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The construction marketplace is, once again, evolving. New construction in Residential, Warehouse, Manufacturing, and Office are down. Public Works, Medical/Pharmacom, Power/Utilities, and Data Centers are each up and trending higher. This evolution, combined with still problematic labor shortages and volatile pricing in the supply chain is creating some unique economic times. Many of these challenges aren’t new but having them combine is creating some instability. In unpredictable economic times, maintaining and increasing bonding capacity becomes crucial for contractors. Now is a good time to revisit some effective strategies to enhance bonding capacity, including methods for prequalifying subcontractors and vendors, optimizing job selection, and managing cash flow. Let's dive into these best practices. Increasing Bonding Capacity To bolster bonding capacity, contractors can consider the following methods: Strengthen financial health by reducing debt, improving cash flow management, and maintaining healthy financial ratios. Build strong relationships with your surety partners through regular communication and providing accurate financial information. Showcase professionalism and reliability by implementing efficient project management systems and completing projects within budget and on time. Maintain a solid safety record through comprehensive safety programs, regular employee training, and strict adherence to regulations. Prequalifying Top-rated Subcontractors and Vendors It’s critical to work with reliable subcontractors and vendors. Consider these prequalification methods: Conduct thorough background checks, including assessing their financial stability, past performance, and reputation. Seek references and testimonials from previous clients to gauge their reliability and quality of work. Evaluate their experience and expertise in handling projects similar to your requirements. Verify their insurance coverage and ensure compliance with industry standards and regulations. Optimizing Job Selection Choosing the right projects is vital during an economic downturn. Here are effective methods for job selection: Focus on projects aligned with your expertise and financial capabilities, considering factors such as size, complexity, and available resources. Evaluate the project's potential for profitability, cash flow stability, and long-term benefits. Consider public sector projects governed by bonding requirements, as they offer opportunities to expand your bonding capacity and don’t rely on bank-supported project financing. Assess the project's timeline and potential risks to ensure a realistic and achievable completion. Cash Flow Management Maintaining a healthy cash position is paramount during an economic downturn. Follow these strategies: Develop accurate cash flow projections, taking into account potential delays and payment cycles. Negotiate favorable terms with clients to accelerate payments or request partial upfront payments. Implement tight financial controls, including regular monitoring of expenses and rigorous invoice management. Collaborate with suppliers and subcontractors to negotiate extended payment terms or explore alternative financing options. By implementing these strategies, contractors can proactively navigate economic instability, strengthen your bottom line, and substantially impact your overall bonding capacity. Focus on financial health, build strong relationships, prequalify top-rated subcontractors and vendors, optimize job selection, and manage cash flow effectively. Remember, these best practices require consistent effort and adaptability to succeed even in challenging times. Stay resilient, and your bonding capacity will be well-positioned for future growth. Money still doesn’t buy happiness but it does buy you the ability to seize on new opportunities when they come your way. Ken Fontana, Surety Manager Cottingham & Butler’s Risk Management Division 563.587.6341 | kfontana@cottinghambutler.com Ken began his career in the insurance industry in 1996 at the corporate offices of Horace Mann Insurance. After relocating to Wyoming, he spent several years managing corporate safety programs, insurance, and claims as the RMO for a nationally exposed company engaged in numerous state and federal contracts including operations at three military bases, the Denver Federal Center, and HUD program management. He has been a licensed insurance agent for 20 years with the last 10 focused strictly on contract and commercial surety. Ken’s relationships with the nation’s top sureties and his experience give him a uniquely well-rounded approach to your overall surety, bonding, and subcontractor default insurance needs.

A best-in-class processing equipment manufacturer had been seeing a decrease in their loss experience, yet they were not seeing a decrease in how much they were paying for insurance. They were curious to learn if there was a way to incentivize their increased focus on safety and best practices. Their current program was "off the shelf" and was not designed to meet their specific needs. After engaging with Cottingham & Butler's Risk Management Assessment (RMA), they quickly learned that there was not only a better way to buy insurance, but that there were significant coverage deficiencies in their program. The company recognized the value of a customized loss-sensitive program, as well as having a broker partner who would advocate on their behalf for claims. Program Design Delivered a loss-sensitive program option, Horizon, that would allow the company to receive up to 50% of their premium back for good loss years. Identified 3 carriers that had never seen the account before, and had an interest in the business. Coverage Identified 20 coverage deficiencies in their existing program. Significant deficiencies include: Multiple sub-limits were inadequate compared to their operations. The policy was designed for Architect and Engineering Professionals, NOT for Manufacturers. Multiple exclusions related to the core business operations of the company were present. No flood/earthquake coverage in a high-risk area. Contractual Risk Transfer Highlighted areas of concern and how their current risk transfer methods were inadequate for their industry and line of work. Cottingham & Butler put together recommendations and corrected critical mistakes in policy language Stability After joining Horizon, the company experienced a large loss in its first year of implementation. Even after the loss, their spend was similar. By paying in guaranteed cost, they avoided the increases they would have seen in the standard market. Since then, the company has received $80,000+ each year for their good loss experience. Claims Advocacy While the company had great loss experience, they had not previously received any claims reviews or advocacy services. After being made aware of the impacts of delayed reporting, their claims reporting processes were improved and consistent claim reviews were scheduled with the team.

