Shaping the Industry's Future with SDSU’s Construction Management Program

Surety Account Executive Andy Roberts interviews ⁠Thais Alves, Chair of the Construction Engineering and Management Program at SDSU, about her journey to academia, the growth of SDSU's construction management program, and the role industry support plays in shaping future leaders in construction.

Andy Roberts: Hello everyone and welcome back to Studio One. I'm Andy Roberts, a Surety Account Executive here at Rancho Mesa and also your host for this week's podcast. Today, I have the joy and honor of being joined in studio by Thais Alves, who is a professor and the Chair of the Construction Engineering and Management Program at San Diego State University. Thank you so much for joining me today.

Thais Alves: Thank you Andy. I appreciate the invitation and the opportunity.

AR: Yeah I was super excited when you said you were on board for coming in here and letting me ask you some questions and, you know, get to be on this side of it. So you know first off I think it'd be good to kind of tell us a little bit about yourself like where you're from, how you got here, just any background information you like to share with us and the listeners because you know I mean we've kind of connected over the last few years but that's usually just out on campus and getting ready to do the presentation and stuff like that.

TA: Right. I feel that I get to talk more about you than you get to talk about me. Yeah, so I'm originally from Brazil and this is a joke that I play with my students. I asked them where this accent is from and I get a few, you know, guesses. I was trained as a civil engineer and when I was in civil engineering during my time in the major, I thought I was going to be a structural designer, a geotechnical designer, and then at some point I got to see construction. And then that changed, like I had discourses towards the end of my major back in Brazil, and I got to intern in a construction site and work with people on the field and then started doing research, and then my career has been academic through and through and I went through my masters back in Brazil then I came to my PhD in Berkeley and all along the research that I developed was always related to people in the industry so I didn't have a lab on campus. I say that my labs are the construction sites, the organizations and this led me to where I am today because over the years as I did my research and advanced whatever theory I was working on, I met a lot of people along the way and this serves me very well today. It helps me to meet people like you, like Anne Wright. It helps my students get jobs, the program gets funded. So I think over the years, I just kept accumulating this human capital in these contacts and the network that I have today and I appreciate that. So that's how I got here and I've been at SDSU since 2009. So this is year 16 for me.

AR: Yeah, but it goes fast.

TA: It does and I mean, it's amazing to see how we have grown in different ways here, which I guess we are going to talk about later. But I feel that every step of my career prepared to the next one. When I was working back in Brazil at some point, I was asked to create a program there, and I went through the process of creating the program. And fast forward to 2017, I was asked to create the construction management program in addition to our construction engineering program. So one thing leads to the other.

AR: Yeah, absolutely. What's the difference like between, kind of, academics in Brazil versus stateside?

TA: So interestingly enough, and again, this is one of those things that your network leads you to places that you never know. When I finished my PhD program at Berkeley, I went back to Brazil and I started working there. And the place where I was working at, it's a city in the northeast of Brazil, it's called Fortaleza. And the industry was extremely supportive of the research of that group. They cannot financially back the schools there, like we have the support here, but they would support our research. So there was always this sense that you were working with people in the industry all along the way. Then when this opportunity came up here, I felt that I was very uniquely positioned because I came to an environment that was very similar to what I had worked with before and at that group back there.

AR: That's really nice.

TA: So I think the fact that there are academics that they have their lives on campus and they don't need to get out of school or to their labs to talk to people right they do research they teach and they stay there. In my line of work this is impossible.

AR: Absolutely. Yeah.

TA: So if I don't talk to people like you, if I don't invite people like you to come to my classes and build this network, I think this doesn't work, doesn't work for me, doesn't work for the students either.

AR: Well, and it's probably really beneficial for the students to be out participating in the network as well and kind of seeing, you know, I find the industry very exciting and, you know, we're always building stuff around San Diego and, you know, it really and it helps their perspective to see stuff in real life.

TA: Yeah, and I think here, the community here in San Diego is absolutely phenomenal. I mean, I think, I see other CSUs, right? I see my colleagues in UCs and the CSUs, and when I tell them the kind of support we enjoy here in San Diego, they get so jealous, right? Because we have AGC supporting our program, it's beyond belief, like all that they do for us and all the support that we enjoy from AGC, the leadership, the staff, the board, also we have the support of NECA who's also a strong backer of our program. We see this here as like a very unique place to be and this reflects in terms of the relationship that the industry also has with our students. So for example, every week or every other week, the students bring folks from the industry to speak. So yesterday there was a company speaking in one of our student chapters. Tomorrow there is another one. And everybody, because we are in a metropolitan area, it's very easy for everybody to drive to SDSU and present. So I feel that we are extremely blessed, not just in terms of support, but where we are. It gives us access to construction projects, to professionals like you and so many other opportunities.

AR: Yeah, well, it's really beneficial, too. I mean, you think about it, like, especially on AGC, like, you know, San Diego is one of their better, bigger, you know, more involved chapters, you know, kind of nationwide. And same thing with NECA, too. Right, so it's really beneficial for her to have those kind of involvement, you know and those types of organizations backing you and helping you out.

TA: Yeah, and the other point is you know, we've been pointed the fact that these are special chapters These are groups of people who have been recognized nationally and I can also I cannot forget CMAA also has been with us in the program since the very beginning and so much so that the chapter we have one of our major chapters is called AGC and CMAA. So it's a chapter that pulls these two organizations together and CMA has also been along with us. Our chapter has received awards in the past. The local CMAA chapter has received awards, SDSU as a partner has received awards. In other words, we work well together and I think there is this symbiotic relationship that people want to be associated with us and we want to be associated with them and we grow together. I think that's very important.

AR: Yeah, well, it's just so nice too on those like, you know, the AGC and NECA, there's so many owners that are really, really involved in those organizations. I mean, I've seen taking a real vested interest in what's going on at San Diego State and it's really exciting and it's really great to see like the community really participate and want to see that grow because, you know, it takes time out everyone you know their day to do that kind of stuff but they see the long-term value in it and you know when we come and speak in your class and you see all the different internships that all the kids have with all the different companies and it's really exciting. And you know you see the excitement from them too when we ask that question of like who are you working for this summer, who did you work for? And you know, they all want to raise their hands and tell us all about it.

TA: Yeah. And I mean, come August, I'm going to be emailing you and Megan and Anne to come back and present to them. And it's, it's very rewarding to see the interest in the local companies like they want to hire from our program. And we also receive very good feedback when we hear from them about the students who are going to work in the local market. And most of them, they stay here in Southern California. Their plan is to stay in San Diego. If they can find a job here, they will stay here. And then the next choice is to stay up to L.A. in Southern California, and some of them stay go up north, back where their families are. But most of our students, they stay here. So that's one more reason for the local industry to support the program because they don't have to go and recruit people from elsewhere and make them get used to the way we live here. And of course it's a very expensive area. So whoever wants to be here, they already know how this area works, how it functions, they know the industry. So that's very important too.

AR: Yeah, Well, so kind of you know, we've seen what the support is kind of done with the program like how like where's the program come? Like how did it start originally and like when you came in on? 2017 you said.

TA: 2009.

AR: 2009. Okay. Oh 2017 was when you did the construction management portion of it.

TA: Yes.

AR: So like how is it transformed from when it started to like where it is now?

TA: Yeah, that's a story that I told a few times, but it's interesting how the industry came together and it all started with Pete Phelan's and the Phelan's family. He came into the university and said, "Hey, you guys have a civil engineering major here, but we should have construction-related majors."

And during that time, the university looked around and said, "You know, if you want that construction major, I guess you're going to have to fund it,” or something along these lines. And they hired somebody who started the program, Professor Ken Walsh, and he was a very important figure to start this whole program, because I think he came here in 2004. So over 20 years ago, he started the program. The Phelan's family named it, so they made a big gift, and our program is named J.R. Phelan's Construction Engineering Management Program, and when you look at that, the program is housed in the College of Engineering, so they had to start with construction engineering first. So in 2008, I believe, was when the first class graduated with a construction engineering degree, so between 2004 Ken Walsh came in here and started everything, and in 2008, the first class graduates. And fast forward to 2017, I'm in my office on a Friday afternoon. And if you are in your office on a Friday afternoon, you're going to pick up calls that maybe you should push to Monday, right? I have had several of those. It's like, “Should I pick up this phone?”

AR: You see that caller ID, you're like, I don't know about that one.

TA: Yeah. So I get a call from my Dean, the Dean of Engineering. And he said, "Look, the industry is asking when we are going to start a construction management program."

And he had talked to other people and he didn't find whoever was the person who was going to push that. And he said, "Do you want to do it?" And I'm like, "Yes, I will do it."

And actually when I was hired, in my interview, I was asked if I had any interest in starting a program and at the time when I arrived that program should have some relationship with the College of Business because there was some real estate component to it but when we got to 2017 and I got that call the dean said this program has to be in the College of Engineering and it's going to be a more engineering you know based kind of curriculum. He said I want the students to take classes in the College of Engineering, and you can put classes elsewhere, but it shouldn't be the bulk of the program. So this was 2017, and the program didn't get into the system for the CSU system until 2020. So it took three years for the program to show up online so that the students could apply. And then 2021, we got the first class admitted as construction management majors. So I was excited. I was, you know, so happy we have this picture of our first time we got that class together. We have the, it was during the COVID years.

AR: I was going to say, that's got to be a little challenging because everything was kind of all shaken up and not running as normal then.

TA: So we were in class in 2021, but everybody was wearing masks. So we have this picture of the first class in 2021, everybody's wearing masks and they're going to graduate this year. So I have to dig that picture and compare who made the four years, made the four years. But interestingly enough, there were several students who were around and they knew this major was coming. They were calling me and emailing me during the pandemic and they were like, "When is this major going to start? I want to start taking courses so that when it's officially the catalog, I'm going to jump in.”

So what happened was we graduated our first class in three years because of that.

AR: Oh yeah, they've done a bunch of the pre-kind of stuff.

TA: So I have this student number one that I remember, he was so insistent and I was like, "We don't have a major yet," he said, "but I'm going to start taking the classes."

And when the major is out, I have the classes ready and he graduated last year, he's working for Hensel Phelps. And it was James, his name is James Snoke. It's a shout out to him. I say this, he's the first construction management student who jumped in even though there was not an official major.

AR: Was he on the engineering side or was he somewhere else within the school like college?

TA: I don't know if he came as a business major and then he decided that whatever he got in as a major, he was going to follow the flow chart of the new major. So he met with me and he said, "What courses do I need to take so that when these start I'm already on track?" So because of him and others who came in those first few years, I had to put classes in place much faster than what I had to do for the class that is graduating now in four years. Because these guys were ahead of the curve.

AR: They're ready to go.

TA: So last year we graduated 14 students and this year we are going to graduate double that number, about double. So it just shows how the program is growing. You probably saw that when you presented that.

