Blog

Auto Prices Are Going Up!

Jeff Cavignac, CPCU, RPLU, ARM

Loss experience on auto policies is deteriorating and auto premiums are going up.  State Farm, the largest U.S. home and auto insurer, lost $7 billion on their auto book in 2016!  They announced that they plan to close 11 of their offices due to this.  From a commercial insurance perspective, most of the companies we […]

Property Management Agreements – Insurance and Indemnity

Scott Bedingfield, AAI, CRIS, Principal/Commercial Department

With reference from IRMI (International Risk Management Institute) The traditional approach for providing insurance in Commercial Property Management Agreements requires the owner to purchase and maintain Commercial General Liability (CGL) insurance applicable to the managed property and to include the property manager as an insured under that policy. This approach is supported by the fact […]

Duty to Defend: Passage of Senate Bill 496 and What That Means to the Design Profession in California

Jeffrey Cavignac, CPCU, RPLU, ARM

From a Design Professional’s standpoint, California has historically had some of the worst indemnity laws in the country.  Unless it is expressly stated to the contrary, the duty to defend an upstream party is immediate.  It is separate from the duty to indemnify and the Design Professional can end up being responsible for 100% of […]

Cyber Risks – The Current Surge in Attacks on Small Business and How to Reduce Their Impact

Stephen Watson, Account Executive

Often risk advisors will hear their clients say, “My company will never get attacked.­ I’m just a small fish in the big sea of potential targets.”   However, according to the International Risk Management Institute, small businesses are specifically targeted by cyber thieves because sensitive information kept by small business is much easier to obtain due […]

Bonding Design – Build Contracts: Avoiding “Non-Negligent” Guarantees

James Schabarum II, CPCU, AFSB, CRIS

Contractors that enter into design-build contracts can significantly increase their risk significantly by taking on the design responsibilities for a project. When required to bond, design-build contractors may not be fully aware that a bond guarantees all the terms of the underlying design-build contract including subjective design requirements. If there are unknown terms and conditions […]

Understanding Professional Liability Coverage for Design Firms

Kelly Potter, PWCA, Account Executive

Professional Liability is a coverage that all design firms need, and is generally a company’s first line of defense against liability arising out of their performance of professional services.  Even if you choose not to dissect your insurance policy word by word, it is a good idea to have a basic understanding of how your […]

Overcoming Obstacles and Risk Management

Mike Riis, Account Executive

  Playing competitive sports throughout life, you learn about overcoming obstacles and finding ways to use them to your advantage. I have always had a general understanding of this concept as it pertains to athletics/life, however, I never fully applied the concept to risk management and insurance (for obvious reasons). I recently stumbled across a […]

“Trumpcare” Part I

Patrick Casinelli, RHU, REBC, CHRS, Principal, Employee Benefits

Before we discuss Trumpcare, we should decide what to do with Obamacare – the Affordable Care Act (ACA).  Can we “repeal” the entire law?  Can we “replace” some of the law?  Which part or parts of the ACA work and which don’t?  My answer is YES.  Yes, we can repeal, yes we can replace and […]

OSHA Reporting Requirements Are Changing

Chris Malicki, OHST, CHST, COSS

The new rule, which takes effect Jan. 1, 2017, requires certain employers to electronically submit injury and illness data that they are already required to record on their onsite OSHA Injury and Illness forms. Analysis of this data will enable OSHA to use its enforcement and compliance assistance resources more efficiently. Some of the data […]

Environmental Risk and the Real Estate Industry

Matthew Slakoff, CIC, CRIS

If you work in or around the commercial real estate industry, you are probably familiar with terms such as the following:  Adaptive Reuse, Transit Oriented Development, Urban Infill, etc.  All of these terms relate to the concept of urban redevelopment.  Although these types of opportunities are exciting, they can also present a myriad of risk […]

What is USL&H?