During a merger or acquisition, insurance policies and finances need to be scrutinized and the future of employees addressed. Cybersecurity is often put on the back burner, which is unfortunate, because this is a time when company data is at its most vulnerable. Data transfers must proceed without a hitch, or else the companies risk damaging their reputation, losing customers, and hurting future sales. Additionally, legal responsibilities must be upheld before, during, and after the data transfer process. Use the following checklist to ensure you’ve covered all of your cyber security bases: Identify all data assets that will need to be transferred. Gather and merge all data standards, policies, and processes from employees at both companies. Identify potential risks that could occur during data transfer. Before any data transfers, ensure data is backed up. Run background checks on any employee who will be involved in the data transfer process. Craft a business continuity plan to prepare for potential data loss or outages during the period when the transfer will be occurring. Assign one high-level person the job of overseeing all data transfers. They will have the task of dividing and conquering by assigning one person to each data asset that needs to be transferred. Legally transfer ownership of data assets as quickly and completely as reasonably possible. Host training sessions on new data standards, policies, and processes. Update disaster recovery plans, business continuity plans, and emergency plans to include newly acquired data assets. Update the risk profiles for newly acquired assets. Preparing for Data Transfer Planning for data transfer should begin as early in the merger or acquisition process as possible. It is wise to assign one person the task of overseeing all data transfers so that there is little room for miscommunication or error. That person can then delegate smaller tasks, such as identifying data assets, identifying potential risks during transfer, and making sure the data transfer complies with federal and state law, but the person in charge should be aware of the current status of all tasks at all times. This person should also manage the implementation of the interim business continuity plan so that daily operations are disturbed as little as possible. Keep in mind that if the acquired company has already completed portions of the data transfer or consolidation tasks, you should review the work to ensure accuracy. Consider relocating IT employees from the acquired company early so that they can help with the data transfer and risk identification process, as they will be more familiar with their data and systems. Sufficient time should be mapped out to allow any older data to be converted for use in newer software and programs. Finally, ensure that your system configuration records are up to date before any data transfers or consolidations. This will help isolate any issues that might occur and allow for an effective fix. Good Practices for Data Transfer Even if your company is completely prepared for the data transfer, it’s still possible that issues will arise during the process. Here are some good practices your company can utilize to minimize these risks: Try to avoid using any kind of removable media to transfer data from one place to another. If the only method you can use is removable media, then take extreme care to be sure all records are encrypted, especially if they involve personal information. If you have any data that isn’t getting transferred, you should dispose of it safely and completely to ensure it cannot be stolen. Do not try to move all data at one time. Set small goals to complete every day or week to prevent an overload on your system or large, messy mistakes. Consider halting some of your company’s cyber services until all data has been switched over to protect the services from being adversely affected by the transfer. Another option would be to run a similar service until data has been transferred. Increase protective monitoring systems to prepare for the possibility of a disgruntled employee. Mergers and acquisitions are scary, uncertain times for employees, whose roles are often modified or eliminated to accommodate a new company structure. Update all clearances and access capabilities for employees based on new roles. Safe and secure data transfer during a merger or acquisition is of utmost importance. Communication is crucial during this time and basic duties and responsibilities should be quickly laid out and assigned to employees before, during, and after the transition. Data transfer is not just about preventing and managing a compromise or interruption to services; you also need to keep your customers’ and stakeholders’ needs in mind and consider their concerns. Most importantly, ensure your new and existing clients know that you’re keeping their data safe. For additional cyber risk management guidance and insurance solutions, contact us today.