AR: Absolutely.

TA: Right, the class was very small when we had to change. Like you came to three different classrooms because the class…

AR: Each one’s bigger and bigger and each time you walk in, like, oh, man, there's a lot more people here to talk to.

TA: Yeah. And I mean, the more the merrier, right?

AR: Absolutely. Well, and it's really nice to when we go to do that, because the first time I did it, you think about, oh, it's college kids. Like, what's their interest level going to really be like? But everyone in there is so invested in this major and what they're doing. And they're so engaged. It makes it a lot of fun to come in there and they're always asking questions and you know seem to really, maybe not, I don't know if it's enjoy the right word but I appreciate that we're there to talk to him about something and what they take away from it So it makes it fun on our end too.

TA: Yes, and you know yesterday I was talking to somebody who has a son who wants to switch into construction management and I wrote to that person This is somebody who is in the industry and the son wants to join the industry, he's in a different major, he's not finding his path and wants to join construction management and I said, you know, through the transfer. So this person's going to have to apply and transfer like any other student who'd be admitted. So I told him that I like to think that our program is also very nurturing. We have such great support from the industry, right? These people want to see them grow, they're going to give them tough love when tough love is needed, but they are very nurturing. And I like to think that our faculty is like that too. So we are there, I'm there every day and I have another colleague who shares the office where we stay and my other colleagues are there, but she and I, we have this special bond that we are like, don't give me excuses, do your homework and like we are there and we are not accepting excuses. And another shout out, her name is Nancy Lakrori. I don't know if you have met her yet, but she's a phenomenal instructor. And she's very tough, very stern, but the students love her because they go through that and they know that they are learning for life, right? So having people like that in our program, it's very important because the students see that we are invested in their education. We are not just going there and talking, turning our backs, and collecting a paycheck. Like, we are there. For me, my work is not done until I see them walking on that stage and graduating. And hopefully, I'm going to be able to help them find a job. So I'm there all along the way.

Some students take more advantage of that than others. I think some of them, they are like, "Oh, I'm going to figure out my own way." But some of them, they take advantage of this mentorship and they get engaged in the clubs and competitions. And so that also makes a big difference for them.

AR: Yeah, absolutely. And I mean, I can even see when I'm in your class, just how, you know, with how engaged they are and just a lot of them feel so free to come and just talk to you and seek out your advice and help, which is really nice and it shows that you care, which is really important.

TA: In our office, like the faculty, we are five faculty who are focused in construction engineering and management, and we enjoy the support of the entire department that is civil construction and environmental engineering, so the students take courses with different faculty in this department that has 20 different people, but five of us, we are focused on that office, in that office, we are construction related for the most part. So they see that we are there for them. And I have colleagues who are more interested in research and the students can focus that on research and do like cutting edge research here. But the fact is we want to see that they feel that they are supported and we are there.

AR: Yeah.

TA: Right, we are there for them. I think that's very important.

AR: Yeah, no, it absolutely is very important. So, you know, you said, you mentioned it's doubled from last year. Like how do you see, what do you see for the future? Like with enrollment and interest, I mean, it seems to me, interest is only going up.

TA: So that's a great question. So we accept students from two main sources, like either they come because they applied to get into SDSU or they are already at SDSU and they show up in my office and they say, “My dad is in business in some business area of finance or something like this and I did that because my dad told me to do it but I want to do construction management.”

So they show up at my office like that right so the problem is some of these students they entered SDSU entered SDSU through a very tough process. It's hard to get into the college of business. But some of them are trying to find easier paths to get and go there and say, now I want to get into your major. And you're like, not so fast, right? If you don't have the math and physics preparation, which you need more for construction engineering.

TA: Absolutely, especially if you're in like a business or like a finance, if you take a finance class, it's just a sort of that type. It's a big difference.

TA: Yeah. So if they want the engineering one, they have an even tougher path, but they also need that preparation for construction management, which some of them don't seem to know. So they have to spend two years taking courses and getting good grades to show that they can advance in the College of Engineering, right? We are not saying that the rigor is up or down or different or—they have to be good in STEM courses because that's what they are going to keep taking and they are going to follow classes with other students in engineering. And at some point the engineers, they take a turn and they do more design and the construction management students take another turn and they go and do more management. But they have to be prepared to advance and so to your point going back so this is the explanation of how they come in so we were having so many students who were already at SDSU who wanted to join our major they talked to their friends and they hear about the industry and all that and they want to switch majors and in the beginning we were accepting because the major had space in the classrooms. Well we don't have any more. So now I'm trying to keep the program at 200 students. We have 175 for construction engineering and construction management, out of that 120 are construction management, 55 are in construction engineering, but we have 20, 30 students at any given time that they are trying to take those classes in the first two years and they are appearing some of our classes, right? So right now we have 200 people. Our advisory board wants to grow the program and I'm like, we cannot because who's going to staff the classes?

AR: That was going to be my next question.

TA: So we maxed out, like the class that you saw, that's the maximum. So we are counting that these classes that we used to have 15 people and now they have 60, that's it, right? We can't, so this generated a lot of discussions because the students would come as undeclared and they said, “Oh, now I want to do construction management.”

And maybe some people who are going to be listening to this podcast know somebody who wants to be in one of these majors and the right way to do is if they don't get in as a freshman, go to a community college, do the first two years in a community college, reach out to me, we can talk about how this person can start transitioning to SDSU until they apply and they transfer. That is a sure bet.

AR: That's great to know. That's really great to know and great to put out there.

TA: Yeah. This is very important because I receive messages and the students contact me about that and I think community colleges are so cost so cost efficient. They are not going to pay the big tuition of the big schools, and they take care of those core classes in the beginning, and there is an additional advantage. When students are in a community college, they can go to SDSU and take one course per semester, and they pay a fee, I think it's like $50. Don't quote me on that, but it's a small fee. It's not the full tuition for the course, but they can do what is called cross-enrollment. So for example, I teach a course that is called construction and culture, is construction engineering 101. And I have a lot of students who are in community colleges, and they are taking that course through cross-enrollment, but they get to know how we function

AR: That's fantastic. That's a great program.

TA: It's really good. And I have students, they are so in awe because I start my classes talking about internships and scholarships and clubs and events that are coming. So they are in awe that they have the opportunity to participate in those events even though they are still in the community college stage, right? And the same internships that I post for my students is posted to everybody and they start getting engaged with the industry early. So I love that kind of arrangement that we have the Freshman and we have the students who are going to be transferring already getting used to the system.

AR: Absolutely. I mean, that's just a great way to set this program up and them up for long-term success.

TA: Absolutely. And I cannot tell you how many great examples there are of students who they start on this path and they are so focused. Some of them are more mature. Some of them come from the military. They are veterans. And when you start talking to them, you see the wheels turning. And by the time they transfer, they are like 10 steps ahead of the people who are not involved because they were paying attention and they were taking advantage of this opportunity. So that is, I think it's a great, it's a great program.

AR: Yeah, that's awesome. I mean kind of last question I have for you is like what kind of support can we give you or what else can the industry as a whole do to really support this program?

TA: Well, I think the first one is keep hiring our students keep backing up these pro these projects that are happening here, right? So that they happen as they should but we have an advisory board who is the backers, the supporters, the financial backers of the program, they are part of our advisory board and we are going to have a meeting next month and usually they ask me for a wish list, right? So they tell me what they want to see and we tell them what we need and we kind of negotiate where we can go with what we have. But I think the first one is I hope the industry keeps supporting the program by hiring our students, but also supporting the program financially. I mean, we just had the news that we were going to have three years of 10% cuts in our budget. And then this was in February. Last month, we heard the cuts are not going to be 10%. They're going to be 12% now.

AR: Oh, no.

TA: So any help, any help in any capacity, of course, I appreciate you all coming and guest-speaking because that is golden. They are having that already in school versus having to learn about surety and insurance and all later, right? So when they have this chance to learn in class, I appreciate immensely that the industry is so supportive in coming and guest-speaking. We have teams that are mentored by the local companies here also and it's very important that we have people who volunteer their time to keep training our students. This is this like internships, jobs, mentorship during the program, guest speaking and of course financial backing. Any amount it's well received because we are facing a very tough budget right now.

Like from the state side, we have been hearing about it and now we know how deep the cuts are going to be. And we want to keep the program the quality of instruction, the experience that the students have. And one thing that I think it's beautiful is our students, they fundraise for their activities too. They just don't sit there and wait for the money to show up, right? So I think they see how I work with the industry, they see how much support they receive, and they nurture these relationships as well. And that's something that I work a lot with them, how to work with the local industry, the local supporters, and just help them help us, right? It goes both ways. They want to hire; they want to be hired.

AR: Yeah well, they need to put that investment in. If they want to hire, you know, quality workers that know what they're doing, it makes sense for them to put that time investment in to make sure that the program's doing well and they're getting the instruction that they need.

TA: Yeah. And it's the it's phenomenal as you go around and you visit projects and you meet former students like we meet our former students and I think a testament to how well I think we do in this nurturing and mentoring and creating this community is that they graduate and they want to keep helping, they want to be associated with us. They want to come and get speak and mentor and offer internships and I love it. I mean, what's not to love about that? It's a phenomenal place. I really appreciate the support of the industry. I appreciate your support and Rancho Mesa's support in going and presenting to my students because that's going to make them prepared, that they're going to be better prepared for what's coming.

AR: Yeah. Well thank you for saying that I mean, I really enjoy that day. It's super fun to see that you know, it makes me feel a little old when I'm walking around the college campus now, but outside of that I love that day. So thank you so very much for taking the time and coming to talk to me today this has been really wonderful.

TA: Thank you and thank you and thanks to Anne Wright for introducing us and nurturing this relationship and Megan Sanker who's always with us in that presentation so I want to thank all of you it's very much appreciated and the students see that they appreciate that too so thank you.

AR: Yeah you're welcome.

Understanding Premise Liability for Landscape Maintenance Companies

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Vice President at Rancho Mesa, Drew Garcia sits down with John Fischl, Regional Executive with Sentry Insurance, to discuss premise liability risks for landscape maintenance companies, focusing on preventing slip and fall accidents and strategies for mitigating these risks.

Drew Garcia: Welcome back everybody. I'm Drew Garcia, Vice President of the Landscape Group here at

Rancho Mesa. You're listening to StudioOne™ our safety and risk management podcast. Today we're joined by a Regional Executive of the Pacific Region for Sentry Insurance John Fischl. John welcome to the show

John Fischl: Oh, thank you, Drew. It's great to be with you.

DG: Oh, we appreciate you taking the time to come back in here. So, Sentry is a big partner of ours and particularly for me in supporting the landscape industry. And today we're going to take a few minutes to talk about premise liability, particularly for landscape maintenance companies, you know, protecting themselves, protecting their customer, protecting their insurance carrier, and also the general public from exposures that can exist on a commercial property.

