Distracted Driving Awareness Month: Prevent Fleet Accidents Through Training

Author, Megan Lockhart, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

April is Distracted Driving Awareness Month across the nation. The month is dedicated to preventing distractions while driving as well as spreading awareness of these dangers on the road.

The National Highway Traffic Safety Administration reports more than 3,500 people in the United States were killed due to distracted driving in 2021. The most common forms of distraction are phone use such as texting, scrolling apps, or phone calls. When it comes to fleet and construction vehicles, it's important to make sure your employees are driving safely.

One vital way to prevent accidents on the road is through driver training. The SafetyOne™ platform offers a library of online driver training topics to ensure your drivers are safe on the road.

• Driver Safety: The Basics

• Driving Safety

• Driving Defensively

• Distracted Driving

• Commercial Driver’s License (CDL) Defensive Driver Training

Additionally, clients can register for Rancho Mesa’s in-person Fleet Safety workshop on Friday, May 17, 2024 at the Mission Valley Library.

To learn more about the training offered in SafetyOne, contact your client technology coordinator.

Navigating Contractor Challenges in 2024: Insights from the Surety Association of San Diego

Author, Andy Roberts, Surety Account Executive, Rancho Mesa Insurance Services, Inc.

In a recent special StudioOne™ Podcast episode, I’m joined by my three fellow board members of the Surety Association of San Diego as we explore some of the biggest challenges facing contractors in 2024 and beyond.

Challenges Ahead

As we look ahead, contractors are bracing for significant hurdles, including:

• Inflation and Material Costs

• Supply Chain Disruptions

• Labor Shortages

• Bonding Capacity Constraints

All of these issues can have a direct effect on a contractor’s bonding capacity, making it important that they get the most out of their surety relationship.

Maximizing Your Bond Program

To navigate these challenges effectively, contractors can take proactive steps to maximize their bond program:

• Work with Experienced Surety Agents

• Financial Preparation and Accounting Processes

• Transparency about Financials and Backlog

• Regular Meetings with Underwriters

By taking a proactive approach to identifying and addressing current and potential future challenges, contractors can maximize their bond program and position themselves for success in 2024 and beyond. By working closely with experienced surety agents, optimizing financial management practices, and fostering open communication with underwriters, contractors can navigate the complexities of the construction industry with confidence.

Empower Your Crew: The Importance of Heat Illness Training and Preparedness

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

As the calendar turns to April and warmer weather into spring time, now is a great time to take a look at your current Heat Illness Prevention Plan (HIPP), as well as make sure all crew members are up to date on their heat illness training.

As the months get hotter, it is important to remember three things: water, rest and shade. It is crucial that crews have access to all three. Adequate water for all crew members, regular rest periods, and identified shade areas around the jobsite or a portable canopy are all considered best practices, and when temperatures heat up, are often a requirement.

With rising temperatures, we anticipate, as has been the case in the past, there will also be a rise in heat-related injuries within the landscape industry. Having an HIPP not only will keep you compliant with state regulations, but more importantly keep your employees safe.

There are certain criteria and templates that all HIPP need to follow. For example, they need to be written, they need to be available in English as well as any other languages that are used at the company. And finally, it needs to be available at the worksite. The HIPP should include:

• Procedures supplying and accessing water

• High heat procedures

• Emergency response

• Acclimatization methods and procedures.

It is also important that leaders including foreman keep a regular eye on the crew, looking for signs of heat stress. The signs could be as minor as rashes or cramping to as severe as fainting. Any signs of this with a crew member should be reported immediately.

Knowing the hotter months are coming, now is a great time to dive into your company’s HIPP, make any updates to it, and begin to stress the importance of heat illness prevention.

Rancho Mesa clients can train their employees on heat stress and heat illness prevention with both online courses in English and Spanish, and a variety of toolbox talks in the SafetyOne™ website and mobile app.  Clients can distribute their HIPP through the mobile app ensuring foreman and crews have access to the document along with any other related resources when they’re at the jobsite.

Every year, Rancho Mesa hosts Heat Illness Prevention workshops and webinars to assist in educating clients and their employees. A recorded version of the workshop can be accessed online.

Contact me at ggarcia@ranchomesa.com or (619) 438-6905 to discuss how to mitigate heat illness and other potential risks.

SafetyOne™ Updates Company News: New Recipient Role Added for Users

Author, Megan Lockhart, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Recently, SafetyOne™ released new updates to the Company News feature of the platform. These updates include a new company news recipient user and added email notifications for all users.

A new “Recipient” role is now available specifically for receiving company notifications. Users who are assigned to this role do not need access to the mobile app or website, so they won't need to set up a password, and will receive all company news alerts they are assigned via email.

If the user with a Recipient role is switched to a different role in the future, they will be sent an email to create their login information.

Administrators can assign recipient users to their designated projects and when they send out Company News to that project, recipient users will receive it as an email. All users assigned to that project with the mobile app will also get both a notification on their phone immediately and an email.

These new features contribute to the flexibility of SafetyOne and our effort to continually improve user experience.