A middle-market landscape contractor— who was with an unspecialized broker for over 10 years— felt they were being under-serviced and were not aware of existing issues within their program. After engaging with Cottingham & Butler’s construction specialists, we were able to uncover several significant deficiencies and numerous opportunities for improvement. Cottingham & Butler identified 5 carriers with an appetite for their class of business who have not been approached in 5-plus years. Past marketing had been infrequent and disorganized, with carriers declining the account for a service they had not performed in several years. This was due to poor client representation and the broker not understanding the client’s operations. Our team's strategic marketing plan allowed us to secure several options to compare to their current program. This allowed their company to make a more educated decision on which program best fits their business objectives. The result was a 20%+ premium reduction. Upon further investigation, it was discovered that their policies, subcontractor agreement, and snow removal contract had several deficiencies and exclusions – residential work exclusion, deficient installation floater coverage, deficient pollution coverage, outdated contract requirements, lack of 3rd Party Risk Transfer, and more. Cottingham & Butler made the client aware of these issues and made corrections that resulted in no additional premium. Two claims were open with large reserves affecting their Mod factor. These were passed along to our in-house Claims Advocacy team, who developed an approach to drive better outcomes. We succeeded in lowering the reserves, which resulted in an improved Mod factor, and have since provided ongoing proactive claim advocacy and support.

Mergers and acquisitions (M&A) have become an increasingly common business strategy. M&A transactions increased from $3.8 trillion in 2020 to $5.1 trillion in 2021, according to professional services network KPMG. Despite the increase in M&A activity, approximately 70% to 90% of M&A transactions fail to reach their expected strategic and financial aims, according to research from the Harvard Business Review. Often, M&A transactions can struggle to meet their intended aims due to people-related factors, such as mismatched organizational cultures and management styles, lack of communication and trust, loss of key talent, and ambiguous long-term goals. HR professionals can play a pivotal role in preventing these types of failures and ensuring a smooth transition for employees on both sides of an M&A transaction. Understanding HR’s role in M&A activity can be vital to ensuring a successful transaction. This article provides an overview of HR’s role in M&A activity before, during, and after the transaction. It’s not intended to be a comprehensive guide but explores general issues for HR professionals to consider. Understanding HR’s M&A Role The terms "mergers" and "acquisitions" are often used interchangeably, but they have important differences. Mergers combine two separate organizations into a single, new entity. However, with acquisitions, one organization takes over another outright and establishes itself as the new owner. In most cases, an acquisition is technically a merger, as the new entity will merge with an asset of the organization. Regardless, the common use of these terms can create some differences in how the activity might impact a workforce and HR’s role. Traditionally, most have viewed HR’s role in M&A deals as limited to advising management or deal-makers on HR-related issues, such as talent decisions and integrating HR practices. However, M&A deals create a myriad of people issues that must be resolved quickly and effectively. This is where HR professionals can have the greatest impact on M&A transactions. Leading up to and immediately following M&A transactions, employees start to consider their personal situation. If employees feel uncertain about their place in the new organization, it’s more likely they’ll look for new opportunities. Recruiters know this and will target key talent immediately following an M&A deal announcement. The loss of key talent can diminish the overall value of any M&A transaction. How HR operates before, during, and after M&A transactions is critical, especially when communicating with employees. Before the Transaction HR’s primary role before any M&A transaction is conducting due diligence. During a deal, HR professionals provide critical information to assist in evaluating the transaction and assessing potential risks and liabilities. HR evaluates the following aspects of a target organization: Talent Culture Employee benefits plans Compensation programs Employment contracts and policies Potential liabilities Reviewing retirement benefits can be particularly important before an M&A transaction to assess whether a target organization’s retirement plans are overfunded, underfunded, or vested improperly. HR usually works closely with legal teams to ensure organizations comply with federal, state, and local laws. Failing to conduct careful due diligence can result in organizations assuming significant liabilities during M&A transactions. HR professionals from both organizations need to determine whether the entities’ organizational cultures are compatible. This can include analyzing each organization’s growth and turnover rates, management styles, employee attitudes regarding embracing a new culture, and benefits programs. This can help to ensure a smooth transition and cultural integration of the organizations. For organizations being acquired, HR professionals typically partner with the other organization’s HR team to resolve potential issues and provide information and data related to due diligence. This may require HR professionals to review and comply with nondisclosure agreements, as much of this information is considered confidential. They also support employees impacted by the transaction and ease their concerns and doubts. Doing so can increase employee confidence in the deal and help employees to remain productive during the transition process. During the Transaction HR professionals play a vital role during an M&A transaction as they are typically responsible for completing various significant tasks. Due to the breadth of involvement, HR can help define the blueprint of all aspects of the new organization and assess the deal’s impact on employees. This section outlines some of HR’s key responsibilities during a transaction. Communicating with Employees Employee communication is a critical HR function during M&A transactions. How HR shares information with employees