P.O. Box 1750, Cockysville, MD, 21030
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A Primer On Contractor Bonds

Bookmark and Share Installing ducts and showers in homes around the area, building additions to people's homes, putting new toilets in, you're probably not going to need a contractor's bond. But, when you get those big-time jobs, the ones that make or break the business this year, when you start taking on new hires because you don't have the manpower, when you're doing swimming pools and whole new buildings, you're gonna have to get bonded.

The Miller Act dictates that on any job budgeted at over $100,000, you're going to have to supply a contractor's bond. Now, this might not be your responsibility. If you're sub-contracting for somebody else, you can let the head honcho who brought you onto the job worry about it. Otherwise, you need to get bonding in order to ensure that the job can be completed in a professional manner.

All of this being said, many clients may require bonded contractors on the job as a matter of preference. Getting bonded can make it easier to attain work for your firm even if you tend to focus on smaller and medium sized projects rather than six-figure constructions and installation.

Contract bonds are bonds that allow you to work on a particular job. Contract license bonds allow you to work in a certain area. You'll need to check your local regulations to determine what you need in order to take a contract in addition to a contract bond. A bond differs from an insurance policy in that the firm signing the bond over to you is not covering the losses, damages or legal fees, rather, they are lending you the money to do so should something go wrong. You are expected to pay the surety back for any costs. It's a line of credit rather than a form of insurance. Your insurance may wind up helping you to cover those costs, but any claims you make on your bond will eventually come out of your own pocket.

So what's it going to cost you to get bonded? It's really hard to guess. There are quite a few factors that weigh into the quote you're going to get from a licensed surety bond provider. The good news is that the cost of getting bonded tends to correlate with the cost of the job. Making sure that your budget covers your own costs as well as the cost of getting bonded can help to ensure that you're not scraping together your pennies to cover your end.
 

Understanding Mold Hazards and How to Prevent

Bookmark and Share The bad news: Exposure to indoor mold can trigger serious allergic reactions and even infections among workers and visitors to your building, leading to lost productivity – not to mention the costs and hassles of litigation.

The good news: Taking precautions against this risk can help prevent health problems, limiting your exposure.

The potential for indoor exposure to mold has increased in recent years because of the way we live. To conserve energy, buildings are being built more tightly -- and the tighter the structure, the greater the exposure to indoor mold. Using synthetic building materials literally seals buildings and reduces air movement, creating a higher moisture content that nurtures mold growth.

Poorly designed or maintained heating, ventilation, and air-conditioning systems contribute to indoor mold exposure; Air filters and air filtration devices provide a comfortable habitat for mold, especially in high humidity conditions. HVAC systems can re-circulate air that contains mold spores and toxins if there are no effective filter systems to trap them. Failure to maintain and clean systems leads to unchecked mold growth and circulation indoors. Humidity worsens the problem; mold thrives in humid conditions.

Human factors contribute to mold exposure, including the fact that we spend so much time indoors, and many of us have compromised immune systems from diseases and medications. What’s more, new and harmful mold organisms are circulating constantly.

Although there’s no practical way to eliminate all indoor molds and mold spores, to stop indoor mold growth and reduce the presence of mold in the workplace, we’d recommend taking these steps:
  1. Clean small-scale molds ASAP, using a 10% solution of chlorine bleach; always wear the proper Personal Protection Equipment (which includes gloves, eye protection, and a mask to protect against airborne spores) and dry surfaces completely after cleaning.
  2. Fix leaks quickly; moisture from leaks provides an ideal environment for mold growth.
  3. Seal surfaces with a substance such as paint to which fungicide has been added.
Large-scale mold problems require the use of professional cleaning services that employ such treatments as oxidizers, fungicides, bactericides, and shielding compounds, which seal the antimicrobial agents within the treated surface.

Our risk management specialists would be happy to help you deal with mold problems in your workplace. Just give us a call.
 

Builder's Risk Insurance: Who Buys?

Bookmark and Share When the project is finished, it belongs to the client, it belongs to whoever owns the land. In the meantime, there's a lot of shared risk. If a hurricane blows the whole jobsite into the sea, the client is out whatever you've spent on construction materials, but the builder could be out of a job if there's no builder's risk policy in place to recover the losses.

The builder does the work, the client finances the project, and until it's finished, you're in this together, sharing the risks associated with building something. Their project and your job are both on the line.