And primarily we're talking about slip and fall, trip and fall issues that can occur where the insurance carrier might have to get involved if there's an injury or a claim. John, talk to us a little bit about the state of that market, what you guys are seeing, and then we're going to get into a little bit about some things that where we think landscape businesses can better protect themselves in the future.

JF: Well, Drew, as you know, the climate for liability claims in California has gotten very, very difficult. The personal injury attorneys, and I think everybody is aware of the amount of marketing those folks are doing. We've all seen that the hundreds of commercials on television for all the different firms and billboards, etc. Suffice it to say that if somebody gets injured on property, they are going to call--or very

likely will call--one of those personal injury attorneys. So because of that and the fact you've heard the term social inflation, people on juries nowadays are much more apt to award large sums of damages for injuries, pain, and suffering, etc. So because of those two things: the advanced level of marketing from the personal injury attorneys and the social inflation we see, even relatively minor injuries are turning into very large settlement amounts in a lawsuit. So that is a real challenge for anybody in the business of making sure that premises open to the general public are safe.

DG: A good point. And you see, you know, the impacts that has from the insurance carrier standpoint and ultimately the trickle down to the policy holder. When there's pressure on a particular line of insurance, and in this case we're talking about general liability and what that might bring from these premise liability exposures, when there's significant pressure on a particular line, like we've seen over the last five or six years with commercial auto, what's a typical reaction or what type of reactions could be seen from insurance carriers when there is that unanticipated pressure, maybe not enough rate adequacy, what are some positions that carriers have taken in the past to either handle or deal with scenarios like this?

JF: Well, as an insurance carrier, you only have a couple of choices. Number one, you can decide that the level of losses and the frequency of losses will be greater than what you can anticipate and you would then have no choice but to exit that market and in fact in the last year we've seen a major provider of liability coverage in California for the landscape industry do just that they exited the market. And this has happened multiple times over the last several years. The other thing a carrier can do is kind of hang in there, tighten up their underwriting, look less favorably upon a landscape operator that has some frequency of claims, perhaps not offer coverage to that landscaper, and also increase rates, which is ultimately what has to be done when the cost of lawsuits continues to rise. Carrier has no choice but to raise rates. That should be understood by everybody at this point.

And I think if you've been in business, you know, longer than five years at this point, you've probably been through some sort of market with insurance where you've been faced with non -renewal or significant rate increase. And, you know, it comes as a result of issues, you know, and I think that the stance that Sentry's taken at this point in terms of trying to work with the landscape industry to better shed, mitigate, and manage risk as opposed to having to non–renew or to exit the space is greatly appreciated.

So let's talk a little bit about what things a landscape maintenance company could do to maybe better protect, like I said, their business, their customer, the general public, and then ultimately you as theinsurance carrier to avoid being pulled into maybe an incident that really could have been avoided.

JF: I think there are two primary avenues that a landscape maintenance operator needs to carefully look at. Number one is anytime that operator has the opportunity to control the language in that maintenance agreement, that contract that makes clear who is responsible for injury on those premises from an unsafe condition. If you do not have the ability to control that language, for example, you're signing an agreement with a large property management firm or a municipality, keep in mind that the attorneys for those property owners have crafted the language so that claims on their premises can be transferred whenever possible to the vendors who are providing services for those premises. So knowing that number two is to put a procedure in place by which your maintenance crews are looking for unsafe conditions and reporting those.

And a good procedure would include perhaps taking photographs using their cell phones. Let's say for example of a heaved bit of walkway from a tree root. That photo goes into the office. Somebody in the office is then responsible for including the images in a quick narrative to the property owner that, “Hey, want to notify you, we've found this unsafe condition, somebody could trip and injure themselves, we recommend that you repair that unsafe condition as soon as possible.”

And then keep a record of that notice. And perhaps even once a year if that condition goes un-remedied, re-notify on a periodic basis. This way, when somebody does trip and fall and they break a bone and they call a personal injury attorney and that attorney sues the property owner, the insurance company for that property owner is going to try to transfer that claim to the landscape maintenance company's insurance.

If you've got documentation that shows you notified a property owner of the unsafe condition, you're now kind of off the hook and it is back in the property owner's liability because they were the ones negligent that even when told by you that they had an unsafe condition they did not remedy it. So the key is to inspect and report and retain those notices to ensure that these sorts of claims won't end up with your insurer and ultimately result in either the non -renewal of your insurance or the raising of your rates.

DG: Very clear and very simply put I don't think another question could probe any more information that our audience would need in that scenario. But if I can quickly recap to see if I've got this right, so we're focused on our contracts and whether that's something that we're imposing to our customer or the customer's imposing a contract on us, review that language and push back where appropriate. And then once you're in contract and maintaining a property, there needs to be some level of you know reporting and documenting potential hazards that are on that property that probably coincide with your scope of work and then, you know, reporting that to the property manager building owner and then keeping record of that information for some time.

I think today there's so many different management systems that are now available to landscape companies so there could probably be a workflow created within one of those systems already and if it's something that you don't have access to a management system. And like you mentioned, John, we've all got cell phones. Is there the ability just to snap a quick picture, send it to your supervisor? I mean, it doesn't have to be, I guess, as daunting of a task as people might think initially. And again, this is to hopefully better protect your business, protect your customer, your insurance carrier, and the general public. If there's an issue on a property, we're trying to avoid injuries at all cost for everybody and so I think not only are you providing resources and tools for the landscape industry to better manage your own risk but in turn you're creating safer properties and hopefully minimizing the overall amount of activity that can that can happen. And is there anything that you would you would want to add to, this or do you feel like we've covered it pretty well?

JF: I would just offer that the audience of landscape maintenance contractors understands the level of severity of these claims. Let me give you a couple of quick examples. Person trips on a raised piece of walkway, the person falls, breaks their fall with their hand and breaks their wrist. The wrist is a typical break that requires surgical intervention. That type of claim today is being settled for several hundred thousand dollars.

We've seen broken ankles where somebody steps into a depression or a hole in the grassy area. A broken ankle these days, that settlement will be several hundred thousand dollars. So there's never been a more important time to make sure that if you've signed a contract where you are going to be responsible for inspecting and reporting unsafe conditions, make sure that you have a procedure in place to do that to protect your insurance program for the future.

DG: You can kind of put into perspective like that. I think it helps our audience better understand the severity that's out there and how unpredictable that can be from the carrier standpoint in terms of when do I know this is coming in and do I have enough premium to offset that issue?

And I could see that's a challenge that your team is faced with and this is the reason why you're going to be looking for things like this that are going to elevate the landscape businesses overall risk management program and then in turn maybe there's opportunity to support a policy for them or work with them to some regard.

JF: Absolutely. And I would add that, you know, many of the types of repairs or service levels needed can actually create revenue for the landscape maintenance operator, be it the trimming of tree limbs or the removal of tree roots coming up in a grassy area that people could trip over. Irrigation systems that maybe need a little redesign because they're putting too much water on a street or a walkway, making that slippery. There's a number of things that the landscape contractor can actually get involved in and providing estimates to take care of these things. And there are other things like masonry work, paving, or maybe that's not something the contractor can do. They'd need to have the property owner find another subcontractor for that. But those are all opportunities and at the same time keeping your insurance program intact.

DG: John really well said we appreciate the time, the insight from your perspective is so critical right now for our customers but for the landscape industry in general and I think there's going to be a lot of takeaways from our audience today based on the information that you shared so we really appreciate you partnering up with the landscape industry and being here for us to share this information so everybody's in a better spot.

JF: Well, thank you, Drew. Appreciate having an opportunity to chat with your audience. And I'll just put in a little plug for Rancho Mesa. You guys are one of our very finest insurance agency partners. And we appreciate everything you do. Thank you.

DG: We appreciate that, John. Thank you so much.

Evolution of Exterior Insulation and Finish Systems in California

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

Exterior Insulation and Finish Systems (EIFS) has been around since 1969 and has grown in demand for new construction in California with a constant push to get closer to “net-zero” buildings. With our strong niche in plastering, drywall and painting contractors in California, one of the most frequently asked questions by insurance carrier underwriters pertains to whether a contractor self-performs or subcontracts out EIFS work. This has become a significant concern for insurers, particularly when it comes to the proper installation of drainage systems over wood-framed buildings and/or the use of inferior materials. Over the past decade, there have been significant strides to insulate contractors from claims arising from EIFS.

The major turning point for EIFS occurred during the 1995 hurricane season in North Carolina, when an increase in insurance claims highlighted the risks associated with improper drainage systems in EIFS installations (i.e. walls and ceilings). These claims prompted a dramatic shift in the way EIFS systems were installed and regulated moving forward. In response to these challenges, the industry made considerable strides to enhance moisture control, seismic resilience, and the use of materials that are better suited to California’s diverse climates—ranging from dry desert conditions to coastal, humid areas.

California’s building energy efficiency standards continue to evolve. As these standards become more rigorous, it is expected that EIFS will play an even larger role in meeting the energy demands of new buildings. The insulation provided by EIFS systems makes them a critical component of energy-efficient design, helping buildings achieve net-zero energy performance while still having curb appeal.

It is likely that EIFS will become a requirement for most, if not all, new construction projects in California in the near future. However, despite the system’s growing importance, many insurance carriers still view EIFS installations with caution, due to the historical challenges and claims associated with improper installation techniques. As a result, some insurers continue to treat EIFS as a “high-risk” exposure and require stand-alone policies to cover the potential risks.

Currently, there are approximately 7,660 plastering professionals employed in California, according to the most recent data from the Bureau of Labor Statistics (BLS.gov). However, only a small fraction of these employees are actively involved with EIFS installations. This limited exposure has contributed to a gap in the insurance market, with many carriers potentially lacking a deep understanding of the evolving EIFS industry and its improvements.

For plastering contractors in California, working with a knowledgeable broker is crucial to navigating the complexities of insuring EIFS work. Each company’s exposure to EIFS risk is unique, and it is essential to have a broker who understands these nuances. A specialized broker can help secure the most competitive pricing available and ensure that they are paired with insurance carriers that are not only familiar with the latest industry advancements but are also willing to offer comprehensive coverage for EIFS-related risks.

While industry change can take time, it is vital to have a broker who actively advocates on your behalf, challenging insurers’ outdated guidelines and promoting an accurate understanding of the current EIFS landscape. By building strong relationships with insurers who understand the evolving nature of EIFS, contractors can improve their risk management profiles and position themselves for long-term success.

If you have any questions relating to EIFS or any other insurance needs you may have, do not hesitate to reach out to me directly at ccraig@ranchomesa.com or you can call (619) 251-8278.

