Why Inland Marine Insurance can be your best investment in your business!

Attention: Landscapers and Lawnmowers. You need Inland Marine Insurance Coverage.

Get the answers to your inland marine insurance questions for your lawncare or landscaping business at generalliabilityclasscodes.com

Inland Marine Insurance really does not sound like a type of insurance a landscaper or lawnmower would be expected to need; but you absolutely do in order to avoid gaps in your coverage. While the insurance class codes for landscapers and lawnmowers are not identical, common issues face both industries which can be addressed with this type of Insurance. Inland Marine insurance came into being as Ocean Marine Insurance in the very early days of transport across the ocean. This coverage expanded to other water ways such as lakes, rivers, loches canals and channels known as inland waterways used to ship goods and cargo in all kinds of trade. But the term has evolved with the times and can now be used to provide coverage for almost anything that is transported whether it’s over the ocean, inland water ways or over land; which brings us to the two most important reasons for having this type of insurance.

First, clients do not come to your shop to have you landscape their residential or commercial property, or trim their trees. You need to travel to where the work is being performed and bring with you all the equipment and tools you need to do the job and those items must be transported.

Commercial Auto insurance does not cover transportation of tools and mobile equipment while Inland Marine Insurance does. In fact, your commercial auto insurance policy may not cover all the specific type of “vehicles” you are using in your company at all if they are not defined as an automobile while the Inland Waterway Policy can insure moveable equipment and or unusual items used in any industry. So items applicable to landscaping and lawn mowing could include:

Heavy duty pickups, moving or cargo vans, or trailer used to transport tools and equipment.
Heavy equipment, e.g. Backhoes, bobcats, cement mixers, graders, and fork lifts used to perform the job.
Small or miscellaneous equipment and tools

Second, Inland Marine protects your equipment, tools any unusual item and can be designed to fit any and all of your needs if it is properly underwritten to be specific to your industry under the class codes. For instance snow removal can be added if the class code is added as secondary industry and you have a floater specifically for the snow removal equipment. A variety of floaters are available and you can add any type of floater that your insurance carrier provides to your policy that is appropriate for your business. Inland Marine can be included in a business owner’s package or be a stand-alone policy in addition to your general liability and other traditional types of business insurance.

Inland Marine is unique to insurance, in that it can be written as “peril coverage “where only specifically listed items which are attached to the policy are covered; or “all risk” Obviously the premium and deductibles would vary depending on which type you choose and how much coverage you want. The drawback to peril coverage is you must keep your list updated every time you have to replace or purchase a new piece of equipment or a tool, and advise your agent immediately of the change. In other words any item not listed is not covered. The risk of failing to notify your agent timely can be partially addressed with a floater for new items purchased which extends your time to notify your agent but gives you less coverage for that item than if you had notified your agent sooner.

.Landscapers and Lawnmowers will primarily need Mobile Articles & Machinery and Equipment Coverage as a floater which is the type that will pay for damage incurred to the property or theft of the item during transit of the object. Regardless of whether you want a combination BOP or a stand-alone policy you would want to analyze whether you need additional optional “floaters” in your Inland Marine policy. For instance:

Rented Leased or borrowed items floater if you rent machinery or equipment to use for specific jobs.
Computer /printer/hardware/software and business data floater if you take your computer with you to jobs to prepare bids, designs invoices etc.
Loss of revenue incurred due to loss of business data.
Installation floater if you leave machinery, building materials or other items at the job site for the duration of the project.
Bailee’s/customer’s goods floater in the instance where you might have possession of, or are transporting the owner’s property. This could occur in an instance such as the owner has purchased a large feature item, say a fountain, and the landscaper needs you to transport and install the fountain.
Employees tools

Another very crucial floater is Builders Risk a/k/a Course of Construction. This item may not be necessary if you are working with a General Contractor and you are a named insured on their policy. Conversely, it could be highly beneficial if you are not working with a GC. You should thoroughly discuss each aspect of your work with your agent to determine when this floater is necessary, and periodically review whether you need this coverage as your business grows.

