Check Subcontractors’ Insurance Policies
Did you know your firm can be held liable under your own workers’ comp policy if a subcontractor’s employee is injured? Courts have ruled time and again that if a company hires a subcontractor without coverage and an employee gets hurt on the job, the injured worker can seek coverage under the hiring company’s policy.
In many cases, an injured worker may even be a third- of fourth-level contractor, but if none of your subcontractors are carrying workers’ comp, a claim can hit your own policy. This scenario is even more likely if your firm, as the main contractor, has substantial control over the sub’s employees.
To determine coverage, courts generally start with the sub whose employee was injured and move up the chain until they find a valid workers’ comp policy.
Protect yourself by requiring your subcontractors to have a certificate of insurance. But don’t stop there; you should call the insurance carrier to see if the certificate is valid.
You can check also with your state’s contractor licensing to see if your subcontractor has workers’ comp coverage.
FAIR Plan Commercial Property Coverage Limits to Rise
California Insurance Commissioner Ricardo Lara has approved a request by the FAIR Plan to increase commercial property coverage limits.
The move is aimed at ensuring that commercial facilities insured by the FAIR Plan are not underinsured, which can be devastating if they suffer a total loss.
Under the new limit, the FAIR Plan will create a new “high-value” commercial property coverage option for larger housing developments, farms and businesses with multiple buildings at one location.
The new limits will be up to $20 million per building, with a total maximum limit of $100 million per location — up from the current limit of $20 million per location. The FAIR Plan must make these new coverage limits available to all eligible applicants for both new and renewal policies before July 26, 2025.
The decision comes as commercial property rates continue rising due to inflationary pressures, particularly for companies in areas considered urban-wildland interfaces.
Insurers have pulled back on underwriting commercial properties as well as homes in the state due to increasingly destructive wildfires and their inability to get rate increase requests approved by the Department of Insurance.
Businesses located in wildfire-prone areas and those in smaller towns have found it increasingly difficult to secure coverage. If they are unable to secure coverage with a private insurer, their only option is the FAIR Plan.
FAIR Plan policies are not a complete replacement of a commercial property insurance policy. These are named peril policies, which provides coverage only for damage caused by the specific causes of loss listed in the policy:
- Fire
- Lightning
- Internal explosion
Optional coverages are available at an additional cost, such as for vandalism and malicious mischief.
Comparatively, typical commercial policies offer the following:
Basic form policies. They provide the least coverage, and usually cover damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes and volcanoes.
Broad form policies. These policies usually cover the causes of loss included in the basic form, as well as damage from leaking appliances, structural collapses, falling objects and the weight of ice, sleet or snow.
If you must go to the FAIR Plan, we can arrange for a “differences in conditions” policy that will cover the areas in which the plan is deficient compared to a commercial property policy.
The FAIR Plan will cover the following commercial structures:
Habitational buildings — Buildings with five or more habitational units, such as apartment buildings, hotels or motels.
Retail establishments — Shops such as boutiques, salons, bakeries and convenience stores.
Manufacturing — Companies that manufacture most types of products.
Office buildings — Offices for professionals such as design firms, doctors, lawyers, architects, consultants or other office-based functions.
Buildings under construction — Residential and commercial buildings under construction from the ground up.
Farms and wineries — Basic property insurance for commercial farms, wineries and ranches, not including coverage for crops and livestock.
A final word
The higher limits will come as a relief to many businesses in California whose properties’ replacement costs far exceeded the FAIR Plan limits. That said, premiums remain high under the FAIR Plan.
Besides the FAIR Plan, there is another option if you can’t find coverage. We can try to find coverage in the “non-admitted” market, which consists of global insurance giants like Lloyd’s of London.
These entities are not licensed in California, but they can still cover properties in the state, which we can access through a surplus lines broker.
If Your Firm Is Sued for Discrimination, Act Fast to Check EEOC Complaint
Employers that are hit with a discrimination complaint must act fast to compare the allegations in the lawsuit to the earlier complaint the worker filed to the Equal Employment Opportunity Commission.
If the employer can find that the allegations in the complaint filed with the EEOC do not match those in the subsequent lawsuit filed by the worker, it can quickly move to have the case dismissed, but if it waits too long, it loses the chance.
Under procedural rules, employees filing suit under Title VII Title VII of the Civil Rights Act of 1964 must first file a complaint with the EEOC.
The decision that paved the way for this new procedural rule was a unanimous U.S. Supreme Court ruling in the case of Fort Bend County vs. Lois M. Davis in 2019.
The ruling means that employers that are sued for discrimination under Title VII have a limited amount of time to challenge the lawsuit if the allegations differ in any way from the original EEOC complaint. If they act fast, then they stand a good chance of convincing the court to throw out the complaint.