Keeping Drivers Safe with Proper Training and Vehicle Inspections

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

April is Distracted Driver Awareness Month, marking a perfect time to revisit your company’s driver training policies. Motor vehicle safety in the workplace is essential to protect employees from injury while limiting costs for the company. The Occupational Safety and Health Administration (OSHA) reports 39% of all fatal workplace injuries are caused by transportation incidents. Additionally, the Network of Employers for Traffic Safety (NETS) found that an on-the-job highway crash costs employers an average of $26,000, and an injury costs the employer nearly $80,000 on average. With these statistics in mind, it should be a top priority of all employers to implement a driver and fleet safety program.

Driver safety training should be administered regularly to all employees who are expected to drive as part of their job. Consistent retraining during the year can help keep safe driving tactics top-of-mind and prevent complacency.

OSHA recommends driver training to include:

• Vehicle characteristics, capabilities, and limitations

• Vehicle instruments, controls, and safety components

• Vehicle preventative maintenance checks and services

• Company driving policies and procedures - seat belts, distractions (including drowsy and impaired driving), aggressive driving and speeding

• Defensive Driving

• Vehicle Backing

Rancho Mesa offers a number of driver training courses through the SafetyOne™ platform, including Driving Safety, Distracted Driving, and Driving Defensively.

In addition to driver safety, vehicle maintenance is also an important step in protecting your employees and other drivers. Regular maintenance and inspections play a vital role in employee safety. Drivers should always conduct pre- and post-trip vehicle inspections and document any deficiencies. Defective vehicles should be removed from service until the issue is repaired. OSHA lists the areas of the vehicle that should be inspected before and after each drive, they include:

• Brakes/brake systems

• Tires – including air pressure

• Wheels, fasteners, and hubs

• Lights and signals

• Steering functions

• Fuel and exhaust system

• Fluid levels

• Windows and mirrors – clear view

• Emergency equipment and safety devices

• Cargo securement – if applicable

• Flatbed trailer fall protection systems – if applicable

Rancho Mesa’s Fleet Safety training, available through SafetyOne™, can improve a driver’s understanding of what is required of them before, during, and after their drive.

For additional information on how Rancho Mesa can help your company develop a fleet safety program, register for the Building A Fleet Safety Program with Rancho Mesa's Tools & Resources webinar on Friday, April 18, 2025.

The Crucial Role of Third-Party EPLI Coverage for Tree Care Companies

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

Operating a tree care business comes with numerous risks, from ensuring your team’s safety on the job to managing potential property damage. One crucial area of risk that is often overlooked is Employment Practices Liability Insurance (EPLI), specifically third-party coverage. Third-party EPLI can help protect your business from expensive lawsuits, making it essential for businesses that regularly interact with the public.

EPLI Coverage

EPLI is an insurance policy designed to protect businesses from claims related to employment practices. This includes allegations of discrimination, harassment, wrongful termination, and other workplace-related issues brought forth by employees. For many companies, EPLI is vital for covering the costs of defending against lawsuits, including legal fees, settlements, and damages.

While traditional EPLI coverage protects your business against employee claims, it is important to also consider third-party EPLI coverage.

Third-Party EPLI Coverage

Third-party EPLI coverage extends the protection of your EPLI policy beyond your employees. This provides an extra layer of protection for claims made by non-employees, such as customers, vendors, and members of the public. It covers allegations made by non-employees who may claim they were subject to harassment, discrimination, or wrongful conduct by your employees while interacting with your business. In the tree care industry, where workers frequently engage with clients, contractors, and the general public, this type of coverage is important.

Examples of Third-Party EPLI Claims in Tree Care

• Harassment Allegation from a Homeowner. A tree care crew is performing work on a residential property when a homeowner accuses one of the employees of making inappropriate comments or gestures. The homeowner files a lawsuit for emotional distress, potentially resulting in costly legal fees.

• Inappropriate Behavior from an Arborist in a Bucket Truck. While performing tree pruning, an arborist in a bucket truck sees a woman through a window who appears to be changing clothes. The woman later claims the arborist was staring at her inappropriately and files a harassment lawsuit against the tree care company. Even if the arborist did not intend any harm, this type of situation can lead to legal action and unnecessary costs.

Reasons Third-Party EPLI Coverage Is Essential for Tree Care Companies

• High Interaction with the Public. Arborists and tree care crews often work in public spaces or on residential and commercial properties where they have frequent contact with non-employees, increasing the likelihood of third-party claims.

• Legal Defense Costs. The costs of legal defense can add up quickly, whether or not your business is found liable. Third-party EPLI coverage can help offset these costs, preventing them from becoming a financial burden on your company.

EPLI Policy

• Third-Party Coverage. Not all EPLI policies automatically cover claims made by non-employees. Be sure to confirm that third-party protection is included.

• Defense Cost Outside Limit. If defense costs are deducted from the liability limit, they can quickly deplete your coverage, leaving less available for a settlement or judgment. It is crucial to look for a policy that offers defense costs outside the limit, ensuring that your liability coverage remains intact and fully available in the event of a claim.

Third-party EPLI coverage is an essential safeguard for tree care businesses, providing protection against claims made by non-employees such as homeowners, pedestrians, or subcontractors. With the high level of public interaction in this industry, the potential for costly lawsuits is significant. Ensuring your EPLI policy includes third-party coverage and defense costs outside the liability limit can help protect your business from unexpected legal and financial burdens.

To learn more about how EPLI insurance can protect your company, contact me at (619) 486-6437 or randerson@ranchomesa.com.

Contractors’ Guide to Navigating Cybersecurity Maturity Model Certification

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

In true government fashion, the Cybersecurity Maturity Model Certification requirement, more commonly referred to as CMMC, is a mouthful!  While most companies are familiar with or are working on compliance with this requirement by now, we felt it was appropriate to share the history of this certification with our audience.

I have enlisted the help of a long-time friend and trusted resource of mine, Mandy Irvine, founder and CEO of Hoop 5 Networks - IT and Cybersecurity Solutions. As experts in this field, she and Russell Emig, Hoop 5’s Certified Chief Information Security Officer have provided much of the following information.

Why Did CMMC Became A Requirement?

The CMMC framework was born out of the need to protect sensitive information within the U.S. Department of Defense’s (DoD) supply chain. Historically, the DoD relied on a set of cybersecurity requirements embedded within the Defense Federal Acquisition Regulation Supplement (DFARS). However, rising cyber threats and increasingly sophisticated attacks against defense contractors highlighted the inadequacy of those measures.

Evolving Threat Landscape. Over time, cyber-attacks grew more frequent and severe, targeting companies that managed Controlled Unclassified Information (CUI). The traditional self-attestation model for cybersecurity controls proved insufficient.

Unified Standard. CMMC was introduced as a unified framework to ensure that every organization within the defense industrial base meets a baseline of cybersecurity practices. This move helps safeguard not only government data but also the integrity of the broader supply chain.

Who Needs to Comply?

CMMC compliance is not reserved solely for technology companies; it extends to all entities within the defense industrial base.

Defense Contractors and Subcontractors. Any company that bids on or holds DoD contracts and handles CUI must comply with the relevant CMMC level.

Broader Business Ecosystem. This includes manufacturers, IT service providers, and even logistics firms that support the DoD. Essentially, if your organization is part of the defense supply chain, CMMC compliance is on the horizon.

The framework is structured into multiple tiers, ensuring that each organization implements security practices appropriate to the sensitivity of the data it handles.

What to Expect Regarding Compliance

Preparing for CMMC certification involves a structured process that may require substantial changes to an organization’s cybersecurity posture.

Assessment and Gap Analysis. Organizations typically begin with a thorough assessment of their current cybersecurity measures to identify gaps relative to CMMC standards.

Implementation of Controls. Depending on the required CMMC level, companies may need to implement a range of controls from basic cyber hygiene (like access control and incident response) to advanced measures for more sensitive data.

Third-Party Certification. For higher maturity levels, a formal assessment by an accredited third-party organization is necessary. This external validation ensures that the implemented controls are effective and align with DoD requirements.

Operational Impact. Beyond technology, compliance may affect business processes, training programs, and even contractual relationships. Preparing for CMMC is an investment in the future stability and credibility of your business within the defense sector.

Consequences of Non-Compliance

Failing to meet CMMC standards can have far-reaching consequences for companies involved in the defense supply chain.

Loss of Contracts. The most immediate risk is exclusion from bidding on or maintaining DoD contracts. For many companies, this loss of business could be devastating.

Increased Cybersecurity Risk. Without adherence to robust cybersecurity practices, organizations are more vulnerable to breaches. A successful attack could lead to the compromise of sensitive data, resulting in financial losses, legal ramifications, and severe reputational damage.

Regulatory and Financial Penalties. Non-compliance may trigger increased scrutiny from federal regulators. Over time, this could result in additional sanctions or penalties, further straining business operations.

CMMC represents a significant shift in how the defense industrial base approaches cybersecurity. Its history is rooted in the necessity to counter a landscape of evolving threats, and its requirements extend to a wide array of businesses involved with the DoD. Preparing for compliance is a comprehensive process that, while challenging, is essential for securing contracts and protecting critical data. Conversely, the risks of non-compliance underscore the importance of investing in robust cybersecurity measures.

Understanding the intricacies of CMMC will be crucial for organizations looking to secure their place in the future of defense contracting.

For questions about the CMMC, contact the team at Hoop 5. They are ready to be of assistance and support if needed.

A Hardening Insurance Market for Non-Profits-Steps to Prepare for the 2025 Renewal Process

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

Non-profit and human services leaders started experiencing a hardening property and casualty insurance market in 2024 illustrated by reduced limits of liability, higher deductibles, and increased premiums. And, the market shift still may not have been enough to right the ship.

According to Insurancebusinessmag.com, reinsurers are seeking double digit increases in 2025 due to rising claim costs. Behind these rising claims costs are social inflation, emerging risks (i.e., opioid and synthetic chemicals), reserve increases, litigation funding and no promising tort reform. Reinsurers also argue that 2024 rate hikes were insufficient. As a result, these companies are reducing exposure to the US casualty market.

When reinsurers sneeze, the insurance market and its insurers catch a cold. In 2025, expect more signs of the hardening market. However, there are steps non-profit leaders can do to prepare for the renewal process in 2025.

Anticipate Premium Increases

Consider the organization’s growth in all rating factors, whether it be revenue, employee count, vehicles, or beds. Premium will increase accordingly before rate increases.

Complete Full Insurance Applications

An experienced insurance agent will ask clients to update applications in hard copy, using electronic documents, or via an online portal. If this is not happening, ask why. If it is happening, then complete the full version rather than truncated renewal applications. Creating competition in the marketplace means providing underwriters a full scope and understanding of operations. Very few underwriters will quote using another carrier’s renewal updates.

