Understanding the Importance of Subcontractor Warranty Endorsement in General Liability Policies

Author, Lauren Stumpf, Marketing & Media Communications Specialist, Rancho Mesa Insurance Services, Inc.

In a recent podcast episode, Daniel Frazee, Executive Vice President at Rancho Mesa, sat down with fellow Agency Principal Sam Clayton to explore a crucial topic in the realm of general liability insurance policies, the subcontractor warranty endorsement. This endorsement outlines essential requirements that contractors should pay close attention to when working with subcontractors.

The subcontractor warranty endorsement in a commercial general liability policy establishes the minimum conditions that the contractor must have in place with the subcontractors they hire. Sam highlights three key requirements including the necessity for a written contract with an indemnity agreement in favor of the contractor, being named as additional insured for both ongoing and completed operations through endorsement, and ensuring that subcontractors maintain insurance coverage with limits equal to or exceeding the contractor's commercial liability policy (typically $2 million in aggregate and $1 million per occurrence).

Failure to meet these requirements can have significant consequences. Different insurance carriers may react differently, but common outcomes include higher deductibles, potentially reaching $25,000, compared to the usual $2,500 or $5,000 deductible, and, in some instances, a complete denial of coverage.

Given these potential repercussions, Sam advises contractors to carefully read and understand the subcontractor warranty endorsement in their general liability policy. Additionally, they should take proactive steps to protect themselves such as legal reviews of subcontract agreements, insurance consultations with brokers to determine adequate coverage, and implementing robust documentation and monitoring systems for certificates of insurance.

The subcontractor warranty endorsement is a vital component of general liability insurance policies for contractors. Understanding its requirements and taking the necessary steps to comply with them can help contractors avoid potentially costly consequences in the event of a claim caused by one of their subcontractors. To learn more, please listen to Episode 345 below, or on your favorite listening platform.

Unraveling Residential Exclusions: Navigating General Liability in Construction

Author, Lauren Stumpf, Marketing & Media Communications Specialist, Rancho Mesa Insurance Services, Inc.

In Episode 339 of Rancho Mesa’s StudioOne™ podcast, Vice President of the Construction Group Sam Clayton interviews Executive Vice President Daniel Frazee as they discuss the importance of Residential Exclusions in General Liability (GL) Policies for companies in the construction industry.

Sam and Daniel highlight how these exclusions impact coverage for various types of residential work within the construction industry, such as single-family homes, apartments, and more. Daniel emphasizes the need for construction firms to be specific about the type and location of their residential work, as different carriers have varying interpretations of residential exclusions. He also touches on Wrap/OCIP policies, which can provide broader coverage for subcontractors working on residential projects.

The episode highlights the significance of understanding existing residential exclusions for Rancho Mesa construction clients and suggests considering a policy audit to ensure proper coverage.

Overall, the podcast provides valuable insights into navigating residential exclusions and their implications for construction businesses, urging listeners to proactively manage their insurance coverage.

Episode 339 can be listened to below, or on your favorite listening platform. If you would like more information, please contact Daniel Frazee at dfrazee@ranchomesa.com, or Sam Clayton at sclayton@ranchomesa.com.

A Deeper Dive Into Professional Liability

Author, Lauren Stumpf, Marketing & Media Communications Specialist, Rancho Mesa Insurance Services, Inc.

In Episode 319 of Rancho Mesa’s StudioOne™ podcast, Vice President of the Construction Group Sam Clayton interviews Executive Vice President Daniel Frazee as they continue their conversation on general liability policies and move deeper into a key exclusion that is often seen as they negotiate terms and conditions on behalf of their clients and prospective clients.

During the episode, Frazee explains what professional liability is and why it is excluded on general liability policies. He gives a summary of what types of contractors typically have professional liability exposure and reasons for why they may have it. Frazee also describes specific options contractors can look at when it comes to securing stand-alone policies.

Episode 319 can be listened to below, or on your favorite listening platform. If you would like more information, please contact Daniel Frazee at dfrazee@ranchomesa.com, or Sam Clayton at sclayton@ranchomesa.com.