So, with a unique combination of floaters designed for you, Inland Marine insurance can be your key to protecting your business equipment, while being transported to and from the job site, throughout the duration of the job and back home to your headquarters again, giving you peace of mind and freeing you to focus on other aspects of your business.

Beauty Salon Owners

What Beauty Salon Owners need to know about insurance before entering into a Chair or Booth Rental

Get the answers to your beauty salon insurance questions at generalliabilityclasscodes.com

In the Beauty Salon industry the practice of renting a chair or boot to a stylist has been around a very long time since the early 1900’s. This tradition fell out of vogue and the number of renters declined. See Booth Renters 101: A Guide for Owners Renters. Beyond the Chair.com Judiffier Pearson, 1916. In fact chair rentals are no longer legal in some states such as Pennsylvania. However, it is increasing in popularity again and is expected to be one of the fastest growing trends in this industry.

From a salon owners perspective it might seem quite attractive. It can offer many benefits such as:

Cuts down on the building overhead.
It is a standard flat rate not dependent on the stylist’s income.
The salon owner does not pay a wages, workers compensation insurance, employee or ER taxes for the renter:
The salon owner does not pay for the supplies or products used by the stylist
It may reduce the salon owner’s actual time standing on their feet while providing services for the clientele, which may be of significant value as the national work force as whole, including salon owners is aging.

So what’s the catch? First this relationship radically differs from an employee employer relationship and is actually a landlord tenant relationship giving the tenant rights of recovery an employee does not have. Second, there are numerous legal and tax issues which must be addressed in a contract in order to meet the Internal Revenue regulations: See Booth Rental-Legal and IRS Compliance, businesecon.org/2013. If you do not meet the requirements of an independent contractor IRS may determine you misclassified the employee and are now liable for taxes and/or Workers Comp. If you are going to rely on booth rentals you really need to have an attorney specifically design a standard contract that complies with your state laws that you can tweak to use for all booth rentals. Your contract needs to be salon specific and cover every material factor including: guess what insurance!

In regard to insurance, our contract should spell out:

all types of insurance that you are requiring the chair renter/ lessor to carry
the face amount you are requiring
that both the salon and you personally be named as additional insureds and that you be entitled to copies of all policies and copies of any policy changes be provided to you by the insurance company at the salon’s location. This is because your salon is liable if the renter fails to carry insurance and it is likely you will be joined in any lawsuit.
The contract should require that the tenant’s coverage be primary and noncontributing. with the insurance maintained by the landlord. This means the tenants insurance coverage is depleted before the renter or the insurer can seek recovery from the salon owner’s coverage.
The lease should also require the renter’s insurer to be licensed in the state in which the property is located and that they have sufficient total assets to cover its policy risks and satisfy certain Financial Strength ratings by A.M. Best Company.
The alternative to this is, a few insurers will allow Salon Owners to have a rider for Independent Contractors; if they meet all the regulations and qualify as Independent Contractors. The key for this arrangement to work is the cost for the add on or rider is set out clearly in the contract as a dollar amount between the Chair Renter and the Salon Owner which must be reimbursed to the Salon owner. (Although is not a common insurance practice there is nothing wrong with mentoring a new renter/Independent contract and trying to help them get established by offering information on types of insurance available, or even asking your agent to design a Business Owners Package which protects both parties. (See. “Changing the Booth Rental Salon Structure Entirely: Don’t be Just a Landlord.” The Ugly Beauty Business Dec. 2013.Tina Alberino.

If you choose to go the traditional route, what type of insurance is going to provide you and your business with the most protection from the renter’s actions? Of course, you want the renter to carry both General Liability and Professional Liability which most trade organizations in the industry recommend for the renter. As a salon owner you want to ensure that your needs are covered so you may want the renter to carry more diverse coverage. One obvious choice is Damage to Premises Rented to you. You may want to require the renter to furnish Personal and Advertising Injury as well as Tenant’s Legal Liability. If the renter is advertising you could be injured if reference is made to your name, salon or your address in the ad. Or you could co- advertise or feature their service in your advertisement but may lead to issues if the renter is not professional and above board.