However, if an employer dawdles and waits too long to challenge the case if they find a discrepancy, they may lose the opportunity.
If the employer in this case had acted quickly, it would never have gone to the Supreme Court, legal experts say.
The case details
An IT worker in Texas had reported that her director was sexually harassing her, and after an investigation he was fired. But after that, her supervisors began retaliating by cutting back on her work responsibilities. She filed a charge with the EEOC and, while the charge was pending, she was told to report to work on a Sunday. She refused and went to church instead.
She tried to supplement her allegations and wrote the word “religion” by hand on her EEOC intake questionnaire, but she didn’t change her formal charge document by adding that word.
The case went to trial and was appealed, and then it was sent back to the local U.S. District Court to decide the remaining charge of religious discrimination. The case had been in the courts for three years at that point.
That’s when her former employer asserted that the District Court didn’t have jurisdiction of the case because she had failed to state the claim in her EEOC charge papers. That issue was taken all the way to the Supreme court, which wrote in its decision that an objection to a charge because of a discrepancy may be forfeited “if the party asserting the rule waited too long to raise the point.”
The takeaway
If your organization is the target of a discrimination lawsuit, make sure to check the original EEOC charge for any discrepancies. If there are any, you can consult with your lawyers about filing a motion to have the complaint dismissed.
Cargo Theft Surges: Smarter Criminals and How to Stop Them
Cargo theft in the U.S. is climbing at an alarming pace. After spiking nearly 50% in 2024, incidents are already up another 22% in early 2025, according to a new report from supply chain visibility firm Overhaul.
Criminals, both organized groups and opportunistic individuals, are not only stealing more — they’re getting smarter and more aggressive in how they do it. For companies that move, store, buy or sell goods, the risks are mounting.
High-value items like electronics and everyday essentials such as food and beverages are being targeted at every stage of the supply chain, and no mode of transport is immune.
Here’s a look at what’s driving the rise, how theft methods are evolving and what companies can do now to reduce their exposure.
A growing crisis
Criminals are casting a wide net across industries, but some sectors are being hit particularly hard:
- Food and beverages made up 32% of thefts, often due to large volumes and minimal security.
- Electronics followed at 22%, prized for being compact and high in value.
- Alcohol and tobacco represented 10%, commonly stolen for black-market resale.
Notably, a single freight theft incident can now top $1 million in losses, which prompted a record-high 90% of shippers to purchase theft insurance in 2024.
More elaborate schemes
What sets the current cargo theft wave apart is the growing sophistication of criminal strategies.
Traditional methods like truck burglaries and hijackings are still common, but a new wave of tactics has emerged, often involving deception, impersonation and inside jobs.
Here are the most common and fastest-growing methods:
Deceptive pickups: Thieves impersonate legitimate drivers, often using forged documents or stolen identities to trick warehouses into releasing cargo.
Facility theft: Criminals target unattended or poorly secured warehouses and distribution centers, often at night or on weekends.
Pilferage: Instead of stealing full truckloads, thieves now remove parts of shipments slowly and discreetly over time — often without detection.
Hijackings and coerced stops: Some thieves use false emergencies or warnings to get drivers to pull over, then rob the truck.
Commercial burglaries: Thieves target storage sites such as truck yards or facilities near rail lines.
Last-mile theft: Criminals steal shipments during final delivery, often from parcel couriers.
Driver collusion: In some cases, drivers are paid to stage a hijacking or hand over goods, making background checks and employee vetting essential.
How companies can fight back
While no system is foolproof, companies can take steps to protect their supply chains and minimize losses. A layered security approach is key, combining physical infrastructure, technology and training. Consider:
Fortifying warehouses and yards — Most thefts happen when cargo is unattended. Securing your facilities with fencing, lighting, surveillance cameras, access control and intrusion detection systems can prevent both opportunistic and planned attacks.
Auditing your vulnerabilities — Regular threat assessments help identify weak spots before criminals do. Use external security experts to test your defenses and ensure your protocols are up to date.
Vetting and training your team — Background checks and strict hiring practices can prevent inside jobs. Make sure your employees know how to verify drivers, recognize suspicious activity and respond appropriately.
Leveraging real-time technology — Telematics, GPS tracking and video monitoring can help you monitor cargo in transit and respond quickly to threats. Visibility platforms also help spot early warning signs of theft, like route deviations or unscheduled stops.
Using secure protocols at every handoff — With impersonation and fake pickups rising, it’s critical to verify identities, use two-step authentication for pickups and document every transfer of goods thoroughly.
