Presentation given to the Indoor Air Quality Members at the 15th annual expo in Los Vegas, NV. Insurance Issues for IAQA Members – What You Really Need To Know To Protect Your Company, Employees & Customers.

1. Insurance Issues for IAQA Members – What
You Really Need To Know To Protect Your
Company, Employees, and Customers
Presented By:
Richard W. Shaw, Jr., CPCU, ARM
Vice President – CBIZ Insurance Services, Inc.

3. Agenda
• Introduction – Richard Shaw
• Insurance Primer
• The Risk Management Process – How Can You Implement A Risk
Management Program?
• Contractual Requirements for IAQA Members
• New Licensing Requirements for Mold Related Activities
• Other Statutory Insurance Issues Facing IAQA Members
• Evaluation Of Your Insurance Carrier – Will They Be Around To Pay a
Claim?
• Insurance Market Trends – 2012 and Beyond

4. About Richard Shaw
Richard Shaw is a Vice President with CBIZ Insurance Services, Inc.
which is a national insurance brokerage and business services
company. Richard has over 25 years of experience in commercial
insurance and has earned the CPCU and ARM insurance
designations. Richard is a graduate of the University of Maryland
and is active in a number of trade and professional organizations.
He has been a frequent presented for the Baltimore Association of
Subcontractors and the International Kitchen Exhaust Cleaning
Association

5. Insurance Primer

6. General Liability
• Covers bodily injury and property damage to a
3rd party.
• Essential to any business
• Required by virtually any contract or lease
• Includes defense costs (should be outside of
the policy limits)
• Covers your negligence

8. Professional Liability
• Covers professional services and related errors
& omissions (such as failure to perform)
• Scope of coverage depends on the type of
work being performed
• Defense costs are typically included in the
policy limit

9. Environmental Insurance
• Covers exposures related to remediation or
release of pollutants.
• Mold coverage can be provided under an
environmental policy.
• Can be written with professional and general
liability under a single policy.

11. Property
• Covers 1st party (what you own, occupy, or have
possession of/responsible for) exposures.
• Protects you against losses to your buildings,
personal property, stock, and tenant
improvements.
• Can include loss of business income and extra
expense

12. Inland Marine
• Covers mobile equipment you own, lease, or
rent that can be out in the field or in transit.
• Protects things such as tools, any monitoring
equipment, generators, etc.
• Can also include an installation floater or
builders risk for renovation or new
construction work.

13. Crime (1st & 3 rd Party)
• 1st Party covers theft of something of yours by
your own employees – such as embezzlement
or theft of property
• 3rd Party covers theft from your employees of
something belonging to your customer

14. Workers Compensation
• Covers employees under statutory regulations
for all States you operate in.
• Includes medical expenses, lost wages, and
rehabilitation.

16. Automobile
• Covers vehicles you own or lease for bodily
and property damage to a 3rd party.
• Covers damage to or theft of your vehicle.
• Covers hired and non owned vehicles,
including excess liability for vehicles owned by
employees use for company business

18. Umbrella
• Provides an “umbrella” of additional liability
limits
• Typically covers over general liability, auto
liability, and employers liability
• Can also cover over professional and
environmental liability

19. Other Insurance
• Employment Practices Liability – covers
discrimination and harassment
• Cyber Liability – covers technology and 3rd
party computer risks.
• Fiduciary Liability – protects trustee(s) of
company retirement and 401 (k) plans

20. The Risk Management Process – How
Can You Implement A Risk
Management Program?

22. Indentify Risks – What Risks Are Out
There?
• Physical risks associated with your office
• Job related risks to general public (people and
property)
• Contractual risks – what you have
signed/committed too
• Environmental risks
• Risks of use of automobiles
• Risks to employees

23. Assessment of Risks – How Likely
Something Is To Occur?
• Use of business experience – what can and
has happened to you or a peer company.
• Use of actuarial data – from insurance
company
• Use of data from IAQA – White Papers
• Local geographic data – Flood, fire,
earthquake, and the legal climate

25. Evaluate Potential Consequences –
What is The Worst Case Scenario?
• Cost vs. Risk – what can you afford to pay and
what can you afford to retain?
• Understanding the exposures inherent in your
business – How bad can the worst case
scenario be?