A Brief Discussion on Pollution Liability

Author, Lauren Stumpf, Marketing & Media Communications Specialist, Rancho Mesa Insurance Services, Inc.

In Episode 315 of Rancho Mesa’s StudioOne™ podcast, Executive Vice President Daniel Frazee and Vice President of the Construction Group Sam Clayton discuss pollution liability, and why virtually all general liability policies exclude this coverage.

Frazee and Clayton talk about general liability policies and delve deeper into some key exclusions they often see as they negotiate terms and conditions with underwriters.

Clayton also explains the specific options contractors can look at when it comes to securing stand-alone policies.

Please listen to the full episode below, or on your favorite listening platform. If you would like more information, please contact Daniel Frazee at dfrazee@ranchomesa.com, or Sam Clayton at sclayton@ranchomesa.com.

Understanding General Liability Forms and Endorsements

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

Two agency leaders within Rancho Mesa Insurance Services, Inc. made a special appearance in a recent episode of the StudioOne™ Safety & Risk Management Podcast. During episode 293, Executive Vice President Daniel Frazee and Vice President of the Construction Group Sam Clayton discussed the important forms and endorsements in general liability policies.

Sam and Daniel highlighted 3 key terms they commonly see within the construction insurance space. Sam started out with explaining residential work, and how it is defined within the scope of general liability underwriting.

Next he explained subcontractor’s warranty endorsement, a term that is recognized by insurance professionals, but may confuse trade and general contractors. Sam dives into the term, explaining the importance of knowing how the warranty on one’s policy actually reads.

Lastly, Sam explains what minimum and earned premium is and how contractors’ can use it to their advantage when negotiating terms through their broker.

The pair wrapped up their conversation educating listeners on first steps contractors can take to learn more about the policies they currently have in place.

Daniel and Sam’s episode, Ep. 293 General Liability Forms and Endorsements, can be listened to below, or via your favorite podcast listening platform.

Employers Adapt to New Pay Transparency Requirements

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

Pay transparency is becoming more common for companies, especially as laws are being passed making variations of it a requirement. Pay transparency is the idea that employers should be open, or transparent, about what they pay their employees, and how they decide on compensation for specific roles.

More employees are wanting clarity about their own pay and how it compares to their peers. According to HR and recruiting experts, employees may leave or give less effort at work if they feel they’re not being paid fairly.

Job recruiters are also finding that people searching for job opportunities want to see pay ranges on job postings, and some will not apply if that information is not available.

As of January 1, 2023, California employers with 15 or more employees must include base pay ranges in job postings and ads. Colorado, Washington, and soon to be New York, are among other states to pass similar laws.

Employers should be aware that employees already have a legal right to discuss their pay. Under federal law, employers may not keep their non-supervisory employees from discussing their wages with each other. In addition to rights under federal law, many employees and including supervisors have protections under state laws that allow them to freely discuss their wages. It is recommended that employers eliminate any policy telling employees that discussion of wages is discouraged or prohibited, or that wages are confidential.

Utilizing Rancho Mesa’s RM365 HRAdvantage™ Smart Employee Handbook Builder is a great way to ensure that your company policies are compliant.

Being open with salary expectation up front can save companies time and money on recruiting. Hiring managers can waste a lot of time on interviews if they wait until after they have conducted multiple interviews to finally reveal the salary, only to learn that it does not meet the expectations of the candidate.

Job postings that include pay transparency are shown to have significantly more applicants than those that do not. In the tight labor market that we are currently facing, especially in the construction industries, employers should be willing to try anything that will set them above the rest.

For additional resources on pay transparency, our clients can visit the RM365 HRAdvantage™ portal.

Employers Prepare to Submit OSHA Form 300A

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

The time is here for you to submit your company’s OSHA 300A Form. The OSHA 300A Form is a company’s summary of work-related injuries and illnesses within a given year. Employers must electronically submit their 2022 OSHA Form 300A data to Federal OSHA by March 2, 2023.

Along with electronically submitting the data, the form must also be posted in the workplace, in a place visible to employees from February 1st to April 30th. To ensure employee confidentiality, the Form 300A does not include personal information such as employee names.