So who buys the builder's risk insurance?

Many contractors insist on the client making the purchase. It's the client that collects the payout on the claim, it's the client who will own the finished property, and all the material on the site has been purchased with funds allocated by the client. This is the simplest, easiest solution. Anyways, if the builder is expected to buy the policy, then they're probably going to weigh that into the budgeting process, essentially requiring the client to foot the bill either way.

On the other hand, buying the policy yourself, as a builder, can help to protect you against certain circumstance. Suppose, for instance, that disaster strikes, and it kills the client's enthusiasm for the project. They recoup their losses, and leave you out of a job. Furthermore, a builder may simply be more familiar with the ins and outs of insuring a construction project. If you're working with someone who is new to the process or someone who just wants a home built and isn't interested in becoming a real estate mogul, then it may make more sense to handle all the red tape for them. You're generally going to have to provide proof of builder's risk coverage on most major projects, and if you already know how to do that, it's a lot easier than telling someone where to go to get these papers stamped, who to call for a fair price on the policy, how much coverage to buy and so on.

Ultimately it depends on the project. If the client is trustworthy and experienced in these matters, then you may want to let them handle it. Otherwise, you can streamline the process and get to work much quicker by buying the policy yourself rather than walking an inexperienced client through it.
 

Are Automatic Drug and Alcohol Tests a Good Idea?

Bookmark and Share Imagine two accident scenarios. In the first, a construction worker falls off a ladder from 12 feet up and breaks his ankle. His employer has a policy requiring drug and alcohol testing for all workers who suffer work-related injuries that are likely to result in Workers Compensation claims. Can the employer legally do that? If it can, is it a good idea?

In the second, the construction worker is on the ground near the ladder. Someone asks him a question and he turns around to answer. At that exact moment, a worker 12 feet up on the ladder is stung by a bee and drops a component of the air conditioning unit he was installing. The component strikes the worker on the ground, fracturing his shoulder. His employer has the same policy about automatic testing after a workplace injury. Again, is this legal? Is it a good idea?

Employers have good reason to be concerned about the effects of drug and alcohol use in the workplace. A 2002-2003 workplace study showed that, in the prior 12 months, 7% of U.S. workers had consumed alcohol during the workday, 1.7% had worked while under the influence of alcohol, 9% had suffered from hangovers while at work, and 3% used illicit drugs on the job. To combat this, many employers have drug- and alcohol-free workplace policies that they enforce through testing workers for these substances.

However, automatically testing all workers following work-related accidents might not be wise. In fact, it could end up hurting the employer. First, automatic testing might be illegal in the employer’s state. A West Virginia court in 2002 found that Walmart violated the privacy rights of an employee when it required him to take drug and alcohol tests after he injured his back on the job.

The jury relied on earlier court decisions holding that employers violated the state’s constitution by requiring testing without having a reasonable suspicion that the employee was using.

A 2001 decision from an Ohio court went even further. It struck down a state law that permitted employers to deny Workers Compensation benefits to employees who refused to submit to post-injury drug and alcohol tests. The court ruled that requiring testing of employees for whom the employers had no reason to suspect substance abuse amounted to a search of the employees. This search, the court said, violated the U.S. Constitution’s prohibition against unreasonable searches and a similar provision in the Ohio constitution.

Even where state law permits automatic testing, it might harm employee morale. Otherwise loyal and productive employees might feel offended if an employer demands that they submit to testing after they’ve been injured on the job. In the long run, this might hurt the employer’s ability to retain employees and recruit new ones.

It might also invite disability discrimination claims. When the employer does not routinely test all employees but tests only those who suffer workplace injuries, the injured employees might view this as discrimination against them due to their disabilities. They might seek redress under the Americans with Disabilities Act and pursue monetary damages from the employer.

As was the case with the West Virginia and Ohio decisions, automatic testing might invite invasion of privacy claims. At the least, this will subject the employer to long, expensive, and distracting litigation. Employers should take sensible steps to ensure that their workplaces are safe.

While post-injury drug and alcohol testing might make sense in many cases, it is not always appropriate or desirable. Employers should consult with human resources professionals to establish sensible testing policies, and seek the advice of our professional insurance agents to verify that you have the necessary insurance coverage in the event of a discrimination or privacy violation claim.