What Is Completed Operations Insurance?

Your business’ product or completed operations away from the location of your business are covered under the Products-Completed Operations coverage. Your business can be covered if it causes property damage or bodily injury.

General liability policies usually include coverage for completed products operations. Once operations are completed or abandoned, it covers liabilities arising from the insured’s products or business operations that are conducted off-premises.

When a contractor’s contracted operations have ended, completed operations insurance protects him or her from liability for property damage or injuries to third parties. Completion of operations insurance usually applies to construction products as well as goods and medicines made by consumers. Completion operations insurance is most commonly included in general liability insurance. Additional or separate policies may be purchased by contractors and manufacturers for losses and injuries incurred off their properties that exceed their general liability limits.

By purchasing completed operations insurance, contractors and manufacturers transfer their risks to a third party. In addition to completing work, contractors must take precautions to avoid liability expenses.

Contractors and manufacturers can maintain financial stability as they settle claims with completed operations insurance policies. It can defend you against claims of negligence and breach of contract. In the case of damage resulting from the work of the contractor or from their products, the coverage provides reasonable compensation. Punitive damages may be settled through indemnity insurance. In the event of a product recall, complete operations insurance isn’t applicable.

Insurance for Completion Operation Contractors’ insurance covers legal defense and any judgments or settlements resulting from accidents associated with completed work covered by the policy.

An explanation of workers’ compensation class codes

The workers’ compensation class codes are used by insurance companies to understand the types of work their customers do. In this way, companies can categorize work areas according to the level of risk estimated. Workers’ compensation cost can thus be precisely determined by insurance companies.

Workers’ compensation insurance rates are based on NCCI’s classification system, which contains more than 800 unique class codes. The National Council on Compensation Insurance is referred to as NCCI. States and insurance companies rely on them for statistical data.

Workers’ compensation insurance in a nutshell

In the event of workplace injuries, workers’ compensation insurance provides medical and wage replacement (compensation) benefits. Compensation is available only for injuries occurring in the course of ordinary business operation.

Businesses with employees in California are required to obtain workers’ compensation insurance from an insurance company or from the state fund.

There are large businesses that do not purchase insurance policies from insurance companies and are instead self-insured.

Additional Insured Endorsements for Contractors

Contractors can’t ignore the importance of financial protection, no matter what sector they work in. You will also be protected from lawsuits and damages if you have a contractor’s insurance policy.

Here’s how it works

The purpose of contractor insurance is to provide financial protection to your business if it is involved in an accident or a peril that causes financial loss. An insurance policy is an agreement between a firm/individual and an insurer. A specific premium amount will be charged as the price of insurance coverage, which you will receive from the insurer if damages occur. In essence, you’ll be able to choose what kinds of coverage you want to protect, which will depend on your preferences, budget, and needs. Depending on the terms outlined by the signed contract, financial coverage will be provided.

Contractors are sometimes required to show proof of insurance and enlist the client as additional insured on their commercial general liability policies. It is common for a certificate of insurance to accompany an endorsement as evidence of coverage.

An additional insured endorsement can be obtained by contractors

Aside from the requirements, restrictions and complexities that come with every insurance policy, getting an additional endorsement also has its own peculiarities.

As a first step, you need to define who you want to include in the endorsements. You can add an additional insured either as an individual or as an organization. Depending on the purpose of the additional endorsement, the wording may differ. It can be obtained for ongoing or completed operations.

ONGOING OPERATIONS

COMPLETED OPERATIONS

BLANKET ADDITIONAL INSURED ENDORSEMENT

A blanket additional insured endorsement, also called an automatic endorsement, allows for a contract to automatically include those entities and individuals as AIs.

Licensing requirements for contractors in California

Contractors must comply with laws specific to each state in the United States. Contractors State License Board (CLSB) of the Department of Consumer Affairs handles this responsibility in California. In addition to providing administrative services to contractors and clients, the board is responsible for investigating complaints.

Licensing requirements for California contractors

License requirements for becoming a contractor in California include:

-           Be at least 18 years of age

-           Be a U.S. citizen or legal resident

-           Provide passport photographs

-           Hold a $15,000 worth of bond

Is there a need for a license?