by Preston Cavignac, CPCU, CIC, CRM

There are a number of industries that require specific insurance knowledge to properly manage risk. Maritime and maritime-related industries are a few. Whether working near water, on a vessel, or in a related industry, specific laws may apply. Although there are many types of marine-related insurance products, the purpose of this blog is to review […]

Injury and Illness Prevention Program (IIPP) Requirements Apply to All California Employers

By Chris Malicki, OHST, CHST, COSS As the owner or manager of an engineering or architectural firm, you may not be aware that you are required to have an Injury and Illness Prevention Program (IIPP).  Every employer, however, is required to have one.  Cal OSHA regulations clearly state:  “every employer shall establish, implement and maintain an […]

California’s New Variable Split Point Experience Rating System

By Jeffrey Cavignac, CPCU, RPLU, ARM Effective January 1, 2017, the Experience Modification Formula in California will change.  The experience rating formula is created by the Workers Compensation Insurance Rating Bureau (WCIRB or the Bureau) and approved by the California Insurance Commissioner.   Application of the Experience Modification is mandatory for all eligible employers.  The WCIRB […]

Alternative Risk Financing: Dividend, Small Deductible and Large Deductible Plans

Preston Cavignac, CPCU, CIC, CRM

As insurance costs increase, so does the need to find alternative solutions. Most insureds are accustomed to “guaranteed cost” plans. These plans are characterized by small, “maintenance” deductibles and standard limits of insurance. The benefits of guaranteed cost plans are fixed premiums, predictable cost (good for budgeting) and claim services which are provided by the […]

The Pros and Cons of the Prevailing Party Provision

by Kelly Potter, PWCA

A prevailing party provision is a clause included in contracts that requires the losing party of a lawsuit or claim to pay the legal expenses incurred by the prevailing party.  In the absence of this provision, each party typically covers their own legal costs.Supporters of this provision believe the clause will make each party think […]

Employment Practices Liability

by Preston Cavignac, CPCU, CIC, CRM

Employment Practices Liability is a serious issue for all restaurant owners. Why? Restaurants can have 25+ employees working over the course of a week. More employees lead to a greater probability of employee-related issues. When restaurants enter their busy season they have to hire help, and do it quickly. The hiring process can be shortened […]

Communication – The 3 Golden Rules

By Kelly Potter, PWCA, Account Executive, Cavignac & Associates

Poor communication is a leading factor in claims against design professionals. The failure to effectively communicate within a firm, and between a firm and its clients, consultants and others, can result in more than inefficiencies, mistakes and missed opportunities. It can also significantly impact the financial health of your business.Pages could be written on effective […]

El Niño is Here! What Every Homeowner Needs to Know to Protect Against a Flood

by Carolyn Konecki

See Carolyn’s interview regarding floods and flood insurance on KUSI News: Weather experts have been predicting El Niño weather conditions for this year, meaning heavier than normal rainfall. While Californians certainly need the rain to break the drought, too much rain at one time can be a problem for homeowners.During the last heavy rains in […]

Some Coverages You May Not Have That You Should Consider…Now!

Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

As risk management advisors our job is to help our clients identify their exposures to loss and make certain their insurance program is appropriate.  We don’t recommend our clients purchase every coverage available, but we do suggest that they know that they know the exposure exists.  There are however several coverages which if you have […]

The 3 Biggest Misconceptions About Insuring Valuable Items

by Carolyn Konecki

Most people are collectors. Some collect books or political campaign buttons, others collect sports memorabilia or shoes. While some collections are only sentimental, most have some value, if not significant value. One thing that collectors have in common is that they are passionate about their collections.I have been a personal insurance agent for 12 years […]

Cyber Liability – What is it and is My Company at Risk?

by Preston Cavignac, CPCU, CIC

Cyber liability is a hot topic in the insurance world. We have already heard about the big losses: Play Station, Target, Home Depot, LinkedIn, Sony (most recent and estimated at $100 million+ in damages). But what are the chances that your company will be hacked? We don’t read about the small- to mid-sized companies, which […]

Restaurants and the Human Expense

by Preston Cavignac, CPCU, CIC

One of the largest costs for restaurants is compensation and related employee expenses. Workers’ compensation is a big piece of that pie. Often the dollar amount of an injury can cost an employer up to three times what was actually paid in medical expenses. If this exposure is not managed correctly, a profitable restaurant can […]

I’ve Been Sued! Now What?