OSHA Finalizes Rule Requiring Construction PPE to “Properly Fit’ All Workers
Fed-OSHA has finalized a new regulation that requires personal protective equipment for construction workers to be properly fitting.
The lack of access to properly fitting PPE for smaller-framed construction workers — especially women — has been a perennial problem, as ill-fitting gear may not protect employees adequately in case of an incident. The new standard explicitly states that PPE must fit properly to protect workers from workplace hazards.
Often, the industry has just purchased smaller gear for female workers, but that hasn’t worked well because women’s bodies have more variations in size and shape.
What the new standard says
While the new standard does not define what a “proper fit” is, OSHA, in its proposal of the standard, clarified that the phrase means “the PPE is the appropriate size to provide an employee with the necessary protection from hazards and does not create additional safety and health hazards arising from being either too small or too large.”
Under the new rule, construction employers will be required to provide PPE in various sizes and designs that accommodate a diverse workforce. It requires that they assess the fit of PPE for each worker individually. The fit must address different body shapes, proportions and size and applies to all types of PPE, such as:
- Hard hats
- Gloves
- Goggles and safety glasses
- Safety shoes
- Helmets
- Harnesses
- Coveralls
- Vests
- Respirators
- Hearing protection devices
- Boots
The rule applies to PPE that an employer provides to its workers, as well as PPE purchased directly by a worker for personal use.
Employers are also required to incorporate the importance of properly fitting PPE into their training regimens, including:
- Guiding workers on how to adjust the equipment,
- How to recognize when PPE is ill-fitting and
- How to request replacement gear if a worker’s PPE does not fit.
Record-keeping is also required. To comply, construction employers should maintain comprehensive records of their PPE compliance efforts, including documenting:
- PPE assessments,
- Inspections,
- Training sessions and
- Any instances where PPE was replaced or adjusted for proper fit.
The standard applies to all construction companies; there are no exceptions based on size.
Dangers of ill-fitting PPE
- Sleeves of protective clothing that are too long or gloves that do not fit properly may make it difficult to use tools or control equipment, putting other workers at risk of exposure to hazards.
- The legs of a protective garment that are too long could cause tripping hazards and affect others working near the wearer.
- A loose harness when working at elevations may not properly suppress a person’s fall and may get caught up in scaffolding and equipment.
- Goggles worn by an employee with a small face may leave gaps at the temples, allowing flying debris from a machine to enter the eyes.
- Gloves that are too large have a number of issues: the fingers are too long and too wide, the palm area is too big and the cuffs allow sawdust to fill the fingers. Someone wearing such ill-fitting gloves risks getting their fingers caught in machinery or pinched when stacking or carrying lumber.
The takeaway
Manufacturers already make PPE in various sizes, but finding properly fitting PPE for workers may be difficult.
Fortunately, The Center for Construction Research and Training has created a list of manufacturers and suppliers of PPE for female, nonbinary and transgender workers. It includes links to firms that focus specifically on women’s wear and the products they offer.
FAIR Plan increases Commercial Property Limits
California Insurance Commissioner Ricardo Lara has approved a request by the FAIR Plan to increase commercial property coverage limits.
The move is aimed at ensuring that commercial facilities insured by the FAIR Plan are not underinsured, which can be devastating if they suffer a total loss.
Under the new limit, the FAIR Plan will create a new “high-value” commercial property coverage option for larger housing developments, farms and businesses with multiple buildings at one location.
The new limits will be up to $20 million per building, with a total maximum limit of $100 million per location — up from the current limit of $20 million per location. The FAIR Plan must make these new coverage limits available to all eligible applicants for both new and renewal policies before July 26, 2025.
The decision comes as commercial property rates continue rising due to inflationary pressures, particularly for companies in areas considered urban-wildland interfaces.
Insurers have pulled back on underwriting commercial properties as well as homes in the state due to increasingly destructive wildfires and their inability to get rate increase requests approved by the Department of Insurance.
Businesses located in wildfire-prone areas and those in smaller towns have found it increasingly difficult to secure coverage. If they are unable to secure coverage with a private insurer, their only option is the FAIR Plan.
FAIR Plan policies are not a complete replacement of a commercial property insurance policy. These are named peril policies, which provides coverage only for damage caused by the specific causes of loss listed in the policy:
- Fire
- Lightning
- Internal explosion
Optional coverages are available at an additional cost, such as for vandalism and malicious mischief.
Comparatively, typical commercial policies offer the following:
Basic form policies. They provide the least coverage, and usually cover damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes and volcanoes.
Broad form policies. These policies usually cover the causes of loss included in the basic form, as well as damage from leaking appliances, structural collapses, falling objects and the weight of ice, sleet or snow.