The CLSB requires licensing for any project (materials and labor) that costs $5,000 or more. It refers to the construction or modification of any structure, including buildings, roads, highways, parking lots, excavations, and railroads. All contractors and subcontractors, as well as anyone engaged in business, must comply with the regulation. Prior to submitting a bid for a job in this state, it is essential to fulfil this requirement.

Working without a license carries penalties

In California, operating as an unlicensed contractor is a criminal offense. Any offender can be prosecuted criminally or civilly. Contracting work for jobs worth $500 or more, or presenting yourself as a contractor for jobs worth that amount will result in legal or criminal action.

DESCRIPTION OF THE FIRST OFFENCE:

A fine of $500 and/or up to six months in jail is the most common punishment for this. A fine of $200 to $15,000 may also be imposed depending on the outcome of the investigation.

VIOLATIONS SUBSEQUENT TO ORIGINAL VIOLATIONS

Following a second conviction, the fine could increase to 20% of the total project price, or $4,500. An offender in this category must serve a minimum of 90 days in jail.

To avoid a setback for your business, it is strongly recommended that you get the license. You may also lose sight of your long-term plans through the consequences.

In case I do not meet the eligibility requirements, what do I do?

A person captured on the CSLB’s records who meets the requirements for a license may qualify for a license if they do not meet the California licensing requirements for contractors.

Using my California Contractors License in another state is possible?

Nevada, Utah, and Arizona have reciprocal contractor license agreements with California. When working in any of these states with a CSLB license, you will have a better chance of landing the job than if you were working in another state. While some of the requirements in the license examination are removed, you still may not be eligible to work with those state’s licenses.

Due to this advantage, the bidding process will be sped up as you get the chance to complete it ahead of your competitors. The requirements for some examinations may also be waived. There are some classifications of California contractor licenses where reciprocity agreements do not apply. Several, similar classifications are eligible for this award. Landscape license codes A-21 and C-27 from Arizona, respectively, will be accepted as equals. The contract will not be authorized if it does not follow the accepted code.

Contact CA Contractor State License Board for most updated information.

https://www.cslb.ca.gov/

Business Liability Insurance in a Nutshell

Business liability insurance, or general liability (CGL) in insurance terms, protects you from various types of claims arising from the operation of your business, such as bodily injury, property damage, personal injury, among others. A quote for general liability insurance typically includes:

Bodily injury liability & property damage liability
Personal & advertising injury liability
Products & completed operations liability
Damages to property rented to you
Medical payments

OSHA will monitor the whistleblower cases under Antitrust and Money laundering Act: DoL

(Washington, DC, Economic & Insurance News by Insurance Market 360) –  Department of Labour (DoL), recently notified that, OSHA, shall investigate whistleblower complaints logged under the new Antitrust and Money Laundering provided by the legislation. This decision was taken keeping in view of increase in cases especially in professional safety and health administration in the recent days.

OSHA will probe into all concerns related to the direct and indirect actions of superiors or government exhibiting cause and related actions or support such incidents which are covered under the above two laws.

DoL will administer the registered cases under Wendell H Ford aviation investment and reforms act of twenty first century until OSHA is ready with its provisional final protocols related to both the acts.

DoL prime focus is to safeguard the rights of employees and to protect them from being harassed by supervisors; so as that transparency and credibility are developed leading to good governance in the work places.

The prime objective of the whistle blower retaliation program is to ensure that complainant is legally protected from 20 domains related to workplace safety and health, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health insurance reform, motor vehicle safety, nuclear, pipeline, public transportation agency, railroad, maritime, securities, tax, antitrust, anti-money laundering laws, and for engaging in other related protected activities.

More commentary can be obtained from, www.whistleblowers.gov.

Source: www.dol.gov

Reference: https://www.dol.gov/newsroom/releases/osha/osha20210219

https://www.insurancemarket360.com/insurance-news/osha-will-monitor-the-whistleblower-cases-under-antitrust-and-money-laundering-act-dol

 

Research reveals 22% growth in Global commercial segment of Q4, 2020 FY

(Economic & Insurance News by Insurance Market 360) - Investigation done in commercial insurance sector across various regions and the globe in both private and public domains for the fourth quarter of 2020 with the support of Marsh, the lion share holder, indicate an aggregate of 22% increase which is 3% more than Q3, 2020.Global market insurance index was initiated in 2012 to study the trends across countries and continents which is a good resource and reference for various stake holders in insurance sector.