Real Estate Development – Protecting Your Profits

by Preston Cavignac, CPCU, CIC

Developers take significant risk. Studying market conditions, analyzing trends, predicting future demand, placing debt and equity, and acquiring permits and entitlements are some of the activities that occur prior to construction. Assuming construction goes well, there will be a finished product that was based on analytics developed years prior. Now that product has to perform. […]

Construction Contracts from a Surety’s Perspective: Limiting Your Exposure for Consequential and Liquidated Damages

by Jase Hamilton, AFSB, Cavignac & Associates

A common provision in construction contracts allows for the “upstream” party to be entitled to damages if the contracting party doesn’t perform to the agreed contract terms. These recoverable damages are often referred to as consequential and liquidated damages. There are big differences between consequential and liquidated damages. Watch out: sureties are very sensitive to […]

Extraterritorial Workers’ Compensation: When Do You Need Foreign Workers’ Compensation Coverage?

A Brief Primer on D&O and Why You Need Side A Excess

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

Directors and Officers (D&O) liability policies provide three distinct coverages. The first (known as Side A) is liability coverage for individual directors and officers of the parent organization (termed “directors and officers liability insurance”). The second (known as Side B) is corporate reimbursement coverage, which reimburses the parent organization for payments it is legally obligated […]

Workers’ Compensation and How it Differs from Traditional Insurance

by Preston Cavignac, CPCU, CIC

The Basics Workers’ compensation is unlike traditional insurance. It is “no-fault” insurance, which means the same party (the employer) covers the loss no matter who caused the loss. The purpose of work comp is to deal with work-related injuries in the most effective way possible.  Although the employer pays for the claim regardless of fault, […]

What is GHS and What Does it Mean to my Business?

by Amy Leung, CSP, ARM – Risk Control Advisor, Cavignac & Associates

GHS stands for Globally Harmonized Systemof Classification and Labeling of Chemicals. This is the new standard of classification that intends to enhance environmental protection, public health and safety and reduce possible miscommunication due to language barriers. The system uses universal hazard statements, pictograms and signal words to communicate information on product labels and Safety Data […]

Are Your Liability Limits Adequate?

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

The following example is an actual case. Here is the claims adjuster’s analysis: This is a 2-car accident.  The driver of the insured vehicle (our client) was attempting to make a U-turn when he pulled out in front of the claimant vehicle, causing a collision. Liability is probable for this matter. The police report places […]

Non-Owned Autos and What You Need To Know!

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

Sally is your receptionist, and she will occasionally run errands for your company in her own car. You pay her the IRS recommended auto reimbursement, but it never crosses your mind to check Sally’s driving record or to see if Sally has insurance, let alone adequate limits of coverage.Sally is driving to Office Depot to […]

Driver Safety

by Amy Leung, CSP, ARM - Risk Control Advisor, Cavignac & Associates

Developing a distracted driving prevention policy can be a strong way to protect your company and keep your employees safe. To create a safety culture that prohibits distracted driving: Formulate a policy that includes the following directives for all employees: Before using a cell phone or any other mobile communication device, safely pull over to […]

The Dreaded Business Meeting!