Review Contract Insurance Requirements

Many carriers are reducing limits of liability for abuse/molestation and professional liability. Others will no longer quote umbrella or excess liability. Stacking quotes from various carriers to achieve once readily attainable limits is possible, but this strategy comes with a significant premium cost. So, before stacking policies, review contracts with counties, regional centers, and funders to understand the required insurance coverage.

Engage with Partners Now

Communicate to organization partners the cost to maintain required insurance limits. Take a hard look at current programs to determine if outcomes (i.e., revenue and impact) warrant the increased insurance costs. Some programs may need to sunset.

A continuing hardening insurance market in 2025 will force non-profit and human services leaders to approach the renewal process with care and new focus. The recommended steps listed above will help organization leaders develop a renewal strategy while helping underwriters’ analysis prior to releasing quotes.

For more information about the hardening market, contact me at sbrown@ranchomesa.com or (619) 937-0175.

Step Up Your Safety: Essential Ladder Topics for National Ladder Safety Month

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

March is national ladder safety month. While worker safety should be a priority all year long, this month is a reminder of the dangers associated with ladders in the workplace. The Occupational Safety and Health Administration (OSHA) reports falls are a leading cause of death in the construction industry. A fall prevention plan and thorough ladder safety training can help protect workers from injury and prevent fatalities.

Following a few basic ladder safety rules can also ensure a safer work environment.

1. Choose the right ladder for the job

Make sure you are using the appropriate ladder for the task at hand. The ladder will need to be able to support the weight of anyone using it, plus the added weight of tools and materials. The ladder must also be tall enough so that a person can work from it without climbing onto the top three feet.

2. Thoroughly inspect the ladder before use

Before using the ladder, ensure there is no damage or missing parts. All bolts, screws, and hinges should be secure and there should be no broken or damaged rungs. The rungs or steps of a ladder should be clean of any oil, grease, or paint to prevent slips while climbing. If there is any damage to the ladder, it should not be used for work.

3. Set up the ladder in a safe area

It’s important to place your ladder on a level surface and away from any electrical wiring. If working in an area where people might be walking by, create a barrier around the base of the ladder to redirect traffic. If the ladder is placed in front of or near a door, block off the door. Be sure to keep ladders at least 10 feet away from power lines.

4. Exercise caution when using a ladder

Be sure to maintain three-point contact when using a ladder; you should never have more than one hand or foot off the ladder at any time. When using the ladder, do not lean over the side railings or move or extend the ladder while a person is on it. Use a tool belt to carry equipment so that your hands are free at all times when ascending and descending.

Regular training for employees and frequent ladder inspections can help reduce the risk of any falls or injuries and ensure workers are prepared for ladder use on a jobsite. Rancho Mesa clients can utilize SafetyOne’s Ladder Safety online training, and the mobile app’s built-in ladder observation to document inspections, any issues that are found and corrective actions.

 Toolbox talks for ladder safety, proper usage, types of ladders, and more are available through the SafetyOne™ platform and can be used to train workers on safe ladder use.

For more information, register today for Rancho Mesa’s ladder safety workshop at our Mission Valley office in San Diego, CA on March 21st, 2025

4 Steps to Ensure I-9 Compliance and Prepare for an Audit

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

The Trump administration has placed a strong emphasis on immigration policy. Significant changes to employment-based immigration and work authorization are anticipated to take effect within the next four years. For employers, this means I-9 compliance should be a top priority in order to avoid costly fines.

All employers in the United States are required to complete and maintain Form I-9 for each employee as proof of work authorization status. Businesses can be audited for I-9 compliance at any time. If your business is selected for an audit, you will have three days to provide documentation to U.S. Immigration and Customs Enforcement (ICE) inspectors.

Implement these four steps to ensure your business is in compliance before an audit takes place:

1. Complete I-9 forms for all employees

Documentation is required from both employees and employers. Employees should provide employers with proper documentation and proof of work authorization. Section 1 of Form I-9 will need to be completed by the employee. Employers will need to verify the validity of those documents and enter necessary information into the employer’s own records, in Section 2 and Supplement B of Form I-9.

Rancho Mesa clients can access additional guidance for completing the Form I-9 in the RM365 HRAdvantage™ portal to ensure record-keeping compliance.

2. Conduct an internal audit

Conducting an internal audit can help catch any errors before a formal audit occurs. Depending on the size of your business, you may want to audit all employee I-9 records, or for really large companies, just audit a portion of your records. Check for any errors or omissions in I-9 forms, ensure all forms are compliant with current Form I-9 requirements, and dispose of any expired I-9 forms. Regular internal audits can help ensure your business is prepared in the event of an official audit.

3. Correct any I-9 errors

If you do find any errors through an internal audit, be sure to correct them right away. To correct Form I-9 in accordance with U.S. Citizenship and Immigration Services (USCIS) guidelines simply:

• Draw a line through the incorrect information

• Enter the correct information

• Initial and date the correction

Errors made in Section 1 must be corrected by the employee, and errors made in Section 2 or Subsection B will need to be corrected by the employer.

4. Store I-9 forms and related documents in a secure location

I-9 forms contain sensitive information and should be kept in a safe and secure location. USCIS requires I-9 forms for each employee must be kept by an employer “for three years after the date of hire, or one year after the date employment ends, whichever is later.”

If an audit conducted by ICE does find your business to be in violation of I-9 requirements an employer could face fines worth tens of thousands of dollars. Repeat violations could also lead to criminal charges.

For questions about keeping your business in compliance with Form I-9 requirements, use the RM365 HRAdvantage™ portal to contact an HR expert.

Creating a Standard Operating Procedure for Work-Related Incidents

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

In order to improve a process, there needs to be a baseline. When it comes to tracking, reporting, and following through on a work-related incident, injury or illness, creating a standard operating procedure (SOP) sets the foundation.

Flow charts can help all stakeholders better visualize the process and show potential next steps based on yes/no questions. This type of operating procedure also shows the duties and obligations for the individual employee, supervisor, human resources personnel and safety manager that is involved.

This process will ensure your employee receives the timely care they need based on the particular circumstances and provide your staff the confidence that they are accurately handling the situation.

Other areas to consider within this work flow can be:

• OSHA reporting requirements

• OSHA recordkeeping

• Initial incident report

• Supervisor’s report

• Witness statements

• State-specific requirements

• Follow up reports to address the root cause and prevent similar incidents from occurring in the future.

Standardizing your injury reporting protocol is the first step to getting the appropriate care, minimizing the incident’s claim impact, and providing you training opportunities to reduce the risk of a similar claim reoccurring. As your business continues to evolve and grow, it is critical that you establish a protocol as your foundation and continue to fine tune it as new departments are created or areas for improvement are observed.

Controlling Auto Insurance Costs for Plumbers and HVAC Contractors

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

Like most businesses, vehicles are an essential part of a plumbing or HVAC contractor’s operations. Whether the focus of their business is service and repair, tenant improvements, installation, or new construction, company leaders depend on trucks, vans, and cars to get their people, equipment, and materials safely to the jobsite.

Unfortunately, the cost to insure those vehicles has increased dramatically over recent years and there appears to be no imminent sign that trend will change.

According to AM Best, the U.S. commercial auto insurance segment sustained a $5 billion net loss in 2023. While it is still too early to know how the auto segment performed in 2024, early indications from the first half of the year showed further deterioration, marking the 12th straight year of net underwriting losses for auto insurers.

There are multiple reasons for the increase in auto losses. Distracted driving is contributing to an increase in the frequency of automobile accidents, while social inflation and third party litigation funding are amplifying the severity of associated losses. As all of these causes will continue to negatively affect the auto insurance marketplace broadly, avoiding auto accidents becomes increasingly more important for individual companies in controlling auto insurance costs.

While there are many factors that can lead to an auto accident, businesses can benefit from focusing on those within their control. Implementing or enhancing a fleet safety program with clear, actionable policies will better equip drivers to avoid accidents. Consider how your fleet safety program handles the following:

• Driver selection, qualification, and performance management. Establish clear written guidelines on who is eligible to drive and how their driving performance is evaluated. This may include policies such as requiring an applicant to provide their motor vehicle record as part of the interview or hiring process, participation in the Employer DMV Pull Notice program, incentives for safe driving, and responses to unsafe driving practices, near misses, tickets, or at fault accidents.

• Safety rules, vehicle use, and operating procedures. Define how and when drivers are allowed to operate vehicles. This should include policies that address use of cell phones and hands-free devices, impaired driving, personal use of company vehicles, company use of personal vehicles, passengers, seatbelt use, and speeding, among others.

• Driver training. Provide ongoing training for employees to understand their responsibilities as drivers and the risks that are present on the road. This could include in-person or video trainings that discuss topics like defensive driving, distracted driving, safe following distance, and driving in inclement weather. Having potential drivers successfully complete an in-person driving test in a controlled environment before getting on the road, as well as annual driving tests can also help reduce the likelihood of an accident.

  Learning management systems like Rancho Mesa’s proprietary SafetyOne™ platform can offer effective and convenient online trainings to ensure your drivers are knowledgeable and well equipped to drive for your company.

• Vehicle maintenance and inspection. Schedule and document routine maintenance tasks like oil changes, tire rotations, and brake inspections to help keep vehicles running smoothly. Implementing a daily vehicle inspection for items like active turn signals, working headlights and brake lights, and tire pressure reinforces the importance of safety to your drivers, while also proactively minimizing the risk of a dangerous maintenance issue that could lead to an accident.

Providing an easy way for your drivers to document and report their daily vehicle inspections and maintenance issues can increase the likelihood of compliance. Try one of our QR code-enabled Driver Vehicle Inspection Report (DVIR) to see just how simple it can be to document and report mechanical or safety issues with your fleet.

In addition to a robust fleet safety program, there are other tools and strategies that can be leveraged to provide savings in a challenging insurance marketplace, without sacrificing coverage.

To discuss these tools and strategies or for a complimentary review of your current fleet safety program and insurance program, contact me at (619) 486-6554 or mgorham@ranchomesa.com.

SB 428: Expanding California’s Workplace Violence Restraining Order Law to Protect Against Harassment

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

A new California law expands the state’s protections around workplace violence restraining orders.

Beginning January 1, 2025, employers were given the right to seek a temporary restraining order on behalf of an employee who has suffered harassment in the workplace. California State Senate Bill 428 (SB 428) was authored by Senator Catherine Blakespear and signed into law by Governor Gavin Newsom.

Existing state law allows employers to seek a temporary restraining order against a person who has perpetrated acts of violence in the workplace or has made credible threats of workplace violence. SB 428 expands those protections to allow employers to seek a temporary restraining order against a person who has harassed their employee(s), before harassment escalates to violence or threats of violence.

Individuals can also seek a restraining order against harassment for themselves.