According to OSHA, establishments with 20 to 249 employees in designated industries are required to submit the 300A data. Establishments with 250 or more employees that are required to keep OSHA injury and illness records must also submit the data.

Companies under Federal OSHA jurisdiction can use the ITA Coverage Application to determine if they are required to electronically report their injury and illness information to OSHA. Establishments under State Plan jurisdiction should contact their State Plan. 

There are three options for injury and illness data submissions. You can manually enter your data, upload a CSV file to add multiple establishments at the same time, or transmit data electronically via an API (application programming interface).

OSHA’s Injury Tracking Application (ITA) is using a new login format for submitting the Form 300A data. Those who have used the old login in previous years will need to make a new Login.gov account using their same email address in order to access the application for the 2023 collection of Calendar Year 2022 Form 300A data.

For additional information and detailed instructions on creating a new account, please visit OSHA’s Injury and Reporting webpage.

If Rancho Mesa clients have entered their 2022 incidents in the Risk Management Center, they will be able to generate their 300A Summary along with the .CSV file to upload to the Federal OSHA’s Injury Tracking Application website. Please refer to our video for instructions on how to do this.

Cal/OSHA Adopts New Non-Emergency COVID-19 Regulations

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

On Thursday, December 15, 2022 the California Occupational Safety & Health Standards Board (Cal/OSHA) voted on newly proposed COVID-19 regulations during a public forum meeting. With a 6 to 1 vote, the Non-Emergency COVID-19 Prevention Regulations were passed and adopted. The regulations will take effect once they are approved by the Office of Administrative Law in January 2023. They remain in effect for 2 years thereafter. However, the recordkeeping subsections will remain in effect for 3 years.

Previously, the proposed standards had the word “permanent” in the title despite it having the two and three year expiration dates. Cal/OSHA is now referring to the regulations as the “COVID-19 Prevention Non-Emergency Regulations.”

These new regulations include some of the same requirements found in the current COVID-19 Prevention Emergency Temporary Standards (ETS), but there are some new provisions.

First, let’s begin with pointing out some key requirements that are staying the same.

• With the new regulations employers will still need to make COVID-19 testing available at no cost to the employee and during paid time to employees after a close contact.

• Employers will still need to provide their employees with face coverings and respirators upon request.

• Employers must still report information about employee deaths, serious injuries, and serious occupational illnesses to Cal/OSHA.

Some key difference between the current ETS and the new regulations include:

• Employers are no longer required to maintain a standalone COVID-19 Prevention Plan, as long as COVID-19 requirements are addressed within a section of their Injury and Illness Prevention Program (IIPP).

• Employers must now report major outbreaks to Cal/OSHA.

• Exclusion pay for employees has been removed from the new regulations. This means employers will no longer be required to pay employees while they are excluded from work due to COVID-19. Instead the employer would only need to provide employees with information on the benefits they would be entitled to under state, federal, and local laws.

• There are also some definition changes to what is considered “close contact” and “exposed group.” “Close contact” is now defined by looking at the size of the workplace in which the exposure took place. For indoor airspaces of 400,000 or fewer cubic feet, “close contact” is now defined as sharing the same indoor airspace with a COVID-19 case for a cumulative total of 15 minutes or more over a 24-hour period during the COVID-19 case’s infectious period. For indoor airspaces of greater than 400,000 cubic feet, “close contact” is defined as being within six feet of a COVID-19 case for a cumulative total of 15 minutes or more over a 24-hour period during the COVID-19 case’s infectious period. The term “exposed group” was clarified to include employer-provided transportation and employees residing within employer-provided housing that are covered by the COVID-19 Prevention standards.

Information provided by Cal/OSHA. For a full and detailed list of regulations please refer to Cal/OSHA’s Title 8 Proposed State Standard.

In order to be best prepared for these changes, it is recommended employers review the California Department of Public Health (CDHP) and Cal/OSHA guidance on requirements for things such as the use of face masks. Employers must also develop, implement, and maintain effective methods to prevent COVID-19 transmission by improving ventilation. It’s important to review CDPH and Cal/OSHA Interim Guidance for Ventilation, Filtration, and Air Quality in Indoor Environments.