26. Design Program –Best Ways To
Deal With Risk
• Retention of risk – self insure or partially self
insure
• Insurance – transfer of risk to an insurance
carrier
• Contractual transfer – transfer or limiting risk
through a contract

27. Implement Program
• Figure out the best method to protect your
company.
• Where you take risk try to eliminate or
minimize it.
• Best use of Cost vs. Risk

29. Contractual Requirements For
IAQA Members

30. Typical Requirements – Insurance And
Indemnification
• General Liability
• Workers Compensation
• Automobile Liability
• Environmental
• Umbrella
• Hold Harmless & Indemnification

32. What These Requirements Mean To
IAQA Members
• Meet IAQA requirements
• Meet Statutory requirements
• Protect IAQA member company
• Protect IAQA customer and general public

33. How To Review Those Requirements
• Have your insurance agent review the
insurance requirements in contracts and
statutory (licensing) documents – verify
correct coverage and limits
• Have indemnification and hold harmless
wording reviewed – How far does it go and
does it extend beyond your insurance?

34. What Does A Certificate Of Insurance
Really Mean?
• It is not a contract or an insurance policy
• It reflects coverage in place at the time the
document is generated
• It is NOT proof insurance is in place for the
full-term
• Should be used in conjunction with a contract

35. What Should The Requirements Be For
Work You Subcontract Out?
• Not less than what you are required to carry
for the same job
• Any work you subcontract out becomes your
work if the sub’s insurance is inadequate or
not in effect
• The IAQA member must be named as an
additional insured

37. How Do You Get Subcontractors To
Comply?
• No compliance = No work
• No compliance = No payment
• No compliance = Find another subcontractor

38. New Licensing Requirements For Mold
Related Activities (Virginia, Florida, &
Other States)

40. What Are The Requirements For
Mold Licensing?
• There are requirements, depending on the
State, for errors & omissions and/or
environmental coverage
• Requirements depend on whether the
applicant is an assessor or if they do
remediation work
• Typically require a $1,000,000 limit

42. Other Statutory Insurance Issues
Facing IAQA Members

43. Workers’ Compensation And
Employers Liability
• Many States are viewing “independent
contractors” much more closely. Department of
Labor requirements are frequently being followed
by the workers compensation carriers.
• You must have the proper documentation or risk
being charged, at audit, for uninsured
subcontractors. They will charge you as if it was
direct labor.

44. Auto Insurance
• Each State has it’s own legal requirements for
the limit of liability insurance – most are very
low
• Contractual requirements will likely exceed
statutory requirements

46. Evaluation Of Your Insurance Carrier –
Will They Be Around To Pay A Claim?

47. What Is Admitted Versus Non-
Admitted?
• An admitted carrier is licensed in the State and pays
into the insolvency fund. Typically they are “name”
carriers like Hartford, Fireman’s Fund and Travelers.
They are required to file rates and forms with every
state the operate in.
• A non-admitted carrier is licensed in the State but does
not pay into the insolvency fund, nor do they file rates
or policy forms. There are taxes and fees associated
with doing business with this type of company.
Examples are Lloyds of London and Scottsdale.

48. What Is The A.M. Best Rating And Why
Is It Important?
• A.M. Best is a rating bureau that evaluates the
financial position of insurance companies
versus their peer companies.
• They give ratings for strength and a different
rating for size.
• Many contracts require a minimum A.M. Best
rating.

49. Insurance Market Trends – 2012
And Beyond

50. What Is The Difference Between A
Hard And Soft Market?
• A soft market, which we are currently coming
out of, has premiums going down, more
capacity for coverage, and more carriers
willing to write business.
• A hard market has premiums going up, less
capacity for coverage, and less carriers willing
to write business.

51. Where Is Pricing Going?
• Pricing has leveled off or started to go up
• The rating bureau, Fitch Ratings, Inc., is
predicting premium growth in 2012

52. Availability Of Coverage For IAQA
Members
• Coverage should continue to be available for
IAQA members with good loss experience
• Expect carriers to begin to perform more
thorough underwriting and try to get higher
premiums or get off risks they deem as
unacceptable

53. Questions?
Richard W. Shaw, Jr.
Vice President/Sales Professional
CBIZ Insurance Services, Inc.
rshaw@cbiz.com
www.linkedin.com/in/richardshawcbiz

54. Thank You!