If you're experiencing losses on a project, your first step should be to deal with overhead, liquidity, problems, and ongoing business concern. It's also essential to communicate any problems to your insurance agent and surety company immediately! Because the surety has a strong financial interest in preventing you from default on your bond, it will leverage its relationship with the bond underwriter to help you work through these difficulties and reach a mutually acceptable solution that will keep you on the job.
However, a contractor withholding critical information about a problem situation from a surety would lead to a far different result. Concern about the contractor's deteriorating financial condition - which makes it a riskier bonding candidate - might make the surety restrict its future capacity, leading it to make the contractor either bid on only smaller projects that pose less risk to the underwriter or postpone bidding on all projects until the business can clean up its balance sheet.
If you have any questions about working with your surety, please feel free to get in touch with the Bond professionals at our agency.
However, this site won't provide informed guidance on buying the insurance you'll need for your new equipment. Here's where our agency comes in. Before you make a final decision, we can offer our professional opinion on how the purchase will affect your coverage and pricing options.
For example, if you're choosing between two pieces of equipment, we can estimate the cost for insuring each (a factor you might consider in making your choice). We can also let you know in advance that it might be hard -- or even impossible -- to provide the right coverage on a piece of equipment at a cost you can afford.
The higher the value of your planned purchase, the more we can help by getting involved in the decision-making process in advance. Feel free to get in touch with us.
As online and other methods make your business purchasing increasingly easy, don't let the simplicity of the process lead you to skip the steps needed to make a wise decision.
To be in business means to sign contracts - and every one of those contracts requires that you agree to provide some guarantee. A common question is "will my insurance back me up on those guarantees?"
The answer can be complicated. For one thing, it's essential to determine if the contract is one of the types that your Liability coverage specifies as an "insured contract." Although other policy provisions can also apply (such as exclusions and limitations), if a particular contract isn't considered an "insured contract," look no further - your policy won't apply.
Standard Commercial Liability policies usually define "insured contracts" to include:
Almost all Liability policies also include a broader provision that covers contracts under which your businesses assume the "tort liability" of another party for bodily injury or property damage. "Tort liability" is defined as liability that would exist in the absence of a contract or agreement. In other words, the liability you're assuming must arise from the negligence of the other party to the contract. If the injured person can sue this other party without reference to any contract or agreement ("tort liability"), then a contract under which your business agrees to assume this liability will be considered "insured."
Although it's important, the definition of "insured contract" is only the starting point for determining if Liability coverage applies. Instead of assuming that your policy covers your contractual agreements, give one of our specialists a call. We can review the specific provisions of your current coverage as they might apply to your proposed contract and advise you about possible gaps.
For example, some businesses want coverage equal to what they have paid for the building. However, this ignores the value assigned to the location, which might have increased (or decreased, depending on the location) significantly. Others prefer using real estate appraisals; but this leads back to the sales price, not the construction price. Square footage and building material cost estimators are also common.
However, even if they are fairly accurate in methodology, they depend on the accuracy of the data put into the formulas (garbage in -- garbage out). Add the effect of changing zoning or building ordinances, and it's no wonder that insurance industry experts estimated that the average commercial building might be underinsured by as much as 40%.
As a construction professional, you're well placed to know the cost of restoring or rebuilding after a loss. What others "guesstimate," you must do accurately for a living. Ordinances and zoning laws that are Greek to most people form part of your everyday knowledge base.
We can review the valuations of your buildings and recommend any necessary changes to your coverage. From that point, let's explore opportunities to improve the accuracy of building valuations for your clients and ours. Perhaps together we can make inroads into that 40% gap.