Act is amended to prevent this blatant abuse of the Act. As the law stands Contractors (bless their black hearts) can still get away with adjudication clauses that effectively take away your right to adjudication by making you responsible for all the costs!!

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Friday, August 1, 2014

CSLB Sand Fire Aftermath Outreach, July 31, 2014

Video shot July 31, 2104 in El Dorado County, CA.
The Contractors State License Board (CSLB) and the El Dorado and Amador County District Attorneys’ Offices have joined forces to prevent unlicensed contractors from causing further harm to victims of the Sand Fire that erupted on July 25, 2014. The blaze is nearly contained after destroying more than 4,000 acres and dozens of structures. Opportunists who prey on disaster victims in the rural El Dorado or Amador County areas during rebuilding efforts could find themselves facing felony charges if they are not licensed to perform the reconstruction work, or violate any other state contracting laws.