The major emphasis was laid on property insurance pricing, finance and professional lines, causality and composite ranking across regions and the nations. Analysis reported a sharp hike in finance and professional domains from 40% in Q3 to 47% in Q4.Property pricing decreased by 1%, whereas composite pricing has been increasing consistently for the last 9 years.

Though the overall increase is found in the fourth quarter, there is no significant change witnessed in certain regions other than UK and Pacific. Property insurance and Directors and officers reported moderate results. Region wise outputs reported Continental Europe, Asia, and LAC had moderate levels of price increases for three quarters of the financial year 2020.

Reports at national level reveal that Latin America, Pacific and US exhibited a positive growth of 9%, 35% and 44% respectively in Q4.Public sector Company D & O on an average reported medium results they had very good progress in US & Australia and exhibited an increase in the range of 25% to 50% in other countries of the world.

Source: www.marsh.com

Reference: https://www.marsh.com/us/insights/research/global-insurance-market-index-q4-2020.html

https://www.insurancemarket360.com/insurance-news/research-reveals-22-growth-in-global-commercial-segment-of-q4-2020-fy

VERMONT is now a licensing authority to state based systems: NAIC

(Washington, Economic & Insurance News by Insurance Market 360) – National Association of Insurance Commissioners, NAIC, on 29 January 2021 announced the inclusion of Vermont department of financial regulation to licence state based systems, SBS a 33rd in its latest count.

Michael Pieciak, Vermont Department of Financial Regulation Commissioner, expressed that, “SBS provides us with the opportunity to streamline our processes and improve our services and I am pleased to have licensed SBS and look forward to completing the implementation process.” He added that, “this is an exciting opportunity in our SBS implementation that we expect will result in across the board improvements to the services we provide our consumers, licensees and insurers.”

Electronic system will not help in rendering timely and quality services related to licences, complaints management, enforcement with fewer amounts of efforts and also to work on par with the national standards and protocols in Insurance sector.

Vermont as a licensing agency to SBS is expected to offer a variety of product services in the domains of facilitating licences to producers and companies, design and conduct capacity building programs and monitoring them, consumer related services, enforcement of the statutory norms, fraud reporting and support systems, exam tracking and revenue management.

For more details and list of the 32 licensed organizations and for other details you may look into the official portal of NAIC, www.naic.org

Source: www.naic.org

Reference: https://content.naic.org/article/news_release_vermont_becomes_33rd_naic_member_license_state_based_systems.htm

https://www.insurancemarket360.com/insurance-news/vermont-is-now-a-licensing-authority-to-state-based-systems-naic

Private Insurance organizations to face EPLI Challenges: RPS

(Rolling Meadows, IL, Economic & Insurance News by Insurance Market 360) - Covid_19 affected Employment Practices Liability Insurance (EPLI) pricing and it is expected to continue in 2021 according to a report by Risk Placement Services.

Manny Cho RPS EVP, Executive Lines, opined that, “in order to obtain and maintain profitability, carriers are not only looking for rate adequacy but also, limiting their exposure through reductions in capacity”.

California, Illinois (Chicago) and New York are experiencing a jump in prices due to Covid. Other industries like hotels, restaurants and travel are deeply affected with EPLI rates. Sensitive analysis is done on EPLI Underwriting especially on private insurers regarding the impact of Covid, financial health of the organization, health and safety of employees and stability of the company.

Cho added, “At the onset of COVID, underwriting questions were related to a business’s reopening plans and the safety protocols in place to ensure employee safety”. Further scrutiny is also done on the operations, expansion plans and recruitment policy of the company to gauze their business stability and risk management.

In December 2020, the U.S. Equal Employment Opportunity Commission (EEOC) released short document pertaining to vaccine administration, disability factors and religious beliefs to private insurers in addition to risk mitigation, work environment with safety measures.

It’s important for agents to help clients facilitate a decent insurance opportunity by deeply understanding the personal, professional and financial status of a client.

Insurers are exploring opportunities in financial services and technology in spite of all odds. Situations might have affected the underwriting procedures, but there is always scope to expand and explore.

Source: www. rpsins.com

Reference: https://www.rpsins.com/knowledge-center/items/epli-for-private-companies/

https://www.insurancemarket360.com/insurance-news/private-insurance-organizations-to-face-epli-challenges-rps