The text of the bill defines harassment as, “a series of acts over a period of time, however short, evidencing a continuity of purpose, including following or stalking an employee to or from the place of work; entering the workplace; following an employee during hours of employment; making telephone calls to an employee; or sending correspondence to an employee by any means, including, but not limited to, the use of the public or private mails, interoffice mail, facsimile, or computer email.”

If an employer does request a temporary restraining order, and that order is granted by a judge, SB 428 states that the order will remain in effect for up to 21 days.

If the perpetrator of the harassment—otherwise known as the “respondent”—is also an employee of the same company that is requesting the temporary restraining order, a hearing will be held, “concerning the employers’ decision to retain, terminate, or otherwise discipline the respondent.”

If the respondent is determined to have been engaged in unlawful harassment, a restraining order may be issued with a duration of up to three years and the employer can request a renewal, “any time within the three months before the expiration of the order.”

However, the law does not allow employers to seek temporary restraining orders for any behavior or speech that is “constitutionally protected, or otherwise protected by Section 527.3 or any other provision of law.”

Rancho Mesa has a number of resources that can help protect your company and employees from workplace violence. Harassment prevention training, workplace violence training, and workplace violence policies can be found on the RM365 HRAdvantage™ portal.

Beyond a Single Bond: How We Help Contractors Stay Ahead of Their Surety Needs

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

We recently issued a very large bond for one of our contractor clients which prompted a discussion during the underwriting process about potentially moving their account to a surety carrier with a larger capacity. However, after enjoying a seven-year relationship with the current bond company and receiving an early indication that they could support the larger bond request, this provided us with an initial understanding that we might be okay staying with the current carrier.

Most bond companies will provide their agency partners, like Rancho Mesa, with a range of support for their typical bond programs. For example, they may indicate they are looking to support established contractors with single bonds up to $40,000,000 range and work programs up to the $80,000,000 range with the caveat that they can go higher for specific accounts.

So, once we had the initial indication, the next step was to talk to our contractor client about the potential size of their future projects that might require bonding over the next few months. Based on that discussion, we realized it was actually time to find a bond company with much larger capacity to fit our client’s future needs. So, the discussion turned from support for this particular large bond to ensuring we had support for larger capacity both today and in the future.

We successfully placed the contractor with a larger carrier by focusing on really understanding the client’s business over the long term instead of just considering a particular bond at a particular time. The additional communication was key. 

If you would like more information about ways to ensure you are placed with the best bond company to fit your needs, please contact me at (619) 937-0165 or mgaynor@ranchomesa.com.

Updates to California Sick Pay and PTO in 2025

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Beginning on January 1, 2025, changes to California paid sick leave and paid family leave took effect in California.

Use of Paid Sick Leave Expanded

The use of paid sick leave has been expanded to cover additional reasons for absence including:

• Jury duty

• Appearance in court under a court order as a witness in a judicial proceeding

• Any reason covered under the victim leave law, if the employee or their family member is a victim of any qualifying act of violence (QAOV)

Additionally, agricultural workers whose job description requires them to work outside may use paid sick leave to avoid unsafe smoke, heat, or flooding conditions.

To ensure your business is in compliance with these new requirements, update your paid sick leave policy to include these new uses.

Use of Paid Family Leave Requirements Changed

The requirements for an employee to use paid family leave have also been updated. Employers can no longer require employees to use up to two weeks of accrued, unused vacation time before they are able to receive Paid Family Leave (PFL) from the state.

Employers should update family leave policies to remove any requirement that employees must use accrued vacation time before receiving PFL benefits on or after January 1.

Changes to paid sick leave and Paid Family Leave policies can be made through Rancho Mesa’s RM365 HRAdvantage™ portal by utilizing the Company Policies/Handbooks feature.

For more information on other important changes to California employment law, register for Rancho Mesa’s 2025 Employment Law Update webinar.

Cal/OSHA’s COVID-19 Prevention Non-Emergency Standards End, Employers Still Required to Document COVID-19 Cases

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

February 3, 2025 marked the end of the California Division of Occupational Safety and Health (Cal/OSHA) COVID-19 Prevention Non-Emergency Standards.

However, while California employers are no longer required to follow any regulatory requirements, COVID-19 reporting and recordkeeping requirements (Title 8 Subsection 3205(j)) remain effect until February 3, 2026. The requirements specify that the employer must:

Keep a record of all employee COVID-19 cases.

These records should include the employee’s name, contact information, occupation, location where the employee worked, the date of the last day at the workplace, and the date of the positive COVID-19 test and/or COVID-19 diagnosis

These records must be kept for two years “beyond the period in which the record is necessary to meet the requirements of this section.”

Provide information on COVID-19 cases to all health and safety governing bodies when requested.

These records must be provided to the local health department that holds jurisdiction over the location of the workplace, the California Department of Public Health (CDPH), Cal/OSHA, and the National Institute for Occupational Safety and Health (NIOSH) immediately upon request and when required by law.

Although employers are no longer required to enforce a specific set of COVID-19 regulatory requirements, California employers must still adhere to state health and safety guidelines. These guidelines include:

• Maintaining a “safe and healthful” place of employment for all employees as required by Labor Code section 6400.

• Establishing, implementing, and maintaining an effective Injury and Illness Prevention Program (IIPP) as required by Title 8, California Code of Regulations, section 3203.

• Identifying, evaluating, and correcting any and all unsafe or unhealthy conditions, practices, or procedures associated with COVID-19 if COVID-19 is identified as a workplace hazard.

A COVID Resources Toolkit is available through Rancho Mesa’s RM365 HRAdvantage™ portal.

More information can be found on Cal/OSHA’s COVID-19 Guidance and Resources webpage.

Group Captives May Be Contractors’ Solution to Rising Insurance Premiums

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

Over the last few years, contractors have started to see rate increases on multiple lines of coverage within their insurance program. And, the difficulty insurance companies are having in the property market, especially here in California with the wildfire risk, has been pretty well publicized. We have seen both homeowners and commercial landlords forced away from the standard property market and into surplus lines, or, worst case scenario, the California Fair Plan. We are also seeing commercial auto policies come under pressure due to increases in litigation, costs to repair vehicles and social inflation. 

Believe it or not, workers’ compensation has been the lone outlier from these increases, until now.  In the last 6 months, we have started to see a shift in the market. Carriers’ combined ratios have been steadily creeping up and underwriters are cutting back on the amount of schedule credits they can apply.

As a result of the premium increases felt across the board, one alternative risk financing strategy contractors may want to consider is a member-owned group captive.

A member-owned group captive is an insurance company owned and operated by the captive members, strictly for the benefit of those members. This structure enables middle market companies the ability to increase their underwriting credibility through the collective purchasing power of the group. These groups can be related (what we call homogeneous like a trade group or association), or unrelated (which would be a heterogeneous group which could be companies similar in size).

There are real advantages of a group captive, like:

• Lower insurance costs over time

• Financial incentives for strong loss control

• Increased control over claims management

• Investment income

Who should consider a group captive?

• Companies that have shown long term financial strength

• Owners who are committed to safety and have strong safety programs in place

• Loss histories or experience modification rates that are significantly better than average in their respective trade

• Annual premiums of $150K or more for workers’ compensation and commercial auto

As we see the workers’ compensation market continue to harden, best-in-class contractors who are looking to control their costs and protect their bottom line may want to consider this alternative risk financing strategy. 

If you would like to learn more about captives, contact me at sclatyon@ranchomesa.com or (619) 937-0167.

Non-Owned Auto Can Be A Janitorial Company’s Hidden Nightmare

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

It is common for employees of janitorial companies to drive their own vehicles, whether that is driving to various jobsites, transporting cleaning supplies, or simply running errands. For the janitorial company, this creates what is referred to as a non-owned auto exposure.

Often overlooked, non-owned auto liability arises when a business is held responsible for accidents caused by employees driving their personal vehicles while performing duties in the course of employment.

As inflation and nuclear verdicts drive up costs of individual auto liability claims, employers must be concerned not only with company-owned vehicles, but their employees’ vehicles being used on company time. If an employee causes an accident while driving their personal vehicle while on the clock, the injured parties may file claims against both the employee’s personal auto insurance and their employer.

To protect your company from non-owned auto liability, it is recommended that companies have an updated fleet safety program that includes the following:

• Employees using their personal vehicles on company time should be required to provide a copy of their MVR. It is critical that the employee’s MVR meets the same parameters as those driving company-owned vehicles.

• Employees who drive company and/or personal vehicles should be required to participate in the DMV Pull Program. This way, if an employee received a major moving violation (e.g., reckless driving, DUI, etc.), the company will be alerted.

• Require all company drivers who drive non-owned vehicles to purchase personal liability coverage. That way, damages of a claim are less likely to exceed the personal auto liability limit and fall on to the employer’s commercial auto liability policy. It is also recommended that employers require their drivers to purchase minimum limits of $300,000.

• Make sure the employee completes routine maintenance as per the car’s manufacturer on their personal vehicle, such as oil changes, tire checks, windshield wiper replacements, etc. This is just as critical as a maintenance program for company-owned vehicles.

• Provide regular fleet safety training to all employees driving company and personal vehicles during business hours.

• Finally, business owners may want to encourage employees to use safety features such as apps that prevent the driver from using their phone while the vehicle is in motion.

Janitorial businesses, in general, have a large non-owned auto exposure that can often be overlooked and leave a business vulnerable to high dollar auto claims, which can result in policy non-renewal and/or increased premiums.

Now is the time to review your current program’s policies and procedures with your insurance broker and make any adjustments necessary.

If you need any assistance reviewing your current program or have any questions, please feel free to contact me at (619) 937-0174 or jhoolihan@ranchomesa.com.  

Risk Management and Contract Strategies to Protect Your Landscape Business

In this second episode of a special two-part series, Landscape Group Vice President Drew Garcia, is joined by Josh Ferguson, attorney with Freeman Mathis & Gary, to discuss contract strategies and risk mitigation for slip and fall incidents.

Drew Garcia: Welcome back everybody. I'm Drew Garcia, Vice President and Landscape Group Leader here at Rancho Mesa. Today we have a great opportunity to connect with Josh Ferguson from Freeman, Mathis and Gary. Josh and I had a chance to get to know each other over the last couple of years through different trade associations. Josh has a big focus on the landscape and snow contracting community. Josh, welcome to the show.

Josh Ferguson: Yeah, thanks for having I appreciate it.

DG: All right, Josh. So we're going to jump into some things that are kind of current and news and noteworthy right now for primarily landscape operators. So primary, you know, customer is going to be community associations, commercial properties that could be hotels, could be shopping centers, municipalities doing city work. I know each customer might have different needs in terms of how those contracts might need to be set up. But some things that we're seeing on the slip and fall, trip and fall side, want to talk a little bit about if you're seeing that same kind of activity and what are some things that the contractors could be doing to help, not only just prevent them from happening, but if something comes in, what's that supporting documentation that might help your insurance carrier or you when you're going through an incident like that?