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

My four partners and I recently returned from our Management Offsite Retreat. The meeting was held at the newly-remodeled and recently re-opened, Casa Del Zorro in Borrego Springs.* While we didn’t solve the world’s problems, we certainly solved many of ours and identified goals and objectives for the next five years. It made me reflect […]

Surety Fraud

by Gary Brouwer – Surety Manager, Cavignac & Associates

Over the past year, we’ve seen an increase in reports of small businesses and financially-stressed enterprises unknowingly being duped into obtaining and accepting fraudulent bonds. Earlier this year, Chubb Surety discovered evidence of a number of forged bonds. Apparently the alleged forgers had websites where they posed as individual sureties, then proceeded to spread fake […]

Beware of Patent Trolls

Article courtesy of Professional Liability Agents Network (PLAN)

Imagine this. You get an official looking letter from an unfamiliar limited liability corporation (LLC). The letter states that it is aware that your firm operates a particular type of copy machine that has a push-button feature that enables you to scan documents and then email or otherwise transmit them directly from the copier via […]

Personal Risk Management

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

I don’t sell personal insurance, but I understand it, and one of the services I offer my business clients is a review of their personal insurance program.  I am constantly amazed at the gaps, holes and inadequacies that I find! The owner of a $100M contracting firm, a man with a net worth well into […]

California Comp Rates Continue to Rise

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

The Workers’ Compensation Insurance Rating Bureau (WCIRB or “The Bureau”) recently published their analysis on Insurer Experience through 2012.  It’s not pretty!  Although underwriting results improved modestly, the numbers are still dismal.  Insurance companies are losing a lot of money in this line and are taking steps to fix the problem.  Translation – higher rates.  […]

Prevailing Wages: The Davis-Bacon Act…What You Need to Know

by Preston Cavignac, PWCA

How it Started The Davis-Bacon Act was implemented in 1931. U.S. federal law required employers to pay a set rate of prevailing wages on federally-assisted contracts worth over $2,000. The prevailing wage rate includes a base wage and an additional stipulated fringe benefit amount per hour. These “fringes” are meant to be paid out to […]

Keep Talking…the Advantages of Alternative Dispute Resolution

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

Litigation is hugely expensive, time consuming and emotionally draining.  Although litigation has its place, in most cases it is an ineffective way to resolve business disputes.  In fact, 19 out of 20 litigated cases are not decided by a judge or jury, they are resolved prior to final adjudication. Insurance companies pay millions and millions […]

How to Read a Commercial Insurance Policy

by Preston Cavignac, PWCA

Most people find insurance policies difficult to navigate. It is nearly impossible to read through a 300-page policy. The style in which policies are written does not lend itself to be read like a book; they are contracts and require thorough navigation to order to determine coverage.The following article will inform you how to maneuver […]

When OSHA Comes Calling…What Does Your IIPP Look Like?

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

Don’t know what an IIPP is? OK, you had better read this. If you do know what an IIPP is, and you have one and know where it is, are you confident it is compliant?An Injury and Illness Prevention Program is a fancy name for a safety program. California requires that all employers have an […]

The First Sign of Trouble: The Importance of Resolving Problems Early

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS – President, Cavignac & Associates

A professional liability claim can devastate a firm’s profit and in some cases destroy a firm entirely. Taking steps to reduce the frequency and severity of a professional liability claim not only makes good business sense, it could mean the difference between survival and failure.Talk to any claims adjuster and they will tell you that […]

If Disaster Strikes…Are You Prepared?

OSHA’s Top 10 for 2012

by Amy Leung, Risk Control Advisor

As the year comes to a close, we reflect on what has been accomplished and begin to set new horizons for the coming year. As you develop your organization’s goals, please don’t forget safety and reducing the exposure and severity of accidents. Here are OSHA’s top 10 most cited violations for Fiscal Year of 2012. […]

Insurance 101

by Preston Cavignac

Insurance can be a tricky subject. You know you need it, so you buy it. Then your goal is never to use it! It would make for a terrible gift. But insurance is necessary. It plays a major role in your business, the local economy, and society. Reading through a policy and negotiating coverage can […]

The Second Law of Thermodynamics and what it means to Risk Management

What Does Healthcare Reform Mean for You and Your Business?