Cal/OSHA Proposes Permanent COVID-19 Standards

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

With the COVID-19 Emergency Temporary Standards (ETS) scheduled to expire at the end of the year, Cal/OSHA has proposed new permanent standards.

The proposed permanent COVID-19 standards will be voted on during the December 15, 2022 Occupational Safety and Health Standards Board meeting. If passed, despite the word “permanent” being in the title, the standard will be in effect for the following two years. However, the record keeping requirements of the standard will apply for the following three years. So, with an effective date of January 1, 2023, the COVID-19 requirements can be expected to lift on January 1, 2025 and the recordkeeping requirements expected to lift on January 1, 2026.

Some proposed changes within the permanent COVID-19 standards include:

• Employer Notice Requirements - The proposed permanent standards edits what information employers need to include in exposure notices to employees and the acceptable ways in which employers must distribute those notices.

• Definition Changes - There are definition changes to what is considered a “close contact,” an “exposed group,” an “infectious period,” an “outbreak,” a “returned case,” and more.

• Removal of the Exclusion Pay Policy - Under the current ETS, employers have to provide exclusion pay before requiring employees to exhaust other forms of potential paid leave. With the new proposed standards this is eliminated and employers would only need to provide their employees with information about local and federal COVID-19 benefits.

• Reporting and Recordkeeping Requirements - Employers will no longer need to keep a record of close contacts and will no longer have to report information about workplace cases and outbreaks to their local health department. However, in a major outbreak setting, employers must report the outbreak to Cal/OSHA. That being said, employers still need to be aware of their local health department’s requirements.

For a detailed look at the proposed changes please refer to Cal/OSHA’s formal proposal document.

While there appears to be few differences between the current temporary standards and the new proposed permanent standards, it is recommended for businesses to locate and review their COVID-19 Prevention Program to ensure it can be readily updated. The new proposed permanent standards removes the requirement for employers to keep a separate COVID-19 Prevention Program, as long as their Injury and Illness Prevention Program (IIPP), includes COVID-19 policies. So even if you decide to only have an IIPP, it will still need to be updated with the latest COVID-19 procedures. Rancho Mesa has a COVID-19 Prevention Program template, that can be downloaded here.

Rancho Mesa will update its clients and readers with the status of the final rule once Cal/OSHA votes on December 15, 2022.

OSHA Proposes to Expand Electronic Form Submission Requirements

Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

The Occupational Safety and Health Administration (OSHA) recently released a proposed rule that would increase electronic reporting requirements for businesses summiting OSHA logs.

Currently, establishments with 250 or more employees, regardless of classification, and establishments with 20-249 employees, classified in certain high hazard industries, must electronically submit their Form 300A Summary to OSHA, annually.

The proposed rule changes would declare that only those in the classified high-hazard industries with 100 or more employees will be required to submit their Form 300A Summary electronically to OSHA. It would also require that Forms 300 and 301 be submitted electronically by these companies, when previously these two forms were to be kept confidential and only available to OSHA upon request.

Classified high hazard establishments with 20-99 employees would still only be required to submit the 300A Summary electronically to OSHA and would not need to electronically submit the 300 and 301 forms.

Under the proposed rule, OSHA would update the industries that are classified as high hazard and need to submit the data electronically.

OSHA has also proposed that company names be included on the electronic submissions. This, along with the injury and employee information that is included on the 300 and 301 forms, raises privacy concerns because this information would be available for public view via the Freedom of Information Act (FOIA).

The comment period for the public to voice their concerns ends on May 31, 2022. Information on how to submit comments on the proposed rule can be on the Federal Register.

Understanding the DART and TCIR Calculations

Author, Lauren Stumpf, Media Communications and Client Services Specialist, Rancho Mesa Insurance Services, Inc.

When a project owner asks you to provide the company’s DART or TCIR rate, it may seem a little overwhelming at first. But, the two numbers are really a score that can be used to compare contractors’ safety history. These numbers can be important during the bidding process when comparing multiple bids and could be a determining factor for who is awarded the contract.