For questions on how to use these new additions, clients can contact their client technology coordinator, or view our Frequently Asked Questions on the Rancho Mesa website.

California Enacts Strict Updates to Lead Exposure Regulations

Author, Megan Lockhart, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Recently, the Cal/OSHA Standards board approved stricter standards for occupational lead exposure in both the construction industry and general industry.

Effective January 1, 2025, the standards lowered the Permissible Exposure Limit (PEL) by 80% and the Action Limit (AL) by 93%, a vastly stringent policy compared to previous regulations.

The Permissible Exposure Limit is the legal limit that an employee can be exposed to a chemical substance or physical agent. The previous PEL for lead was 50 micrograms per cubic meter of air, and has now been reduced to 10 micrograms per cubic meter of air. 

The Action Limit is the maximum value that can be reached before an action is needed to correct the issue. The previous lead level AL was 30 micrograms per cubic meter of air and is now only 2 micrograms per cubic meter of air.

With these limits reduced, employers must make changes in order to comply, such as updating their written program, conducting further exposure monitoring, and providing medical surveillance.

• Employers must give workers exposure assessments to determine lead exposure in the blood. If employers do not perform these assessments, they are required to provide respiratory protection, protective work clothing and equipment, medical surveillance, training and posted warning signs.

• If employee exposure reaches the new Action Limit, companies are required to implement a medical surveillance program. This includes medical examinations and procedures at no cost to the employees.

• Employees who have been exposed to lead levels at or above the Action Level must be temporarily removed from work. These employees will have “medical removal protection benefits,” and will not lose earnings, seniority and other employment rights.

In addition to these requirements, exceeding Action Levels of exposure requires employers to provide employees respirators and protective work clothing and equipment, enact hygiene and housekeeping practices, offer lead exposure prevention training, and maintain monitoring and medical records of exposed employees for a minimum of 40 years.

To prepare for these new standards effective next year, clients should conduct new air monitoring tests and exposure assessments soon to ensure they are still compliant with the new exposure limits. If results exceed the new PEL and AL, they have until the end of the year to reduce exposure and remain in compliance. 

For more information regarding these changes, clients can visit the Cal/OSHA website.

Dual Wage Thresholds Set to Increase Again

Author, Matt Gorham, Account executive, Rancho Mesa Insurance Services, Inc.

In an effort to keep up with wage inflation, California’s Workers’ Compensation Insurance Rating Bureau (WCIRB) has recommended increases to all 16 construction dual wage thresholds, which, if approved, would impact policies beginning on September 1, 2024 and could drive up insurance premiums for those unaware.

Dual wage thresholds help carriers evaluate risk of employee injury by correlating average hourly wage with experience on the job. The general notion is that employees with more experience command higher wages and are less likely to get injured at work, while employees with less experience are paid a lower wage, are less familiar with safety and jobsite protocols, and therefore more likely to be injured at work. This difference in risk leads to a difference in cost for insurance premiums, with higher paid employees costing their employers comparatively less in premium.

Using the base rate of $31 or more per hour from one carrier, consider the example of a plumber: a plumber earning $30 per hour will cost their employer $9.31 per $100 of payroll, while a plumber earning $31 per hour will cost their employer $4.35 per $100 of payroll. That is roughly a 47% higher cost in premium per $100 for an employee earning 3% less per hour.

Since the last time the WCIRB suggested an increase to the dual wage thresholds in December 2021, inflation and labor shortages have continued to drive up wages in the construction industry. According to the St. Louis Fed, average hourly earnings in construction have increased from $33.60 to $37.53 – more than 11% in that time. While wages are going up, the experience of employees is not keeping pace, leaving insurance carriers exposed. To address this disparity, the proposed threshold increases from the WCIRB range from $1 for plumbing, automatic sprinkler, concrete work, and painting/waterproofing to $4 for sheet metal/HVAC work.

To get ahead of this proposed change, business owners should consider whether it is more beneficial to award employees with raises or to pay more in insurance premiums. With increased overhead costs likely coming either way and quality employees already in short supply, not only could strategic raises offer relative savings, they could strengthen the loyalty from your team.

While this proposed change still needs final approval by the insurance commissioner, it is expected to have a major impact on wages and potentially premiums within the construction industry.

To evaluate the impact of the proposed dual wage threshold increase on your business, contact me at (619) 486-6554 or mgorham@ranchomesa.com.

California Updates Required Employment Pamphlets

Author, Megan Lockhart, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Recently, the State of California has made several important updates to labor pamphlets that must be provided to employees. 

Employers must provide the updated “Time of Hire” pamphlet to new hires. Created by the California Department of Industrial Relations Division of Workers Compensation, the document defines workers’ compensation and explains how employees can file a claim and gain access to medical care.

Additionally, the Employment Development Department (EDD) updated its “For Your Benefit” pamphlet. Employers are required to provide this both at the employee’s time of hire and their dismissal.

The document outlines benefits provided to employees by the state in the event of their termination or when they take certain leaves of absence. It also informs employees on how to obtain unemployment insurance, the tax requirements for unemployment benefits, which employees are not eligible for unemployment benefits, and who is eligible for state disability insurance.