Optional insurances highlighted above above can be purchased through a business owner’s package or as separate add on to generally liability. These packages are available to the salon owner and are also applicable to a renter who, in essence is a small business owner as well. The packages can include all of the above; plus, Back up of Sewer and Drain, Business Property, Commercial Auto, Inland Marine, Products liability, Products -Completed operations, Damages to Premises Rented, Personal and Advertising Injury and Loss of Business Income and Extra Expenses, Equipment Breakdown, Mechanical Breakdown, Identity Recovery Umbrella Liability, Cyberflex Coverage, Stretch Coverage which can cover just about any item owned or used in providing Services, including while being transported or being used offsite for a wedding or event of some type, Bailee’s insurance and bodily injury by disease.

So perhaps a risk management review with your agent or broker is a necessary step to protect you before renting a chair. This is particularly true if you are adding a new type of service you have not had in the past as more salons are embracing the spa model and offering expanded services to meet the clients need. You want to be sure that your general classification code for liability includes this category of services or it is added to your policy. Each new service may have a classification code of their own for example nail salons, nail technicians and Esthetician professionals. Each may have a different class code under the code used by the insurer applicable to the state you’re salon is I, and may have different licensing requirements. As part of your insurance risk review you agent or broker can advise you on emerging risks you may not be aware of relating to the industry. A perfect example is what is happening in NY with nail technicians and manicurists.

Due to the practices of a few unscrupulous nail shop owners, nail technicians were paid unfair wages and forced to participate in illegal activities. New York took swift legal action against the owners and enacted new laws. The media attention generated by the investigation cast the nail salon profession in a negative light. It also sparked growing health concerns impacting nail technicians, manicurists; and pedicurists and their unborn children including cancer, miscarriages and birth defects after a second research study came out on the health of nail technicians.

The medical issue is sure to spark litigation by the public, renters and employees alike and drive up concerns over the risk involved in running a nail salon or having employees and or renters who engage in nail services. Expect it to generate new stricter OSHA regulations for the protection of the public, nail technicians, whether a renter or an employee, and other employees exposed to the chemicals, fumes and residual dust from products. Anticipate more restrictive regulations for protective equipment as well as ventilation systems and/or HVAC systems along with changes in the building code used for beauty and nail salons in your region. you may want to get an inspection to ensure code compliance.

Products liability cases against the manufacturer of the products used by nail technicians can be expected. General liability claims may rise against the salon owner where a claim is for exposure to products resulting in cancer, miscarriage, birth defects and bodily injury by disease, by persons who were the salons clients not the chair renters Additionally, the renter does not qualify as an employee and so would not be able to bring a worker’s comp claim but that does not mean a renter cannot bring a general liability claim against you for an injury caused by one of your employees or another renter.

If you, the salon owner has a renter (or employee) who renders nail services or uses chemicals not frequently used for styling hair you would be wise to inquire at your insurance risk review if your policy aggregates and medical expense coverage is adequate

Beyond General Liability Insurance: Construction

Beyond General Liability: Insurance dilemma’s facing the Construction Industry and Special Trades

How to use the proper construction class codes to fortify your coverage.

Most industries are assigned one or more general liability class codes for insurance underwriting purposes under the 4 most commonly used authoritative classification guides including: PAAS/ ISO , NAICS, SIC and NCCI. However, some industries have multiple class codes which are broken down by specific sub groups within a general type of industry.

For example, the construction industry contains separate categories for general contractors and for subcontractors who work in this complex field. The class codes are further refined by whether the contractor works on residential property or commercial developments and are categorized by the type of work they actually do such as Manufacturing & Industrial Bldg. Construction, Heavy Construction, Highway and Streets; with subcategories for Bridges & Tunnels to name just a few. Identifying and defining all of the class codes relating to construction beyond the scope of this article.

