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Customer Spotlight |
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The CIG customer spotlight for this issue is Forshee Painting, Inc. Dennis Forshee opened Forshee Painting in Wichita back in 1995. With over 25 years of industry experience, Dennis has grown his business to over 90 employees and has applied paint coatings on various projects for customers such as Boeing, Walgreens, Haysville School District and Tabor College among many other businesses in and around the Wichita area. In the past thirteen years, Dennis has expanded his business to a new location, added a veteran staff of estimators and field supervisors along with an experienced painting workforce to help grow this already prospering business. Forshee Painting specializes in commercial coatings application as well as all residential interior and exterior projects. For all you commercial or residential painting needs, please contact Dennis at 316-263-7777.
Thanks for your business Dennis!
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Meet Linda and Paula, the newest members of the CIG team! |
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Our newest employees just joined CIG this month. Paula (right) is now one of our Customer Service Representatives and Linda is a Commercial Accounts processor.
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Work Comp Rate Stabilization
Fact or Fiction?
Over the past 24-36 months, the majority of business owners, especially those with favorable work comp loss ratios, have been the recipient of stable or decreasing work comp rates.
The Kansas Insurance Department along with it's actuarial staff, research and approve the BASE RATES for all work comp class codes used in the state. While the National Council on Compensation Insurance "NCCI" establishes the eligibility for each class code, those codes with favorable loss ratios receive rate reductions while those with excessive loss ratios are penalized and receive higher adjusted rates.
Each year the staff here at CIG compares base rates for the top 50 class codes in Kansas. This comparison can be seen by clicking here. It is very interesting to note that there are 23 class codes which receive increases in excess of 5%. Very few of the top 20 class codes have received rate reductions. Please remember there is a second component of the pricing factor- Loss cost Multipliers. Find this a little confusing? We will be holding work comp rate and experience modification workshops throughout 2008. If you have any immediate questions,  please feel free to contact any of our staff.
Again we appreciate your time in reading this newsletter, please drop us a line on any topics you would like to read about.
Thanks
Chock Chapple |
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The ABC's of Surety
by Lance Spence, Vice President |
Although surety is an ancient concept, its primary objective today can be stated simply: performing a service for qualified individuals whose affairs require a guarantor. And, a surety bond is a three party instrument by which one party guarantees or promises a second party the successful performance of a third party. 
Since the Miller Act of 1935 was enacted, all United States federal public works projects in excess of $100,000 have required performance and payment protection in the form of a surety bond, and, over the years, almost all 50 states have followed suit. Therefore, all contractors performing work on public projects must be able to demonstrate the ability to be bonded in order to secure this work.
However, obtaining surety credit is not as easy as it sounds. In order for a contractor to post a bond executed by an authorized surety company, they must undergo an extensive underwriting process emphasizing their "Three Cs" - Capital, Capacity and Character.
In most cases, to thoroughly underwrite a contractor's financial strength, ability and commitment, a surety company will need to review the following information:
¦ Personal & corporate indemnity
¦ Independently prepared financial statements within 90 days
¦ Audited, or at least, reviewed financial statements for the most current fiscal year end plus the prior two
¦ An interim financial statement (P&L and Balance sheets)
¦ Current aging of accounts receivable and accounts payable
¦ Analysis of overhead costs
¦ Equipment schedules
¦ Outline of complete bank agreements (line of credit, turnaround to collect, etc)
¦ Current work-in-progress
¦ Statement of Qualifications including list of largest/similar projects completed
¦ Resumes of key employees
¦ Contingency plans
The Construction Risk Services team of professionals at Commercial Insurance Group understands the ABCs of surety and is ready help you secure invaluable public works projects.
Lance Spence is vice president, specializing in risk management and surety bond programs for the construction industry. He can be contacted at lspence@cigcorp.com or 316.440.3504
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Homebuilding Programs on the Rise
By Brent Wasson, Vice President Construction Risk Services
Until recently, the homebuilding trade has always been an "easier said than done" risk to place in the standard insurance market. However, with the tightening of the legal system, the insulation of Kansas from coastal exposures and the continued softening of the insurance marketplace, insurance companies are broadening the scope of risks they are considering and new programs are becoming more readily available. 
In recent months, insurance companies have rolled out new programs for home builders that provide products and completed operations coverage for subcontracted work as well as other enhancements that the direct writer insurance companies may not offer policy holders. Among the coverages included in these programs are General Liability, Property, Inland Marine, Workers Compensation and Excess Liability. While there are certain qualifications within these programs that all builders may not meet, this is a positive step for the insurance market, which increases the capacity to cover this previously avoided industry.
Furthermore, by working with the team of professionals in our Construction Risk Services unit, there are a variety of ways our customers can save premium dollars. A sampling of loss control measure are as follows:
At Commercial Insurance Group, our Construction Risk Services team is committed to and focused on this highly exposed industry. We possess the expertise, experience and understanding of the construction industry needed to ensure that our customers are properly insured and that their annual premiums the best the market has to offer.
Brent Wasson is vice president specializing in construction risk management, manufacturing, property management, and non-profit commerce insurance coverage needs. He can be contacted at brent@cigcorp.com or 316.440.3503. |
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In today's litigious environment, companies of all sizes are at a real risk of legal action due to an employment practices liability related claim. Ranging from sexual harassment to wrongful termination or discrimination, these claims can potentially cripple the financial stability of any business. The number of employment practices liability lawsuits is quickly rising, with larger and larger judgments are being handed out every year. This makes companies more vulnerable than ever before. Even if your company is found to be innocent, the cost to defend these claims can be very expensive. 