These pamphlet updates accompany the changes made to California Labor Code section 2810.5 in January 2024, which requires that employers provide employees with a written notice about their wages, such as pay rates, overtime rates, and designated paydays. This notice must also be given to employees when they are hired. If there is a change of information in the notice, they must also provide an updated version within seven days of a change or in the employee’s pay stub by the next pay period.   

With these recent changes now effective, its important for employers to evaluate the materials they provide their employees to ensure compliance. For more information about required employment information or other human resources questions, access Rancho Mesa’s RM365 HRAdvantage™ portal.

Avoid Audit Nightmares with Properly Classified Tree Care Industry Equipment and Vehicle Maintenance Operations

Author, Rory Anderson, Account Executive, Rancho Mesa Insurance Services, Inc.

Tree care companies use specialized vehicles and equipment to perform their work. These assets are vital to the success of the company. To maintain their effectiveness, the machines need routine maintenance and upkeep. Issues arise when they break down, so it’s important to repair them immediately to limit business interruptions such as decreased productivity and profitability. The maintenance of the machinery can be a full time job, and some tree care businesses are lucky enough to have an employee, or a team of employees, dedicated to shop maintenance. This type of work is a specialized skill and represents a key role within the organization. The intent of this article is to define how to properly classify these operations, so your company is prepared for any issues that may come up at the audit.

Workers’ Compensation

The Workers’ Compensation Insurance Rating Bureau (WCIRB) has created a specific class code for the maintenance of equipment and vehicles: 8227 Construction or Erection of Permanent Yards of Shops, which ONLY applies to the construction industry. In Appendix I, the WCIRB defines which industries are considered construction. Tree care, is not included on this list. Therefore, the WCIRB says, you must classify these operations in the governing class code, which is 0106 Tree Trimming, Repairing or Trimming. In fact, the WCIRB’s definition for 0106 Tree Pruning, Repairing or Trimming states that shop and yard storage operations are included: “TREE PRUNING, REPAIRING OR TRIMMING — N.O.C. — hand or mechanical power — including ground crews and shop, yard or storage operations.”

General Liability

Unlike workers’ compensation, in the tree care industry there is a general liability (GL) class code dedicated to the employees that are working on the maintenance of their own vehicles and equipment: 91590 Contractors Permanent Yards – Maintenance or Storage of Equipment or Material. It’s important to note that this class code does not consider maintenance or repairs on machinery or equipment other than those owned by the tree care company. The use of this code on your policy can be beneficial because the rate is usually cheaper than the tree care GL rate: 99777 Tree Pruning, Dusting, Spraying, Repairing, Trimming or Fumigating. So, it is safe to split payroll between these two class codes accordingly. Remember to keep proper records segregating the wages earned by your employees.

Overall, maintenance and repair employees are essential for maintaining the operational effectiveness, safety, and profitability of a tree care company. It is important to understand how to properly classify your equipment and vehicle maintenance operations so you can align your insurance policies correctly and avoid costly mistakes at the audit.

If you have questions or would like me to audit your current policies, please reach out to me at (619) 438-6437 or randerson@ranchomesa.com. I’m happy to help!

Getting to Know Our Trade Associations – Meet Andy Berg, Executive Director of NECA San Diego

Author, Anne Wright, Surety Relationship Executive, Rancho Mesa Insurance Services, Inc.

As we have shared with our clients and viewers in the past, Rancho Mesa finds a tremendous amount of value in memberships of various trade associations. Becoming involved in these associations by attending events, and participating in committees, ultimately at board level, has allowed for a deeper understanding of the construction industry that we bond. I have found value in following legislation changes that affects the industry, as well as learning about the issues and processes available for contractors to run safer jobs, be more competitive in the industry, and manage contracts and financial reporting. It has made me better at what I do as a surety agent.

Over the years, I’ve had the pleasure of developing a great relationship with Andy Berg, Executive Director of the National Electrical Contractors Association (NECA) San Diego. This past year, Rancho Mesa was honored to be the recipient of NECA’s Affiliate of the Year Award.

NECA represents the union electrical construction industry, locally and nationally, and is a strong voice for its members on matters on advocacy, education, training, and a vibrant labor force. Andy joined the staff of NECA San Diego in 2002 as the Director of Local Government Relations & Economic Development, and earned his position of Executive Director in 2007.

I had the pleasure of getting to know Andy many years ago when I was involved on the San Diego American Subcontractors Association (ASA) board. NECA was a member of ASA, and Andy joined us on the government relations committee, meeting with local public agency policy makers. I learned most of what I know about communicating with public agencies from Andy, both construction and surety related. He has been a wonderful mentor to me over the years. Collaboration with other groups in the industry is important for the greater whole, and NECA has proven that they are all about advancing their industry, in this regard.

When I speak about the value of association memberships in guiding and forming our careers in the greater construction industry, this relationship with Andy will always be at the top of my list regarding the benefits of forging meaningful connections.