by Patrick Casinelli, RHU, REBC - Principal

With the exception of the limits on the federal government’s authority to withhold Medicaid funding, all provisions of the Affordable Care Act (ACA) stand, and compliance efforts likely will move ahead at full speed. In preparation for the major coverage expansion to occur under the ACA in 2014, expect a host of regulations dealing with […]

Where’s the Beef?

by James P. Schabarum II, Principal, Executive Vice Principal

Boom to bust went technology, real estate, and now the construction market.  Hunting down and executing profitable work in the next few years will be critical to the survival of most contractors.Surety losses are expected to increase in the remainder of 2012 and in 2013: since a downturn in construction activity means more bidders fighting […]

Cyber Liability: What It Covers and Why You May Need It

by Kelly Weaver, PWCA - Account Executive

As we become more reliant on technology as a way to store and exchange data, cyber liability exposures become more of a financial risk.  If your business keeps digital private records, you have a Cyber Liability exposure.While each Cyber Liability Policy is a little different, most provide coverages for the following: Loss of digital assets […]

The Importance of a Well Written, Legally Compliant Employee Handbook

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS - President, Cavignac & Associates

One of the major exposures facing business owners today is employment related litigation brought by employees against the employer.  Allegations range from wrongful termination, to sexual harassment, to not getting a lunch break.  While many of these claims are frivolous, the cost to defend even a laughable allegation can be significant.While you can do everything […]

Design Professional Project Management, Pt. 1: Adding Value

by Dorothy Amundson, PWCA - Account Executive, Cavignac & Associates

In today’s highly competitive environment, your firm has to work towards educating your client to understand the value a design firm brings to their project. Fees for design professionals have eroded based on fierce competition and fewer projects. Project owners have taken advantage of these market conditions by demanding lower fees and pushing firms to […]

The Importance of Communication

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS - President, Cavignac & Associates

Communication, or lack of it, is the main reason design professionals get sued. After all, the only time we litigate a matter is when we stop talking to the other party, and pay someone else to talk for us (lawyers). Does everyone in your company have a clear understanding of the level of communication required of […]

Insurance Marketplace for Architects and Engineers

by Jeffrey Cavignac, CPCU, ARM, RPLU, CRIS, MLIS - President, Cavignac & Associates

The insurance industry is experiencing the tail end of a prolonged soft market.  Rates for most businesses have been coming down since 2002/2003, due mainly to excess capacity in the industry.  Insurance has always been supply driven, and as surplus goes up, rates come down.  Professional Liability for design professionals has been no exception.  Competition […]

Target Your Biggest Workers Compensation Claim Type

Target Your Biggest Workers Compensation Claim Type The National Council on Compensation Insurance’s (NCCI) 2010 analysis of claims and trends revealed a success story. The report, published August 2011 by NCCI, is entitled, “Workers Compensation Claim Frequency.” As more and more U.S. workers began using computer keyboards in the 1990s, the frequency and problem of […]

Plan Your Liability When You Plan Your Party

Plan Your Liability When You Plan Your Party The holiday season brings with it company-sponsored parties for employees and/or customers, and parties often mean the serving and consuming of alcoholic beverages. Before you plan your events this season, consider your liability. Can a business be held responsible for injuries or damages that result from serving […]

Insuring Electronic Data Processing Equipment

Insuring Electronic Data Processing Equipment Most businesses are computer-dependent. Only the smallest retailer can operate without a computer cash register. Embedded chips and computers operate manufacturing equipment, contractors’ equipment and equipment found in hospital operating rooms. Rather than insuring computers as office or manufacturing equipment, the Electronic Data Processing (EDP) form protects hardware, software, media […]

Disaster Recovery Plans Are Serious Business

Disaster Recovery Plans Are Serious Business No matter the size or type of your business, a disaster could occur that could seriously curtail or even shut down operations. If you’re office bound, you’re still vulnerable to such troubles as utilities loss or flooding from a faulty building system or tenant. Most technology related businesses feel […]