DART stands for days away, restricted, or transferred. A DART rate is used to track any OSHA recordable workplace injury or illness that result in days away from work, restricted duty, or transfer of duties.

On the other hand, the TCIR is the total case incident rate (also known as the Total Recordable Incident Rate or sometimes referred to as the OSHA Incident Rate). It measures a company's past safety performance based on their incident rate. A TCIR is found by looking at the number of work-related injuries per 100 full-time workers during a one-year period.

The TCIR will likely be higher than the DART because it includes all incidents, not just the ones that results in lost time.

Project owners are increasingly requesting these numbers along with the project bid. Not only do they want to see how much it’s going to cost them to build the project, but they want to know how safe their contractor is on the jobsite. These numbers show that.

OSHA also uses these calculations to monitor high-risk industries.

Rancho Mesa’s Risk Management Center features a tool that helps contractors generate their DARTs and TCIRs. Contractors can use the Incident Track application to enter and track an incident’s details. Once that incident has been saved, the system will allow them to generate OSHA logs based on that data and generate the DART and TCIR.

“It’s an easy-to-use tool that ensures the numbers are accurate and available whenever they’re needed,” said Alyssa Burley, Media Communications and Client Services Manager with Rancho Mesa Insurance Services, Inc.

To learn more about the Risk Management Center’s capabilities, sign up for an upcoming webinar at www.ranchomesa.com/workshops-and-webinars.

Cal/OSHA 300A Form Posting Begins February 1st

Originally published January 22, 2019.

Author, Lauren Stumpf, Media Communications Assistant, Rancho Mesa Insurance Services, Inc.

Rancho Mesa Insurance Services, Inc. would like to remind its clients that February 1, 2021 marks the start of the Cal/OSHA Form 300A posting period. The Cal/OSHA Form 300A is a summary of the company's annual work-related injuries and illnesses. It must be posted from February 1, 2021 to April 30, 2021.

The 300A Form must be posted in a conspicuous place at each workplace, where notices to employees are usually displayed. Make sure that the posted annual summary is not altered, defaced, or covered by other material. Employers must send a copy of the summary to employees who do not report to the workplace on a regular weekly basis.

Companies with no recordable injuries or illnesses in 2020 must post the Cal/OSHA Form 300A with zeros on the “total” lines.

According to Cal/OSHA, “If your company had more than ten (10) employees at any time during the last calendar year, you must keep Cal/OSHA injury and illness records unless your establishment is classified as a partially exempt industry under Section 14300.2.”

Through Rancho Mesa's Risk Management Center, clients can generate the Cal/OSHA Form 300A using the incident tracking feature, within the system. The form may also be printed and manually completed.

Click here for the fillable Cal/OSHA 300A Form provided by CA.gov. 

Visit the California Recordkeeping Standard page for more information.

Topics Your COVID-19 Training Should Cover

Author, Lauren Stumpf, Media Communications Coordinator, Rancho Mesa Insurance Services, Inc.

As states begin to lift COVID-19 restrictions and move into later phases of reopening plans, and companies begin to bring back their employees, it is important to take the necessary health and safety precautions in the workplace. Your staff should be well informed about safety precautions and resources to keep one another safe. When choosing a COVID-19 employee training, make sure it is comprehensive and includes all the necessary topics recommended by local, state and federal agencies.

The Risk Management Center offers a 10-15 minute training designed to ensure compliance with COVID-19 safety guidelines. This general awareness course on COVID-19 covers tips on how to reduce the risk of contracting the virus by using best practices. In addition, the course covers COVID-19 characteristics and related health and safety concerns.

The COVID-19 General Awareness Online Training topics include:

• COVID-19 Characteristics

• CDC-Recommended Basic Precautions

  • Tips for Limiting Exposure

  • Proper Hand Washing

  • Social Distancing

  • Personal Protective Equipment (PPE)

  • Cross Contamination

• Employer Responsibilities

  • Employee Temperature Checks

  • Face Masks

• Importance of proper disinfecting and sanitation

  • Recommended Chemicals

  • What to Clean and Disinfect

• Working-from-Home Ergonomics

• Federal Assistance for COVID-19 Related Leave

  • Families First Coronavirus Response Act (FFCRA)

  • Paid Sick Leave

  • Family and Medical Leave Act (FMLA)

This online training is offered for free to Rancho Mesa clients. Contact the Client Services department at (619) 438-6869 to learn more about the COVID-19 General Awareness training.