Listen below for the full podcast interview with Andy where he discusses his successful history and issues facing contractors today.

Litigation Funding Contributes to Higher Claim Amounts and Premiums

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

The first quarter of 2024 is in full swing and the insurance industry is already feeling the rising cost of insurance claims, often referred to as social inflation. Commonly discussed reasons for social inflation include socioeconomic, legal, and behavioral trends that produce costly lawsuits, according to research conducted by The Institutes. In addition to these familiar observations, a relatively new factor is now playing a role in large lawsuits: third-party litigation financing.

Litigation financing refers to the practice of private equity companies, hedge funds, and other investors taking a calculated risk to invest in lawsuits, according to The State Bar of California Standing Committee on Professional Responsibility and Conduct. The Insurance Information Institute estimates that $30 billion will be invested in litigation financing by 2028.

A simple example that typifies the arrangement is an investor paying for legal expenses in exchange for a portion of the settlement. A plaintiff may agree to this in hopes of increased damage awards.

The downsides to litigation financing include prolonged litigation, litigants receiving only a fraction of the award, litigants demanding higher settlements to cover the cost of the investments, and funding agreements impacting an attorney’s judgement when representing a client. The ultimate downside occurs when underwriters charge higher policy premiums or reduce appetite, making coverage very difficult or impossible to obtain.  

As the practice of third party litigation financing grows more common, legislation and regulation must catch up and may need to implement guidelines to better protect the interests of both policyholders and insurers.

If you have questions regarding social inflation and the impact on your policy premiums, please contact me at 619-937-0175 or sbrown@ranchomesa.com.

The Critical Importance of Nonprofit Executive Transition Planning

Author, Jack Marrs, Associate Account Executive, Rancho Mesa Insurance Services, Inc.

In the world of nonprofit management, the departure of an executive director can cause a time of uncertainty. This kind of challenge is why all nonprofits need a well-crafted executive transition plan. This plan is not just a roadmap for navigating the change in leadership but a tool for sustaining and growing the nonprofit's mission. In this article, we will dive into the importance of having an executive transition plan, the key components that make up an effective plan, and the benefits it brings to the nonprofit sector.

Understanding the Role of the Executive Director

The executive director's role is crucial in shaping the nonprofit's direction, culture, and public image. These leaders have many roles from strategic planning and fundraising to staff morale and community engagement. Therefore, the departure of an executive can leave a void that is difficult to fill without a transition plan in place.

A well thought out executive transition plan begins with a deep understanding of the executive director role within their nonprofit. It involves evaluating the organization's current needs, future plans, and the specific qualities in a new leader that will allow them to successfully fulfil the nonprofit’s mission moving forward.

Alignment and Visioning

The next step is to make sure that the organization’s future plans align with the board’s vision. In order for the organization to continue to be successful, everyone needs to be on the same page and have a deep understanding of the organization’s goals.

Developing a transition plan that is prepared for different types of departures like planned, unplanned, or strategic, shows your level of preparedness. Whether the transition is expected or sudden, having a clear plan in place minimizes disruptions and allows the organization to focus on its mission.

Cultivating Internal Leadership

One of the plan's key components is the focus on internal leadership development. By identifying and training potential future executives within the organization, this will create qualified employees ready to step into a leadership role when needed. Also, internal employees bring a deeper understanding of the nonprofit’s culture and operations, making the transition period much smoother than hiring from outside the organization.

The Search for New Leadership

Finding the right executive to guide the nonprofit through its next phase is the most important part of the transition plan. This process involves setting clear criteria for the ideal candidate, conducting a thorough search, and the selection process itself. The plan should outline the steps for advertising the position, screening candidates, and holding interviews, while keeping the organization’s mission on the forefront.

Also, finalizing the transition does not simply involve the selection of a new executive director but also ensures that they are fully integrated into the organization. This would involve a detailed onboarding process where the new leader is introduced to the team and understands the nonprofit's operations.

The importance of having a comprehensive executive transition plan cannot be overstated for nonprofits. By thoroughly understanding the role of the executive director, aligning the transition with the nonprofit's vision, cultivating internal leaders, selecting and integrating a new leader, nonprofit organizations can successfully navigate the executive transition with confidence and ease. This approach not only protects the organization's mission during times of change but also sets it up for future success.

With a strong presence representing the insurance needs of nonprofits throughout California, Rancho Mesa prides itself on understanding both the risk management and operational components within this important space. For questions on this article or to learn more about how Rancho Mesa can help your organization, contact me at jmarrs@ranchomesa.com or (619) 486-6569.

Resources

https://alysterling.com/nonprofit-executive-director-transition/
https://www.philanthropy.com/article/the-great-nonprofit-leadership-turnover
https://boardsource.org/fundamental-topics-of-nonprofit-board-service/executive-transition/
https://buildingmovement.org/reports/the-leadership-in-leaving/

Performance Bonds for Private Equity Contractors

Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.

We have entertained several recent submissions from our construction division prospects looking for bonding support of their companies that are majority owned by a private equity firm. The traditional surety market will push back on private equity submissions pointing out the goodwill and large amount of debt listed on the balance sheet. Throw in the limited indemnity package offered in support of the bond program and we have created a perfect storm for the account to be declined without any actual underwriting taking place. But there is hope!

