THE BASICS. Michael A. Mason, CIC, ARM

Transcription

1 THE BASICS Michael A. Mason, CIC, ARM

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3 This insurance is designed to protect your business in the event owned property is lost, stolen or damaged. Different policies protect against different risks and perils.

4 This insurance coverage insures your business in the event of accidents and injury that might occur on your premises and exposures related to your products or services. It will protect your business from possible large settlements for bodily injury or property damage to a third party and for medical expenses accruing to the underlying incident.

5 A commercial auto insurance policy serves as protection against liability for bodily injury and property damage relative to your ownership, maintenance, or use of vehicles involved in doing business. Your business may also need "hired and non-owned " auto liability coverage for vehicles your employees use or that you rent or borrow.

6 Workers' compensation insurance protects an employer from liability for an accident involving an employee. The insurance coverage pays benefits to your employees if they are injured on the job. It will cover their medical bills, a portion of lost wages, vocational rehabilitation, and death benefits.

7 Financial Strength Rating Admitted or Non-admitted Financial Size Category Limits Special Forms Special Endorsements (Policy Changes) Maintenance Period

8 CERTIFICATE HOLDER DESCRIPTION INSURANCE COMPANIES LIMITS POLICY NUMBERS NOTE DISCLAIMER AT TOP OF CERTIFICATE

9 READ YOUR CONTRACT!! READ YOUR CONTRACT!! READ YOUR CONTRACT!! READ YOUR CONTRACT!!

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11 A surety bond is a contract among at least three parties: The OBLIGEE - the party who is the recipient of an obligation The PRINCIPAL - the primary party who will be performing the contractual obligation The SURETY - who assures the obligee that the principal can perform the task

12 Commercial bonds represent the broad range of bond types that do not fit the classification of contract. They are generally divided into four sub-types: license and permit, court, public official, and miscellaneous.

13 Contract Bonds, used heavily in the construction industry, are a guarantee from a Surety to a project's owner (Obligee) that a general contractor (Principal) will adhere to the provisions of a contract. Included in this category are: BID BONDS A guarantee that a contractor will enter into a contract if awarded the bid. PERFORMANCE BONDS - A guarantee that a contractor will perform the work as specified by the contract. PAYMENT BONDS A guarantee that a contractor will pay for services and materials. MAINTENANCE BONDS A guarantee that a contractor will provide facility repair and upkeep for a specified period of time.

14 PRINCIPAL SURETY COMPANY OBLIGEE AMOUNT

15 REQUIREMENTS TO NOTE: BID SPECS, SUBS, RETAINAGE, MAINTENANCE PERIOD, LIQUIDATED DAMAGES, AND BOND PERCENTAGE. DEPENDING ON SIZE AND COMPLEXITY THEY MAY ALSO WANT: PERSONAL FINANCIALS, COMPANY FINANCIALS OR COMPLETE APPLICATIONS

16 PRINCIPAL SURETY COMPANY OBLIGEE AMOUNT PAY LABOR, MATERIALS, & SUBS SIGNED SEALED POWER OF ATTORNEY

17 PRINCIPAL SURETY COMPANY OBLIGEE AMOUNT PERFORMANCE OF WORK ACCORDING TO CONTRACT, PLANS, & SPECS SIGNED SEALED POWER OF ATTORNEY

18 ITEMS TO NOTE: EXCLUDED TYPES OF CONTRACTS CONTRACT LIMITS GENERAL INDEMNITY AGREEMENT MUST BE SIGN BY ALL STOCKHOLDERS/OWNERS AND THIER SPOUSES HIGHER RATES SOCIAL SECURITY NUMBERS REQUESTED BOND PERCENTAGE SPECIFIC FORMS? PENALTIES?

19 ITEMS TO NOTE: SPECIFIC FORMS? PENALTIES?

20 CASH CREDIT CAPACITY CHARACTOR

21 ITEMS TO NOTE: INDEMNIFY MEANS TO MAKE WHOLE THIS IS A LEGAL CONTRACT SIGNED BY AUTHORIZED COMPANY REPRESENTITIVE SIGNED BY ALL PRINCIPALS AND SPOUSES

22 ITEMS TO NOTE: WHO IS A PRINCIPAL PERSONS, ENTITIES, JOINTLY OR SEVERALLY, SUCCESSORS IN INTEREST, ALONE OR JOINT VENTURE WITH OTHERS (NAMED OR NOT) ANY ENTITY THAT CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES.

23 ITEMS TO NOTE: INDEMNITY PRINCIPAL AGREES TO INDEMNIFY AND SAVE HARMLESS SURETY FROM AND AGAINST ALL DEMANDS, CLAIMS, LIABILITIES, COSTS, LOSSES, PENALTIES, OBLIGATIONS, INTEREST, DAMAGES, AND EXPENSES OF WHATEVER KIND AND NATURE PRINCIPAL AGREES TO PAY BOND PREMIUMS

24 SURETY HAS THE RIGHT TO INDEMNITY REGARDLESS OF WHETHER THE SURETY HAS MADE ANY PAYMENT UNDER ANY BOND *SURETY MAY DECLINE TO EXECUTE ANY BOND FOR ANY REASON AND SHALL NOT BE LIABLE TO PRINCIPAL

25 READ YOUR CONTRACT!! READ YOUR CONTRACT!! READ YOUR CONTRACT!! READ THE INDEMNITY AGREEMENT

26 QUESTIONS?