If you must go to the FAIR Plan, we can arrange for a “differences in conditions” policy that will cover the areas in which the plan is deficient compared to a commercial property policy.
The FAIR Plan will cover the following commercial structures:
Habitational buildings — Buildings with five or more habitational units, such as apartment buildings, hotels or motels.
Retail establishments — Shops such as boutiques, salons, bakeries and convenience stores.
Manufacturing — Companies that manufacture most types of products.
Office buildings — Offices for professionals such as design firms, doctors, lawyers, architects, consultants or other office-based functions.
Buildings under construction — Residential and commercial buildings under construction from the ground up.
Farms and wineries — Basic property insurance for commercial farms, wineries and ranches, not including coverage for crops and livestock.
A final word
The higher limits will come as a relief to many businesses in California whose properties’ replacement costs far exceeded the FAIR Plan limits. That said, premiums remain high under the FAIR Plan.
Besides the FAIR Plan, there is another option if you can’t find coverage. We can try to find coverage in the “non-admitted” market, which consists of global insurance giants like Lloyd’s of London.
These entities are not licensed in California, but they can still cover properties in the state, which we can access through a surplus lines broker.
Treasury Dept Suspends Beneficial Ownership Reporting Rule
The U.S. Treasury Department has announced that it will not enforce a law requiring most businesses with fewer than 20 employees and less than $5 million in annual revenue to report ownership and control information to the federal government every year.
The Corporate Transparency Act required firms to file this information by Jan. 1, 2025, under the threat of a maximum civil penalty of $500 per day (up to $10,000) and up to two years in prison.
The Treasury Department said that it would not enforce any penalties or fines associated with the beneficial ownership information reporting rule on any companies that missed the Jan. 1 deadline. As well, it will not enforce penalties going forward for companies that fail to file their BOI report.
While the Trump administration cannot repeal the CTA, it is instead opting not to enforce it and plans to introduce new regulations that would essentially eliminate enforcement of the law for U.S. businesses.
The act explained
The CTA aimed to crack down on fraud, money laundering and terrorism funding that can run through anonymous business entities.
Under the act, businesses with 20 workers and less than $5 million in revenue were required to file reports identifying their “beneficial owners,” defined as individuals who own or control 25% or more of the equity interest of a company or who exercise “substantial control over its management or operations.”
There were some exemptions to the reporting requirement, including stock brokerages, banks and other financial institutions, insurance companies, accounting firms, public agencies and non-profits.
It’s estimated that the law affected some 32 million small businesses .
What’s next
The Treasury Department will issue a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. A “foreign reporting company” refers to any entity formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction.
Legal experts recommend that affected companies which have not yet filed an initial, updated or corrected report may consider waiting to file a BOI report until new guidance is issued by the Treasury Department, as no penalties or fines will be enforced for failing to file reports for now.
The department’s action may face legal challenges, or the present or a subsequent administration could restore the reporting requirements as the law remains on the books.
More Contractors Increase Deductibles to Reduce Insurance Premiums
As construction projects become larger and more complicated, contractors are taking on more of the risk by increasing their builder’s risk insurance deductibles, according to a recent report.
Michael Cusack, executive vice president of insurance broker Alliant Specialty, told Insurance Business magazine that contractors are willing to take on more of the risk as those that have strong internal risk management regimens will be rewarded with lower premiums, particularly if they can stave off expensive claims.
There are a number of factors at play that are driving this transfer of risk:
- Claims costs are skyrocketing as the cost of rebuilding and materials has continued rising.
- Increasing litigation.
- Larger and larger liability lawsuit settlements and jury awards, and an increase in “nuclear” verdicts of $10 million and more.
“Contractors are taking on more deductible risk and manage that risk effectively using in-house protocols, and the ones that can do that will be the most successful,” Cusack told the trade publication.
“Construction jobs are getting much bigger, and the risks are becoming more complicated. If contractors can develop the systems and the personnel to manage risk, they can do it more efficiently and therefore be rewarded for that,” he explained.
The reason that you carry contractor insurance coverage in the first place is to protect your business from an accident or incident that could be financially devastating, such as a fire that wipes out all of your progress and destroys the materials and supplies that you had stored on-site.
Considerations
Increasing a deductible obviously comes with risk, particularly if you end up having multiple claims.
Raising your deductible amounts can be a smart business move that saves you money on your monthly or yearly premium payments. The extra money can help you grow your business, invest in new equipment, and even increase your available cash flow. But the best use of the extra cash is to create a contingency fund that you can draw on in case you incur a claim.