Let’s first take a step back. For our standard construction bond program, we preach the retention of capital and net profit as the best way to increase your bonding facility. The bond company will also look to company and personal indemnity to ensure they are protected in the event of a bond claim. This is in deep contrast to the private equity arena where the payment of monthly interest on debt and write-off of goodwill often translates into a net loss on the income statement translating into reduced net worth. Also, no personal indemnity is afforded to support the bond program. In fact, only limited indemnity from the principal is available.

Fortunately, a number of large commercial surety carriers are willing to look beyond the net worth underwriting roadblocks and concentrate more on cash flow, available bank credit, and other working capital items to consider a bonding program. 

By providing quarterly financial updates, work in progress schedules exhibiting strong gross profit margins, and generating advance discussions of potential acquisitions, the broker and client can get out ahead of potential underwriting distractions.

If you would like more information or want to discuss what is needed in support of a bond program for your private equity owned company, please contact me at (619) 937-0165 or mgaynor@ranchomesa.com.

How to Strategically Grow Your Construction Company

Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

One of the biggest ongoing challenges in the construction industry today is hiring and retaining quality employees that can help build on a company’s foundation. Growing a construction company in a sustainable way through internal promotions while also integrating new hires can separate one company from its competitors.

Employees are a company’s most valuable asset and making sure the right people are in the right positions is vital to profitable growth. There are high performing laborers at every construction firm but just because they are successful in one position does not necessarily mean that they will transition successfully into becoming a great estimator or superintendent. So, it is critical to promote the right people into the right positions for the success of the company.

Promoting from within is typically more cost effective than an outside hire and leads to a boost in company morale. The promoted employee already knows your company culture and safety expectations, and they can pass their knowledge onto new hires. So, finding the right internal people to elevate into leadership positions is the logical path, when available.  

Having assessment tests and specific steps for how to be promoted in your employee handbook is a great way to provide both new and seasoned employees a clear path for career growth.

Identify employees that can handle stressful situations and are poised problem solvers. Do not wait for a need to arise; start including these valued employees in meetings to make sure they are prepared to take on a new role when the company is ready to grow or there is an opening due to an employee retirement. This can alleviate some of a leader’s workload allowing them to deal with big picture issuing facing the firm.

Take advantage of both safety and professional development courses to grow your existing employees. Rancho Mesa’s SafetyOne™ platform provides online safety courses for employees, while the RM365 HRAdvantage™ Portal offers online courses to help employees hone the soft skills they will need to grow their careers.

While this topic remains one of the most challenging aspects of running a construction company, do not let this problem be compounded by being unprepared. Stay diligent in the hiring process and pay attention to the employees you do have with the right traits. This can lead to lower insurance costs as more efficient employees in management positions can directly assist with building a safer culture with more preparedness when claims arise.

If you have any questions pertaining to this article or any other insurance questions, do not hesitate to reach out. You can contact me at ccraig@ranchomesa.com or call at (619) 438-6900.

OSHA Form Submission Time: A Refresh

Author, Megan Lockhart, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

It's that time of the year again, when employers review their work-related injuries and illnesses from the past year and fill out their OSHA 300A Form. Companies in designated industries must electronically submit the 300A Form to OSHA by March 2nd, 2024. As this deadline swiftly approaches, let’s review further details of these requirements.

In addition to the 300A, companies with 100 or more employees in high-hazard industries must also submit information from their form 300-Log of Work-Related Injuries and Illnesses and Form 301-Injury and Illness Incident Report to OSHA annually.

Furthermore, the 300A Form must also be posted in the workplace, visible to employees, from February 1st to April 30th. The Form 300A does not include personal information such as employee names for confidentiality.

Rancho Mesa clients can utilize the RM365 HRAdvantage™ portal to track their incidents and generate their OSHA 300A Summary along with generate a .csv file that can be used to upload their incident information to OSHA’s Injury Tracking Application (ITA).

Employers can electronically submit their injury and illness information via OSHA’s ITA. OSHA changed their login format as of January 2023, so those who have not logged in last year will need to create a new Login.gov account, using their same email address, to access the application.

The forms 300A, 300-Log of Work-Related Injuries and Illnesses and 301-Injury and Illness Incident Report, as well as instructions on how to fill them out can be found in the OSHA Forms for Recording Work-Related Injuries and Illnesses document.

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

Top 5 OSHA Violation Trends and Solutions

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

Every year, Federal OSHA conducts thousands of inspections and issues costly citations to companies. So, it is imperative for business owners and safety managers to be aware of the most common citations and how to avoid them through effective safety programs.

Back in September 2021, Rancho Mesa highlighted the top Cal/OSHA citations issued during the 2019/2020 reporting period in podcast Episode 136. Now that the 2023 Federal OSHA data is available, we can analyze the citations that were most common across the United States to see what’s changed and evaluate our safety programs to avoid being another statistic.