Under the construction industry classification codes many of the sub classifications are assigned to what is considered to be “skilled” or “special” trades. Some trades in his group generally require licensure by the state or local area they work in, in regard to their own field as an individual worker. Sub-Contractors in the specialty trades usually always require licensure as well, as determined by the state and local area they work n. These trades included electricians, painters, plumbers and HVAC installers. However, the classification codes also have categories of skilled or special subcontractors who do not necessarily have to be licensed individually including but not limited to flooring, installation, trim installers and handymen unless they are a contractor.

Virtually all construction contractors, whether residential or commercial need a good comprehensive primary general liability insurance policy which insures them from 3^rd party claims by the public, or owner of the property being built or remodeled; brought against the contractor for damages to person or property. The general liability policy can be tailored and tweaked to meet the needs of each policy holder based on their general liability classification. General liability policies standing alone do not cover professional liability. Why you might ask?

The general classification codes for construction industries normally do not classify construction companies as rendering professional opinions or advice as they would, say for example architects, who designs buildings. Architects would normally be advised by their insurance agent that they should have professional liability insurance because of their classification code. This is the crux of a rising issue on the horizon. Since construction industries are not usually assigned a class code which triggers the need for professional liability insurance; some construction contractors and subs may not be aware of the rising need for this type of insurance. It is important that every classification code applicable to the work your company actually performs be determined and included as a class code o your organization fits in. If your company meets the definition contained in the NCAIS classification code for architects # 541310 gives this description “both design and construction of buildings, highways or other structures; or in managing a construction project, or are classified as Section 23 Construction” you should closely examine your need for professional liability insurance and your options for selecting the appropriate professional liability policy. (Link to Project Professional Liability) as either a separate policy or add onto your general liability.

In the past professional liability was only needed by the architect or the design professional responsible for the project. In the present general contractors’ who engage in the design aspect of the building project or manage the project need this protection and should explore what is there best option. (Link too. Project Professional Liability Insurance Alternatives, IRMI) That needs has been widened to subcontractors. (Link State of the Industry Construction Insurance and Risk) The subcontractors who appear to be most vulnerable are concentrated in the special trades who design systems that are an integral part of the building, such as the HVAC system, the electrical system and the plumbing system. It can also include those instances where the system being installed inadvertently compromises another part of the project, .e, the HVAC Contractor gave an opinion or advice on how to modify construction to accommodate the HVAC system and it negatively impacts the foundation.

The emerging trend according to the Institute for Risk Management suggests that professional liability will be a hot topic this year in the construction insurance industry. They further indicate that Contractors are requiring subcontractors to have professional liability and certify that they have it continuously throughout the job.

It is not inconceivable that professional liability insurance for contractors and subcontractor may be needed in a residential setting as well. For instance assume an electrical contractor is employed to rewire a house and makes recommendations and offers opinions on all of the products to use, the type of wiring needed to meet the electrical code, where the junction box should be placed, how many outlets are recommended, what type of lighting is necessary and the list could go on and on when you consider all the myriad operating decisions made on an on-going basis during a build or remodel. These appear to be professional recommendations and the rendering of an opinion and litigation could be brought under this theory.

So, it is critical that the insured discuss the tasks that each employee performs with your agent and fill out your application thoroughly. (Construction Business Owner.com) so you can get the exact coverage needed at the most reasonable cost to you. General liability is not necessarily the stopping point in your search for the best and most coverage for your construction company. General liability which is required can be combined with other types of commercial policies to ensure that your company is adequately covered in any situation. In addition to profession liability. You always want to consider a Business Owners policy and/or an umbrella policy.

One more very important point is to review all exclusions contained in your primary general liability policy you are considering purchasing and discuss with your agents and then determine if there are any alternatives where you can obtain coverage for the matters so excluded.

A common exclusion in a construction company general liability policy is defective construction or faulty workmanship exclusion as insurers did not want to encourage bad workmanship based on public policy concerns. However the emphasis is shifting to protection of the public with adequate insurance coverage options being made available to the contractor. Citizen’s General (Link) is one insurance company that now offers workmanship insurance as an add on to commercial general liability policy giving you coverage which is normally excluded under the primary general liability policy.

So take heed and make sure your business has all type of coverage that you need.