If you are comfortable assuming some additional risk yourself, and have resources you can draw on if they’re needed, talk to us about the possibility of raising your deductible. If the savings are enough to cover the deductibles on one or two claims, it may be worth making the change.
To make taking on more risk financially viable, you’ll have to prioritize risk management at your worksites. Emphasize the importance of safety to your supervisors, crew members and subcontractors.
By conducting regular safety training, providing personal protective equipment and strictly enforcing safe work practices, you can reduce the risk of on-site accidents and minimize damage and injury claims.
One other major risk to contractors is theft and vandalism. To lower this risk, builders have been erecting fences and walls around worksites since the dawn of construction. Today, there are cost-effective solutions to increase site security and reduce risks, such as:
- Online cameras and smart sensors on the job site can enable continuous monitoring for unauthorized access, unlawful activities, CO2 levels and real-time water leak detection systems like WINT’s water intelligence platform.
- Adequate lighting is much cheaper to procure, and built-in motion sensors can help save energy (while deterring potential trespassers to the site).
- GPS tracking tags on vehicles, equipment and even valuable materials can make it easier to recover them if they are stolen.
- Mobile applications for your workforce management can be a helpful tool in creating ongoing and interactive safety training, and risk-reporting programs to reduce the risks of human error and negligence.
Talk to us first
Builder’s risk premium calculations can be complex, and taking the step to increase your deductible has to be done with forethought and care.
Call us to review your policies before renewal and we can do a deep dive into your policy and risk management practices to see if increasing your deductible is a good move for you.
Businesses Struggle with Risk Protection Gaps
Nearly half of middle-market businesses feel unprepared for key threats despite implementing various risk management strategies, according to Nationwide Insurance’s latest “Agency Forward” survey.
The survey found that while 90% of businesses have formal risk management policies that are reviewed regularly, 21% lack a business continuity plan, leaving them exposed to potential disruptions that could severely impact their operations.
Additionally, 45% lack a disaster preparedness plan, and only half have a fleet safety program in place.
These shortfalls create vulnerabilities that could lead to financial and operational setbacks.
The survey found that companies allocate an average of 6% of their budgets to risk management and safety. Industries with higher risk exposure, such as construction and manufacturing, dedicate a larger share — 19% and 13%, respectively.
Key business concerns
Middle-market businesses identified their top risks over the next two years as:
- Costs and finances (42%),
- Economic and regulatory factors (40%), and
- Technological disruption (26%).
Economic downturns, supply chain disruptions, cyber-security threats and regulatory changes are the most pressing risk management priorities, each cited by 42% of respondents. However, only 5% of businesses listed natural disasters as a risk management priority, which could be a blind spot given recent climate-related disasters affecting various industries.
Leveraging technology
Technology is playing an increasingly important role in risk management, with 76% of surveyed businesses utilizing some form of digital solution.
Owners reported improved efficiency and compliance to regulations, enhanced data analysis and reporting, and better real-time monitoring of risks as a result of their technology use.
While only 11% have fully integrated technology into all aspects of risk management, 65% use it selectively.
The most common digital tools include:
- Cyber-security solutions (78%),
- Compliance and reporting software (67%), and
- Supply chain management software (58%).
However, technological adoption is not without challenges. Business owners cite the cost of safety measures (38%), maintenance of safety equipment and technology (31%) and keeping up with evolving safety standards (30%) as significant barriers to effective risk management.
How companies can better manage risk
To close these protection gaps and strengthen their resilience, mid-market businesses should consider the following strategies:
- Develop a comprehensive business continuity plan — Organizations without a continuity plan should work with risk management professionals to create one, ensuring they have a roadmap for responding to disruptions.
- Review the company’s compliance with regulations and laws — It’s important that your human resources team stays on top of regulations and legislation to ensure the organization doesn’t run afoul of them, which can result in penalties and fines.
- Enhance disaster preparedness — Natural disasters may be a low priority for many businesses, but proactive planning can prevent severe financial and operational consequences. Developing an emergency response plan can help mitigate potential damage.
- Analyze workplace accident data — Managing workplace safety is key to any company’s risk-management efforts. You should track incidents and thoroughly investigate each accident or near miss to find out what led to the event.
- Invest in technology for risk mitigation — Consider expanding your use of AI, predictive analytics and cloud-based risk management platforms to identify and address vulnerabilities before they become major issues.
- Regularly review and update risk management policies —As regulations and business risks evolve, you should regularly assess your policies to ensure they remain effective and aligned with industry best practices.
- Integrate risk management with business strategy — Risk management should not be seen as a separate function but as a core component of business success. Leaders should align their risk strategies with company objectives to ensure a seamless approach to resilience.