Although OSHA violations can be issued for numerous reasons, the most common five violation in 2023 were:

1. Fall Protection-General Requirements (Standard 1926.501)

This standard outlines where fall protection is required, which systems are appropriate for given situations, the proper construction installation of safety systems, and the proper supervision of employees to prevent falls. It is designed to protect employees on walking/working surfaces (horizontal or vertical) with an unprotected side or edge above 6ft.
There were 7,271 fall protection violations in 2023 up from 5,260 in
2022. To help avoid fall protection citations, take advantage of Rancho Mesa’s proprietary SafetyOne™ mobile app and website’s fall protection resources like the online awareness course, multiple toolbox talks, various risk observation checklists, and sample Fall Protection Program that is designed to reinforce the company’s policies.

2. Hazard Communication (Standard 1910.1200)

This standard addresses chemical hazards, both those chemicals produced in the workplace and those brought into the workplace. It also governs the communication of those hazards to workers.

There were 3,213 hazard communication violations in 2023. Proper hazard communication in construction environments can save lives. Consider utilizing the variety of hazard communication resources in our SafetyOne platform with online trainings, toolbox talks, and sample policies and checklists.

3. Ladders (Standard 923.1053)

This standard covers general requirements for all ladders.

There were 2,978 ladder violations in 2023, more than 800 more than 2022’s 2,143 violations. The RM365 Advantage Safety Star™ Program’s Ladder Safety module provides an in-depth practical overview of ladder safety from seasoned risk control experts. Utilize the SafetyOne platform’s online training courses, toolbox talks, risk observations and sample policies to ensure your employees are compliant with your company policy.

4. Scaffolding (Standard 1926.451)

This standard covers general safety requirements for scaffolding, which should be designed by a qualified person and constructed and loaded in accordance with that design. Employers are bound to protect construction workers from falls and falling objects while working on or near scaffolding at heights of 10ft or higher.

There were 2,859 scaffolding violations in 2023. Safety is everyone’s responsibility, so utilizing Rancho Mesa’s SafetyOne sample scaffold policy to provide a framework of best practices to help comply with OSHA Standard 1926.451. Reinforce your policy through toolbox talks, online courses and help prevent unsafe conditions with scaffold risk observations.

5. Powered Industrial Trucks (Standard 1910.178)

This section contains safety requirements relating to fire protection, design, maintenance and use of fork trucks, tractors, platform lift trucks motorized hand trucks and other specialized trucks powered by electric motors or internal combustion engines.

There were 2,561 violations in 2023. OSHA mandatory guidelines include operator training and certification, pre-shift inspections and operating environment restrictions. The best way to avoid these types of citations, is by using the risk observations in SafetyOne to document your equipment inspections. Ensure employees are trained by utilizing the toolbox talks and online training courses.

Rancho Mesa knows these top five citations can be avoided by reviewing safety programs often and ensuring they are effective. Clients can take advantage of the RM365 Advantage Safety Star™ Program that specifically addresses some of the most common citations.

To discuss your safety program, workers’ compensation or other insurance needs, contact me at (619) 937-0167 or sclayton@ranchomesa.com.

Best Practice Tips for Lowering Your Commercial Auto Rates

Author, Jeremy Hoolihan, Partner, Rancho Mesa Insurance Services, Inc.

For the last several years, the insurance industry has seen a significant increase in auto rates. In 2023, the top ten auto carriers in the US all saw double digit rate increases. This, in addition to the rate increases we’ve seen since 2018, equates to rates anywhere from 20-50% higher than we had just a few years ago. According to US auto insurers, these rate increases are still not keeping up with the skyrocketing claim frequency and severity. Therefore, we are likely to continue to see auto rates increase before things level off. 

With that being said, positioning your company now with a best practice fleet safety program is more important than ever. It is also critical that business owners work closely with their insurance brokers to develop a program that will not only improve safety on the roads, but will also highlight the efforts a company is focusing on from an underwriting perspective. Minimizing rate increases only comes with the collective efforts of the business owner and their insurance broker. In order to even consider receiving any credits on auto rates, a business needs to stand out from other submissions an underwriter is reviewing. Rancho Mesa understands how important this is which is why we have developed our detailed Fleet Supplemental Application and SafetyOne™ Driver’s Training Program.

As an insurance broker, a vital role we play is representing a business to the insurance marketplace. Providing underwriting details of the business to insurance carriers in an effort to make them interested in quoting the insurance is only the first step. Providing in depth details relating to fleet safety and efforts that go beyond what an underwriter is used to seeing is what Rancho Mesa strives to submit. The more details an underwriter has regarding an auto submission, the more comfortable they will be with the company’s program, which generally leads to more subjective credits. Rancho Mesa developed a Fleet Safety supplemental that dives deep into a business’s fleet program. It collects general information such as fleet size, driving radius, and description of vehicle usage. It also explores details surrounding safety management. Examples of the information collected include:

• Safety controls

• GPS or telematics details relating to maintenance, speed, location, routing, etc.