And then also talking about this commercial auto market, you know, a lot of the insurance carriers, this has been an issue for a really long time and they're trying to raise rates fast enough to be able to cover the losses that are in the past and they're looking out into the future and it's causing some significant increases and in some cases some non-renewals or some change in appetite and that can really hit landscape hard because these businesses are built with a lot of vehicles in mind and they got service areas that they've got to get to. So I want to talk a little bit about the commercial auto side and some things that maybe the landscape business should be considering. There's certainly technology out there that might be able to support them in some of those efforts, but let's jump first into the slip, trip, and fall type of scenarios that can happen on properties and maybe talk a little bit about trying to defer or shed some of that liability through the contract and you know calling out scope and everything like that that might help build a better case for the landscape company in the event something like that occurs.

JF: Sure, and what you said to start with I think is right on we are also seeing an uptick in volume of claims relative to trip or slip and falls involving landscape contractors getting brought or dragged into those lawsuits. And part of the reason we think they're getting dragged in based on the claims we're seeing and the conversations I'm having is from really broad contract language that is things like monitor and inspecting provisions or maybe unclear terms as to what the landscape or hardscape services are actually to be. The broader or more ambiguous those terms are, the more a property owner or property manager when they get sued can have their attorney go through the rolodex of vendors they have on site, look through every vendor that has a really broad contract and bring in those contractors. So, in the same trip and fall on gravel, they may end up bringing one hardscape company, one landscape company, whoever dug up the piping or drainage on the property to get everybody involved, to make sure that they have the best chance of being protected. So, how we would combat that is again, make sure that the scope of services are really well defined to what you're actually going to do at the site, when you're going to do it, the timeframe you're going to do it, and then have some liability limiting language saying once you're done it, you have no duty to monitor inspector after and they deem that it's satisfactory work, again, to help protect you there.

DG: And if you're the landscape contractor and you already have maybe contracts in play and it's not a practice for you to revisit, you're listening to this now saying, “Shoot, I've already renewed a lot of my business or I'm working for people that I haven't looked at the contract in a couple of years, we just kind to continue to renew it.” What would be the cadence again on looking at those contracts and making sure they're up to speed and how would you go about getting that done so you feel confident that you're in a position where you're there to support the issue if the issue is a result of your work and you're not picking up more than you are anticipating?

JF: Sure. I think there's a two-part answer to that question. I think first and foremost, even if you've signed an agreement and you're in the middle of that period of time in which the agreement's valid, but you think something just isn't accurate or correct or it was when you signed it but they're not letting you do that, there is no reason you can't go to your client and say “This is actually not within our scope or you're no longer allowing us to do this, we should sign an addendum to this agreement confirming the actual obligations of the party.”

As an attorney, again, I want a 10 out of 10, and a 10 out of 10 would be those terms define what you're not supposed to be responsible for and everyone signs it. But even if it's just something where they acknowledge it by email, if then a claim arises relative to that issue, we've got something. We want—and by the global “we”, I mean you as a contractor, me as an attorney and your insurance company—we as a group want anything we can do to help protect you. And some things are better than others, but something is better than nothing. So first and foremost, I want to say that if you're listening to this and then know you signed a contract that's unfair, inaccurate, it doesn't mean you can't have those conversations. We can't guarantee the results, but I think it's worth that conversation.

And then if you did sign it and then you feel like there's nothing you can do about it, I would strongly suggest you revisit contract language on a yearly basis. Whether that's your base contract, you have folks sign or when you re-up with clients that you should look at on a routine basis. As an attorney who's done it for 20 years—and I review hundreds of contracts, especially in the late summer, early fall for snow and ice and then for maybe late winter, very early spring for landscapers—things come up that we had never talked about before. Things change in the industry or you as a contractor may change the type of services you perform. You may be a residential person and you're moving over to HOA or commercial, whatever it is. And then as a result, the language in your base agreement may need to be different. So I would strongly recommend doing it on a yearly basis.

DG: I'm nodding my head the whole time. I know this is just audio, but I'm just thinking of the past conversations with so many businesses and those are the things that come up. You know, everybody's an entrepreneur at heart when you own a business and that could create change No matter if that's with your customer base or a new service that you're offering and making sure that you're just covering your checks and balances in terms of how you're setting this up is important because at the end of the day you just want to make sure that you're supporting the business in the event there's an issue that, you know, comes against you and providing people like you the right information you need to defend.

And I would say the other key issue right now within the landscaping industry, primarily on the maintenance side; so when we've got fleet-driven businesses, commercial auto is at an all-time high in terms of so much scrutiny by the insurance carriers. And for a good reason, they've put out plenty of supporting information to show that they cannot collect enough premium to cover what seems to be the amount of claim cost that comes in. And in my experience with this, when I'm going through a renewal or if I'm talking to a landscape contractor about their business, and then ultimately get to that underwriting conversation. There's a lot of hesitancy right now with this class of business because of the amount of vehicles that they have. And they're really taking a deep dive into driver training, the ability to use things like GPS and dash cams, just as a way for driver behavior and training to that information. So it'll kind of open up that next category where I think originally maybe GPS was being used for routing purposes and then idling and fuel cost, but if you're seeing somebody kind of consistently speed or harsh breaking, harsh turning and you're not coaching to that information, am I right where you could be opening yourself up to some more opportunity where you had the information available and maybe you should have made some corrective action?

JF: Yeah, so there's multiple layers to what we're seeing and they all end kind of with the same end result, unfortunately. So there's certainly social inflation across the board for all personal injury claims The numbers are up across the board whether it's an auto claim, a slip-and-fall claim, a construction defect; whatever it is the numbers are just higher for settlement and for verdict, we track verdict analysis pretty consistently, and the numbers are up whether it's in South Dakota, California or Pennsylvania. So there's that aspect and that as a result then drives up the cost that the carriers are paying on those settlements and verdicts.

And then I think you're right, the plaintiffs' attorneys have figured out a way in this orbit of the landscape world to, if it's an auto claim, focus on the fact that if there's an inadequate training on these things, they can try to put the jury in the same person, in the same stance as the person that was injured, and try to get the jury to then punish these companies. And that's certainly the kind of claims that insurance carriers are worried about, which then cause earlier settlements and impact premiums or their even willingness to write the auto side.

The landscape industry, I think, certainly does a great job on across the board training for their employees because they're worried about workers comp and their employees’ safety. And they're thinking about slip and falls and tripping falls, but at the end of the day, as you mentioned already, all of these folks are in fairly heavy pieces of equipment and sometimes we kind of gets caught by the wayside that these are the things that could really cause the catastrophic losses and that bears out then in huge numbers and so the carriers are worried about it. So they want to see some internal training they want to see what kind of background information you're doing and training for these drivers because they want to make sure that even if they're going to have to pay out for a loss for your driver negligent running into somebody they at least want to be able to show that it was a one-off, it was truly negligence, and it was an accident, and that there wasn't any kind of history that should show that this was bound to happen.

DG: It makes a ton of sense, you know, when you back it in that way. And I think as most business owners, nobody's set out to go about business without any strategy or without any training. And I think that with the amount of technology that's now available, it's easier for them to gather information whether it's leading or lagging information to kind of appropriately assign and create trainings to make sure that they're putting their drivers in the best position to be successful and not to be in these accidents. And at the end of the day maybe having more evidence to provide to you and the insurance carrier to ultimately defend if there is an issue. Talk to us a little bit about—I'm going to flip right back to the contract side on slip and fall documentation—when it comes to doing that type of work or doing when you're primarily engaged in landscape maintenance for these commercial properties. What are some things that the landscape company can do to show that the proof of work or the scope of work was complete? And do you have any examples that you've seen in the past where people are using this so that it does help just with the proof of work being completed?

JF: Yeas, so, on the landscape side, sometimes we don't always get the records exactly when things were serviced, especially if it's a contract that says, you know, say twice a month mowing or weed whacking or fertilizer placement or whatever, gravel, whatever it is. There aren't always great documents to show when it was actually done. And then as a result of it, we have to go back through timesheets, sometimes years later when a claim arises. So, you know, we're really looking for increased documentation and I think technology does make it a lot easier, it takes away some of the friction for this to really show when where and how exactly the work was performed so that we can show that it was done as we see.

Again, one of the claims that does tend to come up a lot is when somebody trips and falls in a hole and the landscaper gets dragged in because they say it was covered up because it wasn't properly then mowed and our contract says twice a month and then we're having to dig through time sheets but if we actually know exactly who was out there when they were out there; if you have any records with communications with your client, if you're not going to be out there for a certain time because say it hadn't rained in a while or it's extra dry weather that August or September, help things explain itself a little better. Again, it puts you in a better position. Otherwise, we're at the mercy of again, relying on credibility and the insurance companies, especially in these days of social inflation with bigger settlement and verdicts, they don't want to rely on that. They'd rather settle out on the case and protect themselves from those high exposures.

DG: I appreciate it, Josh. I want to thank you again for coming in and helping us out and talking a little bit about snow, talking a little bit about landscaping. I think this is the beginning to just getting more information out to the industry. The goal here is just to educate people and raise the level of professionalism, raise the level of oversight and expertise when it comes to executing on the work that's being done in this industry. So I appreciate you taking that stance and kind of leading the way with the history of your involvement with both snow and with landscape. If somebody wanted to reach out to you or connect with you, it would be a good way for someone to do that?

JF: Yeah. You can find me on our firm's website, Freeman, Mathis and Gary; Joshua Ferguson, and I'd be happy to reach out and respond and I very much appreciate the time today.

DG: Josh, thanks again. Appreciate it.

JF: Thanks.

Steps to Prevent Social Engineering Fraud

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

Social engineering fraud is when cybercriminals impersonate a trusted individual to manipulate others into performing actions such as making wire transfers, sharing confidential information, or granting access to their systems. It is often confused with hacking, but the two are fundamentally different. Hacking involves identifying vulnerabilities in software to breach a system, where as social engineering fraud relies on impersonation and manipulation to trick individuals into helping the cybercriminal.

There are multiple types of social engineering fraud schemes, but the most common one is called phishing. CrowdStrike, a global cybersecurity firm, defines phishing as “a cyberattack that leverages email, phone, SMS, social media or other form of personal communication to entice users to click a malicious link, download infected files or reveal personal information, such as passwords or account numbers.” This form of social engineering fraud has increased in popularity since the start of the pandemic as a result of an increase in the population working remote.

Research highlights that 98% of all cyberattacks come from some type of social engineering fraud. In the U.S., more that 80% of businesses have experienced phishing attacks, and nearly all successful network breaches (95%) involve phishing tactics. These statistics show that social engineering fraud is growing and can be challenging to detect because it is designed to grab the user’s attention through human emotions to manipulate their victims. Given these statistics, it is crucial that organizations adopt trainings and proactive measures to prevent these types of cyberattacks.