For up-to-date COVID-19 information and HR resources please visit Rancho Mesa’s COVID-19 Information Page.

Employee Handbook Builder Adds Two New COVID Policies

Author, Lauren Stumpf, Media Communications Coordinator, Rancho Mesa Insurance Services, Inc.

If you are a Rancho Mesa client who has utilized the Living Handbook builder within the RM365 HRAdvantage™ portal, you may have noticed email notifications alerting you of the latest legislation policy changes. When a new government policy goes into effect or an existing policy needs to be revised, the HR portal will give you the option to update your handbook(s).

The RM365 HRAdvantage™ portal has recently added two new policies to its Living Handbook builder. Thesetemporary policies apply to private employers with fewer than 500 employees and are effective from April 1, 2020 through December 31, 2020. The policies are:

• Emergency Paid Sick Leave Policy (COVID-19)

• Expanded Family and Medical Leave Policy (COVID-19)

To ensure that your handbook stays up-to-date, login to the RM365 HRAdvantage™ portal and accept these policies. They  will then be automatically added to your handbook. If you are not receiving the automated notifications, check the “Subscribe to email alerts for this handbook” box on the ‘Handbook Settings’ screen.

If you are working with an outdated employee handbook and want to quickly build a new compliant Living Handbook, learn more by watching our Living Handbook tutorial.

OSHA Penalties Increase in 2020

Author, Lauren Stumpf, Media Communications Coordinator, Rancho Mesa Insurance Services, Inc.

On January 15, 2020 the Federal Register published the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2020. This final rule increases civil penalties the Department of Labor assesses including those issued by the Occupational Safety and Health Administration (OSHA) based on workplace inspections and potential violations of safety and health standards. The rule is effective January 15, 2020. Beginning January 16, 2020 OSHA civil penalties will increase.

The new 2020 maximum OSHA penalties are as follows:

• Serious violation: $13,494 (increased from $13,260)

• Other-than-Serious violation: $13,494 (increased from $13,260)

• Repeat violation: $134,937 (increased from $132,589)

• Willful violation: $134,937 (increased from $132,589)

• Each failure to correct the violation: $13,494 (increased from $13,260)

• Each posting requirement violation: $13,494 (increased from $13,260)

For more information about the OSHA Penalties, visit https://www.osha.gov/penalties.

OSHA Amends Electronic Submission Requirements to Exclude Forms 300 & 301

Author, Lauren Stumpf, Media Communications Assistant, Rancho Mesa Insurance Services, Inc.

OSHA published a final rule through the Federal Register on January 25, 2019 stating, “To protect worker privacy, the Occupational Safety and Health Administration (OSHA) is amending the recordkeeping regulation by rescinding the requirement for establishments with 250 or more employees to electronically submit information from OSHA Forms 300 and 301.”

All establishments with 250 or more employees, unless specifically exempted by section 14300.2 of title 8 of the California Code of Regulations, and establishments with 20 to 249 employees in the specific industries listed in Appendix H of Cal/OSHA's emergency regulations are still required to electronically submit the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses).

The requirement to keep and maintain OSHA Forms 300, 300A, and 301 for five years is not changed by this final rule. This final rule becomes effective on February 25, 2019.

The deadline to electrically submit the 2018 Form 300A is March 2, 2019.

Rancho Mesa has put together a 6-minute tutorial video on how to generate the electronic Form 300A data file from the Risk Management Center, that can be uploaded to the ITA website for reporting the data.

For questions about how to track the injury and illness data in the Risk Management Center, contact Alyssa Burley at (619) 438-6869.

Sources:
https://www.osha.gov/recordkeeping/
https://www.dir.ca.gov/dosh/calosha-updates/log300-reporting.html
https://www.federalregister.gov/documents/2019/01/25/2019-00101/tracking-of-workplace-injuries-and-illnesses