Summer will be coming to an end and the long sunlit days will give way to fall leaves, cloudy skies, and cool weather. And we love it!
It is a Washingtonian secret that the Autumn season in the Pacific Northwest is the best place to be in the entire country. What are your favorite spots to visit in the fall? Personally, we are big fans of taking the RV out to the Columbia Gorge or strolling on the beach in Neah Bay.
Where are you heading this fall? Hit reply and let me know!
In today’s edition:
Insurance audit requests from carriers.
A new way to obtain contractor bonds with us.
Truck talk: Certificate holders vs. additional insured.
The difference between replacement cost and actual cash value.
Insurance audit requests
Many businesses have changed in some way over the last 12 months. These changes could be small or could be drastic. These changes could impact your general liability and workers' compensation insurance. More than ever insurance companies are auditing their policies with businesses due to potential changes due to the ongoing pandemic.
It is crucial to complete any audit request in a timely manner. If not completed, the insurance company may perform a forced placed audit, which may come with a premium increase. If there is a dispute after the forced placed audit, the dispute process could take up to 8 weeks.
Please pay attention to any request for an audit from your insurance company. If you receive such a request, we are here to help! Don’t hesitate to contact your local agent at Cross Insurance for assistance through the process.
— Celia Cross, Commercial Lines Lead and Account Manager
Share with a colleague, get entered to win.
Each newsletter we give away special Cross Insurance Agency gear for sharing with friends, family, and anyone else who could benefit. To enter, click one of the buttons below and share. Be sure to tag us on your post or CC us in your email. You will receive an entry in our giveaway for every mention, with the winner announced in our next newsletter.
No purchase or registration is necessary. Participation isn’t a guarantee of winning.
Contractor bonds made easy
In Washington State, contractors must be registered with the Department of Labor & Industries, carry a bond, and be insured to do business. Contractors looking for a bond, also called a surety bond, have two options. Depending on the work you will be performing, you may need to obtain a general or specialty contractor bond depending on your license type. The amounts are:
$12,000 for general contractors
$6,000 for specialty contractors
Good news! We have added a simple, secure, and fast way to obtain a contractor’s bond right on our website. Any time day or night, weekday, or weekend, you can choose the right bond for your business from any web browser.
Click the button below to read our guide to contractor bonds and how to get started with our online bonds portal.
Depending on the contract, the company or broker you are hauling for might need to be added as an additional insured or request to be a certificate holder.
A certificate holder is similar to asking for proof of insurance. If you receive a request to provide a certificate of insurance; the requestor is requiring proof of your liability limits, cargo coverage, and more to verify you meet the insurance minimum for the job. In some cases, the requestor will want to ensure that a certain item is not excluded from the policy, such as frozen seafood. Requesting a certificate costs nothing and is easy with our online client portal!
If the requestor requires to be added as an additional insured, this means that you are saying, by written contract, that you are agreeing that if there is a claim that your insurance company is going to provide protection for them as well. There might be an additional cost that can come with submitting an additional insured. This is because the insurance company is now not only defending you in the case of a claim, but they're also defending that party who you have listed as an additional insured.
Whether you need a certificate or an additional insured, it's all about the contract and is critical it is done correctly. If you encounter one of these requests, please send a copy of the contract so we can make sure that the insurance is following their guidelines.
All insurance policies include a basis of settlement section, which will tell you if the insurer pays Actual Cash Value “ACV” or Replacement Cost “RC” for the property or items that have been damaged or lost as a result of a covered claims event. The difference between these two settlement types could result in a serious swing in the payout received in the event of a claim.
In general, Actual Cash Value is determined at the time of a loss by evaluating the cost to repair or replace the item less depreciation. Essentially, this is the item's value in its most recent condition, not the full cost to replace it. One way to think of ACV is “garage sale pricing.” For example, if one of your old, large table saws was stolen out of your shop, actual cash value would pay the depreciative value for the item, (the cost to replace with the same age, condition, and model) not how much it would cost to purchase a new saw. Unfortunately, this means you will more than likely have to come up with additional funds out-of-pocket for the difference in cost to replace it.
The other option is Replacement Cost, which provides the amount to replace the item with a similar quality item. This is an important distinction, especially if the items you are insuring are critical to your business and come with a high cost to replace. Keep in mind that with the RC settlement, many policies will require you to replace the item yourself, then submit the proof of purchase price in order to receive the payment. The terms could be different for your policy, so be sure to check with your agent first before assuming your coverage options.
Regardless of coverage, we recommend that you keep a thorough list of all items and their values. Having a complete list – including a description, cost, quantity, and a photo – will help maximize your payment for items lost in a claim. Of course, this doesn’t mean you need to have it on everything, but any high-value tools, equipment, or gear should be on your list.
Figuring all this out on your own is tricky, which is why we want to help. Coverage options, processes, and payments differ not just from insurance carrier to carrier but also policy to policy. An insurance policy for contractors will be different for farmers, which will be different for truckers. Fortunately, we have experts in all the above to help you through your options. Give us a call! Below you will find our commercial insurance team, along with their specialties.