Even with an increase in these types of crimes, there are strategies organizations can put into place to mitigate risks.  

Trainings

Employees need to know exactly what social engineering fraud looks like and how to identify phishing emails, fraudulent phone calls, and other common tactics. Organizations should implement in-house phishing attempts to their own employees to practice guarding against these attacks. It is important that employees are mindful when receiving a potential fraudulent email and they should be checking the source by confirming with person it came from that it is a legitimate request. This is especially important if the email is requesting personal information like passwords or asking to wire money. Educating your employees will help build awareness and help guard against these kinds of cyberattacks.

Secure Devices

Organizations will need to make sure their anti-malware and antivirus software is always up to date to block malware from phishing emails before it reaches the receiver. Another way to secure your devices is to always use different passwords for your various accounts. If you have multiple passwords and a cybercriminal does get ahold of one of your passwords, they are not able to login into other accounts. Also, implementing a two-factor authentication process will also help guard against these attacks. If a cybercriminal does obtain a password, there is now a second step that is required by requesting a text message with a confirmation code or asking a security question.

Minimize Your Digital Footprint

Cyber criminals use social media to their advantage to gather personal information. Kaspersky, an international cybersecurity company, shares an example of how a common security question many banks ask is ‘what is the name of your first pet.’ However, the security firm points out that if someone innocently shares this information on Facebook or other social media sites, you could be vulnerable to a cybercrime. “In addition, some social engineering attacks will try to gain credibility by referring to recent events you may have shared on social networks,” explains Kaspersky. To protect yourself, make sure all of your social media accounts are set to private so only friends and family are able to see what you post. Also, make sure your social media accounts do not include addresses and phone numbers. These easy precautions will guard against social engineering fraud. 

Get Cyber Liability Insurance

While you can implement all the best strategies to protect your organization from social engineering fraud, it is still a best practice to talk to your risk advisor about a cyber-liability policy. They can explain the coverage and help you mitigate the risks.     

Social engineering fraud is a growing threat for individuals and organizations of all sizes. By implementing these strategies, organizations can help mitigate this risk. Focus on educating your employees by building awareness of what social engineering fraud is and looks like, securing your devices through anti-virus software and implementing two factor authorizations. Lastly, minimize your digital footprint by making sure your social media accounts are set to private and not sharing personal information. By implementing and practicing these steps, organizations and individuals will be better equipped to defend themselves from social engineering fraud.

For questions about your risk management program, contact me at (619)486-6569 or jmarrs@ranchomesa.com.

Navigating Snow and Ice Contracts: Best Practices for Landscape Contractors

In this first episode of a special two-part series, Landscape Group Vice President Drew Garcia, is joined by Josh Ferguson, attorney with Freeman Mathis & Gary, to discuss risk management for snow and ice operations and what landscape contractors should know.

Drew Garcia: Welcome back everybody. I'm Drew Garcia, Vice President and Landscape Group Leader here at Rancho Mesa. Today we have a great opportunity to connect with Josh Ferguson from Freeman, Mathis and Gary. Josh and I had a chance to get to know each other over the last couple of years through different trade associations. Josh has a big focus on the landscape and snow contracting community. Josh, welcome to the show. If you could share a little bit of your background with the listening group.

Josh Ferguson: Yeah, thanks for having me. I appreciate it. So as you said, I'm Josh Ferguson. I'm an attorney with the law firm of Freeman Mathis and Gary. I'm based in our Philadelphia office, admitted to practice in several states up and down the Mid-Atlantic. And I've been a litigator for 20 years now. I've litigated hundreds of slip and fall and trip and fall claims, developed the specialty over the last dozen years or so in the landscapes, snow and ice management, power sweeping industries, and have relationships with some of the trade associations in those industries like Snow and Ice Management Association, Accredited Snow Contractors Association, Planet and some of the state and regional landscape and snow contractor associations.

DG: Josh, your background's perfect timing for us because I can't tell you how many conversations with our clients lead to contracts and the contracts that they're signing with their customers, whether they're signing the customer's contract or are they putting their contract in front of the customer to sign; opportunities to review that and make sure things are up to speed before they start to get the work done. So I'm really excited for you to be able to comment a little bit on, you know, one, in the snow and ice management world, obviously the contract is super important. What are some things that these landscape contractors should be focused on pre-work, and before the contract gets signed, what are some things that they need to focus on to make sure that things are in order in the event something happens later on down the line?

JF: In the snow and ice management world especially, they're risk managers first and foremost. It starts and ends with documentation. So that's from the very beginning when they're starting to develop an RFP to if they get a contract and they need to do a preseason site inspection through in-event performance, post-event performance and invoicing all that needs to be documented. Because if it's not documented when these claims arise whether it's your client on the site telling you, you damaged something or two years later somebody said they slipped and fell you're going to need to prove through a document ideally what you did six months or two years before otherwise again it comes down to credibility and you don't want those claims to turn into intersectional car accidents where everybody claims they have the green light.

DG: That lines up so well with insurance right now because, you know, before we started recording this I was talking about just the carrier underwriting capacity for this type of work. It's really dwindling. There's a lot of questions that surround the pre–underwriting process or pre -quoting process for any landscape company that's in any portion of their work doing snow and ice operations. And you know, one of the key pieces that I think is starting to push the industry in the right direction is the ability to document and there's a lot of technology and software that's making that a little bit easier. Have you seen some improvements in the contractors’ ability to document based on the technology that's available to them today?

JF: Yeah, look, at the end of the day, from an attorney perspective, we're asking for the sun, the stars, and the moon from these contractors. And in the middle of an event, things are more challenging. It's why we probably didn't get as much documentation back in the '70s and '80s and '90s, but technology has really changed the ability for them to do things without a ton of extra work, whether it's right on their phone with an app or it's the actual pieces of equipment, recording it, GPS, or application of de-icing material, whatever it is. And we are seeing that more and more in claims when a suit arises and we're asking for documentation that's coming. And it really does make a big difference in our ability to prove that what you say you did, you actually did.

DG: And I mean, so important in today's world to be able to have that proof. And when there's the ability to do it, it's on the contractor to develop those processes so that it becomes routine so that they don't miss that one opportunity and that opportunity becomes the one that comes back to get them in the end. How about when that work’s being subbed out, so not self -performed, maybe by the landscape business, but they're using service partners to form that segment of the business. Is it same concept there? Are you holding your subcontractor to those same standards? Should they be doing anything different with that work?

JF: Yeah, I mean, absolutely the subcontractor should be doing meeting industry standards and what's in the contract. One area I see contractors that are really good and do good work fall down a little bit when they subcontract out work is that they may have one base subcontractor agreement that they hand out to all of their subs. But each and every one of their client contracts might be different. And you want to make sure the terms that you're obligated to are then passed down to your subcontractor so there's not a gap. So we're talking about the actual scope of services, we may even be talking about the insurance policy limits. These claims have gotten larger and larger in size. What used to be a slip and fall that costs $200,000 now costs half a million dollars in some locations. And sometimes that impacts policy. So you want to make sure you are really comparing and contrasting and making sure that your subcontractors are meeting all the burdens that you would have had to meet should you have kept the work.

DG: Absolutely. And do you see, is that something that a contractor should be looking at routinely? So how often should they review their subcontract agreement to make sure, “am I up to speed with today's terms?” Or is that like once a year you should be looking at that? What's a good cadence on just reviewing that and making sure that you're up to speed?

JF: Yeah. I mean, I think both on your client contract and then your subcontractor agreement, I would look at those yearly. As someone who reviews, especially this time of year over the last few months, dozens of contracts sometimes a day from my various direct hire clients that I serve as outside general counsel for, it's a living and breathing document, right? So even this many years into litigating and serving as general counsel, things come up each year where then we're adjusting a base agreement for. And in addition to that, things change over time. So I think it's something, and business models change. You may do less retail shops and more HOA work. And that may change the type of language you want in your agreements. So I think those are things you should revisit on a yearly basis.

DG: And so that the people listening on the other end have an idea is how to get that done is that having somebody like you in their corner where, you know, annually they're sending these over to you for review? So having some sort of partnership with a firm so that they have this ability to manage those contracts throughout the year or when they're annually recreating their subcontract agreement. Is that how you get that done?

JF: Yeah, I think that makes the most sense, you know, if you have a counsel or somebody you're comfortable with that makes a ton of sense. Again, something we do we do a fair amount and we revisit those annually and then, again, we know there's peak season for those contract review negotiations especially if you're getting a client agreement pushed down on you and you have some concerns with the language, that's something we look at routinely. But whether it's us or someone else the thing that I hope folks come away with the most is that you should always try to review that that contract that's put in front of you and mark it up so it's at least fair. The worst thing that's going to happen is it's all rejected, but you still have the benefit of reviewing it, understanding it, and so at least you know your risk management there.

DG: Good point. I think I like that term, just being fair, because I think a lot of the audience listening that is in this space and performing some snow and ice service or some winter services, they understand that at the end of the day, they want to be there to provide coverage if there's an issue that they inadvertently did. If it was an issue that came up as a result of the service that they rendered, then absolutely, you want to be there for that. I think it's where it might be a little bit of a gray area in terms of who's really at fault with this, that's where I think a lot of the businesses today. Are you seeing more where the contractor's able to put their contract in front of the customer or is it shifted now where the customer's more imposing their contract to the contractor? Has there been any change in that recently?

JF: I think it's pretty consistent that the big box stores, the retail establishments, the large property managers are still trying to put their agreement in front of folks in the snow and ice management industry. We are seeing, I think, an overall uptick in the willingness to engage in a back-and-forth process on the language. Again, depending on the size and folks involved on the other side. You may get one thing out of 10 changed, you never know. But again, most of the time it's worth those efforts.

I am seeing more contractors that have at least drafted up their own contract. And so sometimes then we try to add our contract—meaning the snow and ice management contractor—in as an addendum or an exhibit to then the say property managers contract to help balance out some of the risk and liability-limiting language.

DG: Got it, very good. Anything else that you wanted to share in your experience with snow and ice? I know this could go a number of different ways and we're trying to keep the time down to a 12 –minute segment, but anything else that you wanted to share on the snow and ice side for the listeners?

JF: Yeah again, the importance of having a contract that's clear on your obligations and documentation to prove what you did in January 15, 2021 at 2:30 A.M. If you've got a contract that says the time you were supposed to come out, exactly what you're supposed to put down—and you have the documentation to prove it, it allows your insurance company and their attorney, if a claim arises, to put it in the best position to defend those claims instead of paying out. And that will protect you and the industry as a whole over the long run.

DG: That's a great point. Well said. Well said. Well we appreciate it, Josh. Thanks for the comments on snow and ice, and hopefully we can do this again soon.

JF: Thanks for having me.