• Accident reporting

• Fleet safety courses provided

The Fleet Supplemental also provides vehicle and driver information such as:

• Information relating to any permanently attached equipment

• Vehicle inspection and maintenance program

• Where vehicles are parked overnight

• Personal usage policy with employees

• Safeguards in place relating to storing of vehicles

• Process for reviewing and selecting drivers

• Review of Motor Vehicle Reports

• Pre-employment physicals, drug testing, and alcohol testing

Another useful tool relating to fleet safety is Rancho Mesa’s proprietary application called SafetyOne. Rancho Mesa has developed a driver training program that is accessed through the SafetyOne website. The administrator can assign the online driver training courses to the appropriate employees where they can easily be completed from a computer or mobile device.

Since each employee has their own login and password to access their trainings, the records are always easy to locate in the platform.

Driver training courses include both a video and quiz. And, they are offered in both English and Spanish. Employee watch the video and then take the quiz. This can be done as many times as needed in order to pass the course. We want people to really understand the content, not just get a minimum passing score. 

Courses include:

• Distracted Driving – The course covers the cost of distracted driving, “multi-tasking”, technology and distraction, eliminating distractions before you drive, cell phones, and fighting distraction on the road.

• Driver Safety – The course covers preparing to drive safely, driving fundamentals, driving with other vehicles, driving a night and bad weather, distracted driving and road rage, and handling an emergency.

• Driving Defensively – This course covers the fundamentals of driving defensively, dealing with distracted drivers, coping with aggressive drivers, using your headlights, driving safely in bad weather, handling a blowout, and sharing the road with trucks and buses.

• Driving Safety – This course is a refresher course that covers preparing to drive safely, the fundamentals of safe driving, driving safely when sharing the road with different types of vehicles, staying safe when driving at night and in inclement weather, road rage and distracted driving, and what to do if there’s an emergency.

While the auto marketplace continues to see rates increase, now is not the time for businesses to sit back idly and be complacent with their fleet safety program. Working with your insurance broker to improve your fleet safety program and sharing this information with insurance companies can have a significant effect on your auto premiums. 

If you would like to discuss how Rancho Mesa can assist in improving your auto risk profile, please feel free to reach out to me at (619) 937-0174 or jhoolihan@ranchomesa.com.

Unlocking Working Capital in Construction: Options for Reducing or Releasing Retention

Author, Andy Roberts, Surety Account Executive, Rancho Mesa Insurance Services, Inc.

Retention is a very common practice within the construction industry that typically involves 5-10% of each payment to the subcontractor being withheld until the project has been completed. The purpose behind this is simple, it is designed to make sure that subcontractors satisfy their contractual agreements before they receive their last payment for the work they have done.  While this practice serves a real purpose, it can cause significant issues for subcontractors if the payments are delayed.

Regardless of the reasons why a retention payment could be delayed, whether it be overall project completion delays or if there are issues with the work performed, the delay in payment can cause significant cash flow issues.  For subcontractors that do a lot of bonded work, cash flow issues will have a direct impact on their working capital which can have a negative impact on their bonding program.  However, there are some strategies that subcontractors can employ to get their payments released sooner, like negotiating the terms of the retention release in the contract. 

Prior to signing the contract, it is important that a subcontractor review and attempt to negotiate any unfavorable retention release terms. One option is negotiating a 10% retention down to 5% in the contract.  Should that not be achievable, subcontractors can provide performance and payment bonds which might convince the project owner and/or general contractor to lower the retention amount or release the retention sooner.

Performance and payment bonds protect the project owner and the general contractor in case the subcontractor fails to fulfill their contractual obligations, which is the main reason that retention is being withheld.  Therefore, the presence of bonds on the project may allow a subcontractor to negotiate terms that are more favorable to them, potentially lowering the percentage withheld from each payment, or even getting it released at earlier points within the project.   

While retention remains a standard practice within the construction industry, it can cause significant issues for a subcontractor should those payments be delayed.  So, negotiating these terms in all contracts is vital while also using the ability to provide bonds on the project as a solution to getting more favorable terms. 

Should you have any questions about this or you are having issues with retention being withheld, reach out to me at aroberts@ranchomesa.com or 619-937-0166.

Navigating the Construction Labor Shortage: Factors and Strategies for Success

Author, Kevin Howard, Partner, Rancho Mesa Insurance Services, Inc.

Construction companies nationwide are grappling with a shared challenge: a labor shortage propelled by various factors. In this article, we will explore these factors and highlight key areas that can contribute to managing bottom lines effectively.

Factors Contributing to the Labor Shortage

Focus on College over Skills Training. Younger people have been opting for academic paths rather than entering the trades. For years, students have been encouraged to attend college in order to have a successful career. Therefore, fewer recent high school graduates have opted to enter trade apprenticeship programs which has significantly reduced the number of people being trained to enter these vital fields.

Retiring Workforce. The imminent retirement of the baby boomer generation (born from 1946-1964) poses a significant challenge. Skilled workers, including superintendents, project managers, and jobsite managers, form a substantial portion of those exiting the workforce. This creates a demand for skilled workers and necessitates a heightened focus on training apprentices.

