Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
Contract Surety Bonds
You don’t hear about government entities using stimulus funds on uncompleted public works projects despite numerous contractor failures during the recent economic downturn. Why is this? Public works projects have a third-party guarantee that ensures that projects are completed and that all bills to subcontractors and suppliers are paid. This guaranty is offered by a surety company and the guarantee is known as a surety bond.
The surety concept is not new. Originally it involved an individual providing surety for another individual. As a result of federal taxpayer losses on uncompleted construction and service contracts in the late 19th century, there have been several pieces of legislation enacted to protect taxpayers from these types of losses. The late 1800s saw the advent of well-funded corporate sureties stepping into the surety bond marketplace. They served as a mechanism to encourage trade over long distance.
Currently, the Miller Act at the national level and “little” Miller Acts at the state level require a surety bond in place on all public projects. However, they do have varying thresholds as to when they are required. For instance, a performance bond is not required on federal contracts under $100,000.
An entity looking to obtain surety “credit” must pass a rigorous prequalification process, much like obtaining a bank loan. The surety evaluates the contractor’s credit, financials, and experience to determine if it will extend surety credit. This process also serves to assist government entities in making sure that only the most qualified contractors are able to bid on government work.
As the New England Regional Director of the National Association of Surety Bond Producers, we work in conjunction with the surety industry to make certain smaller and minority contractors get qualified to participate on government contracts. If you have any questions or think you may be a candidate for a contract surety bond, contact Michael Regan at Cleary Insurance.
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. We are members of the National Association of Surety Bond Producers (NASBP), the professional organization for agents that also specialize in surety bonding. Give us a call today at 617-723-0700.
Automated External Defibrillators in the Workplace
Automated external defibrillators (AEDs) significantly improve survival rates for sudden cardiac arrest victims. AEDs are easy to use and inexpensive, with the cost for a unit starting around $1,200. They are an important consideration to protect your employees and your customers. Commercial properties, health clubs, restaurants, and retail establishments are especially likely to see sudden cardiac arrest cases in customers. AEDs are also an important consideration for the office, job site, or manufacturing area to protect employees.
OSHA estimates that there are 890 deaths due to cardiac arrest outside of hospitals each day. CPR can buy time but often will not result in resuscitation. The chances of survival diminish by 7% to 10% for each minute that passes after the onset of cardiac arrest. Studies indicate that survival rates rise to the 50% to 60% range when a shock from an AED is administered within three to five minutes.
AEDs are extremely easy to use. The devices provide verbal instructions for the user throughout the process. Manufacturers typically provide a DVD for training along with printed instructional material. It is certainly recommended that at least some employees receive formal training, but the devices are designed to be operated without prior experience.
The cost of AEDs has fallen over the years, so that a quality machine can be purchased in the $1,200 to $1,500 range. The units self-test daily and provide a verbal/visual warning if the batteries are low or the pads obsolete. Batteries typically last for five years and can be replaced when used up.
Most states have passed legislation providing certain legal immunity to AED operators in order to encourage their use. For example, the Massachusetts “Good Samaritan Law” states that a person who “attempts to render emergency care including, but not limited to, cardiopulmonary resuscitation or defibrillation, and does so without compensation, shall not be liable for acts or omissions” (MGL —Chapter 112, Section 12V). A number of states require that certain businesses, such as health clubs, have at least one AED on site.
AEDs are proven life savers, affordable and easy to use. Installing them in the workplace and encouraging CPR training demonstrate a strong commitment to employee and customer welfare. We recommend that you consider adding AEDs to your workplace.
The following websites provide additional information about AEDs:
http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXVI/Chapter112/Section12V
http://www.osha.gov/Publications/osha3174.pdf
http://www.heart.org/HEARTORG/CPRAndECC/CorporateTraining/HeartsaverCourses/Heartsaver-CPR-AED-Online-Part-1_UCM_303283_Article.jsp
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.
MA Workers Compensation Rates
The Commissioner of Insurance disapproved the Massachusetts Workers Compensation Rating and Inspection Bureau rate increase filing scheduled for September 1st. The obvious good news is that rates are not going up on September 1st. Conversely, the bad news is that this is not necessarily a good thing for everyone!
Workers Compensation rates over the past decade have dropped significantly as various reforms were implemented. However, rates have not kept pace with the increases in medical costs. Insurance carriers have watched margins drastically decline on this line of business and have been closely monitoring what Insurance Commissioner Joseph Murphy was going to do. Now they know.
Why is this potentially a bad thing for employers?
Insurance carriers are going to be conservative when underwriting new business and re-underwriting existing business. They will be looking for the best possible risks. If you are in a less than desirable class of business, have questionable loss experience, marginal safety and return to work programs you will, if offered terms, find them much different (i.e., not in your favor) than your prior plan year policy. If not offered terms, guess what? You will go into the Workers Compensation Assigned Risk Pool. Not a great alternative. (I predict a doubling of the pool population in 2013!)
What to do?
Be proactive. Find out how this is going to affect your next renewal. What is the stance of your existing carrier? Be prepared to tune up your current safety and return to work programs. Aggressively work to reduce reserves and close claims before marketing your program. This is especially critical if you are on a loss sensitive plan.