Inflationary Costs and Higher Wages. Attracting and retaining skilled workers has become a budgetary challenge. Pandemic-induced wage inflation has led to an increase in payroll, resulting in both higher training costs and salaries. Additionally, prevailing wage rates have reached historic highs, contributing to a slower pace in hiring entry-level trade positions for budgetary reasons.

Strategies for Success

As the construction industry struggles with the ongoing labor shortage, business owners must strategize to protect their bottom lines. While challenges persist, focusing on key areas can help mitigate the impact on productivity and costs. Some central aspects that merit attention and investment include:

Safety Training. With an influx of new, unskilled workers, prioritizing comprehensive safety training becomes paramount. This not only helps prevent injuries but also contributes to a safer and more efficient work environment.

Rancho Mesa’s SafetyOne™ mobile app and website provides proactive safety orientation training for new hires plus ongoing safety training for all employees.

Insurance Cost Management. Implementing robust safety measures can positively influence insurance costs. By minimizing workplace accidents and demonstrating a commitment to safety, construction companies can negotiate more favorable insurance premiums.

Using Rancho Mesa’s SafetyOne™ mobile app to monitor safety on the jobsite through risk observations provides the data to show they are committed to safety.

Claim Reviews and XMOD Management. Engaging in claim reviews in regular intervals with your broker to address lingering workers' compensation claims can serve as an effective strategy for minimizing insurance costs, particularly in terms of mitigating XMOD increases and improving overall loss ratios.

Rancho Mesa’s claim advocacy approach remains a critical tool for Rancho Mesa clients.  Jim Malone, the company’s claim advocate, communicates regularly with adjustors and helps advance claims to closure, thus helping insulate XMODS.

Strategic Workforce Planning. Develop long-term workforce plans that account for the aging workforce and the need for skilled labor. This may involve targeted recruitment efforts, partnerships with vocational schools, and apprenticeship programs.

While the construction industry faces substantial challenges due to the labor shortage, proactive measures in safety, insurance management, and strategic workforce planning can help businesses weather the storm and maintain a healthy bottom line.

For more information on these proactive strategies, reach out to me at (619) 438-6874 or  khoward@ranchomesa.com.

2024 Sees COVID-19 Claims Reporting Changes in California

Author, Megan Lockhart, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

As of January 1, 2024, several COVID-19 claims reporting requirements are changing for employers in the State of California.

Beginning this year, employers are no longer required to report COVID-19 cases to their carrier in order to determine workplace outbreaks.

Additionally, COVID-19 is no longer automatically assumed to be a work-related illness. Previously, if a certain number of employees tested positive for COVID-19 within a specific amount of time, those employees’ workers’ compensation claims were presumed work-related, making them eligible for benefits. Now, if an employee claims a COVID-19 injury, it will be treated as a regular claim instead of a presumed work-related illness.

Also, the time frame for deciding liability in COVID-19 injury claims, previously 30 to 45 days, has now returned to the original 90-day timeframe.

Employers are still required to follow Cal/OSHA’s reporting requirements regarding a COVID-19 case, and clients should be aware of their location’s county health department reporting standards. Although most no longer require reporting, health departments such as Los Angeles County still demand companies report employee COVID-19 cases over a certain number.

For questions regarding these changes, visit  www.dir.ca.gov/dosh/coronavirus.

Cracking the Code: Deciphering the Primary Threshold’s Impact

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

Every business owner understands the correlation between their Experience MOD (XMOD) and what they will pay in workers’ compensation premiums.  When the XMOD increases, there is a good chance that the workers’ compensation rates or premiums will rise as well.  This is why it is so crucial to really hone in on company safety procedures to limit work-related injuries as much as possible.  The reality is that even the safest company that does everything the right way is going to run into a workers’ compensation claim from time to time.

So, when the inevitable workers’ compensation claim happens, what are you supposed to do?  What impact will this have on the XMOD?  The first component that business owners need to understand is that there is a cap to how much any single workers’ compensation claim can impact the XMOD.  That cap is called the primary threshold.  The primary threshold varies from company to company and is based off of the company’s payroll.  The more payroll a company has the higher the primary threshold.

For this example, a company has a primary threshold of $15,000 where the maximum number of points that any one claim can impact the XMOD once reaching the threshold is 10 points.  This means that a claim that costs $15,000 and a claim that cost $150,000 will have the same impact (10 points against the XMOD).  However, this does not mean that claims that exceed the primary threshold can be disregarded, because the higher claim cost you have will impact your current and 5-year loss ratio (incurred claim cost/premium paid).  Additionally, if a claim that was reserved higher than the primary threshold and can be closed or decreased lower than the primary threshold, XMOD points can be shaved off of that claim.

Knowing the importance of the primary threshold, we designed our proprietary the KPI dashboard that allows our clients to see their primary threshold number and corresponding maximum impact to the XMOD any one primary threshold claim would have. 

If you have any questions about your XMOD or would like us to create a KPI for your company, please feel free to reach out to me at (619) 438-6905 or ggarcia@ranchomesa.com.