about the transaction, especially those most affected, can greatly impact the deal’s success. When done effectively, employee communication can improve the odds that the deal will be successful. Not only can communication provide employees with timelines and updates about the integration, but it can also provide employees with a shared vision of the new organization and help win employees over. M&A transactions can be difficult for employees, and some are likely to leave. HR professionals can reach out to employees and conduct interviews to help employees feel heard and valued. HR should be honest with employees about what’s happening, what’s planned and when key decisions will be made. By treating individuals whom the M&A deal may negatively impact with respect, HR can send a strong message to the remaining employees about how the new organization deals with and prioritizes employees. Integrating Cultures M&A transactions often can lead to a culture clash. Since culture issues can sink the success of any M&A deal, blending culture is a top HR priority. HR professionals must integrate and redefine the new organization’s culture and values. They can do this by establishing a shared organizational vision, mission and strategy. Checking in with acquired employees can provide valuable insights as organizations attempt to align cultures. Ensuring Legal Compliance Ensuring that organizations comply with applicable laws often falls on HR’s shoulders. Employees are often released as a result of M&A activity. Each organization’s HR professionals must ensure they follow all applicable laws and notification requirements when reducing staff. M&A transactions may result in organizations being forced to comply with new laws. For instance, if an M&A deal results in an organization acquiring non-exempt employees, it must comply with legal obligations for these new employees under the Fair Labor Standards Act. Additionally, to protect employees from losing legal protections, some regulations require employers to comply with laws even if they do not satisfy the legal requirements to be considered covered employers. For example, suppose a new organization is a successor in interest. In that case, employees from the previous organization cannot be deprived of their rights under the Family and Medical Leave Act (FMLA) even if the new organization does not meet the FMLA’s covered employer requirements. M&A transactions are often legally complex, and this article only provides a few examples of the potential legal issues organizations must consider. Due to the complex nature of this activity, employers are encouraged to seek legal counsel to discuss any specific issues and concerns. Making Technology and Outsourcing Decisions HR may need to decide which systems or technology the new organization will keep, replace or eliminate. It may also need to consider which organizational processes or functions will be outsourced. While this may seem straightforward, it requires HR professionals to painstakingly assess the technology and systems of all organizations involved in an M&A transaction. Additionally, HR must act quickly to integrate technology and systems to avoid disrupting the new organization’s operations. After the Transaction Once an M&A transaction is completed, HR plays a key role in integrating the organizations. This can be particularly challenging and labor-intensive. HR professionals typically undertake the following tasks: Create new policies. After an M&A event, HR must create or merge employment policies, rules and guidelines to establish workplace governance and set employee expectations for the new organization. This may include creating attendance, paid time off, sick leave, drug testing, anti-discrimination and anti-retaliation policies. Manage talent. HR plays a critical role in determining which employees will stay, are replaced or are eliminated after an M&A event. This includes identifying employees that may be needed to ensure a smooth transition but aren’t critical to the long-term success of the new organization. HR professionals typically spend a great deal of time evaluating employees since most M&A transactions expect to increase organizational efficiency by eliminating redundant roles. HR assesses employee knowledge, skills and capabilities by interviewing and potentially testing employees. Once completed, HR takes steps to re-recruit and place employees. HR must also eliminate unnecessary positions by terminating individuals, offering early retirement or leaving roles vacant. Retain key talent. To ensure a successful M&A transaction, organizations need to retain key employees. This often means reaching out directly to these employees to discuss their career goals and address concerns generated by the M&A deal. HR needs to ensure there’s a place for key talent in the new organization and adequate career growth opportunities for them. Develop compensation strategies. HR creates cohesive compensation structures for the new organization, including executive compensation strategies. Typically, this requires HR professionals to unify the compensation structures and incentives of multiple organizations. Any new compensation structure must be clearly and effectively communicated to employees. Create employee benefits programs. Similar to creating compensation structures, HR may need to fit existing employee benefits programs into a unified plan for the new organization. If that’s not possible, HR professionals may need to establish new benefits programs for the new organization, which can be complicated and time-consuming. Again, communicating any new benefits programs to employees is critical. HR is essential to the success of any M&A transaction. By ensuring HR professionals have the necessary skills and resources to steer the integration effectively, organizations can help ensure their M&A deals reach their expected strategic and financial aims. To learn more, contact Cottingham & Butler's M&A team today. The above insights are not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.

Commercial drivers face a number of risks on the road, including accidents, severe weather, and equipment breakdowns. Trucking insurance can help cover carriers and drivers from these losses, but it can be easy to overlook another common risk— lost or damaged cargo. Because for-hire transporters don’t own the cargo they carry, standard trucking liability policies may not provide the coverage you need if anything happens to freight while it’s in transit. And since cargo can be extremely valuable, you could be responsible for expensive losses and damage relationships with your clients. All transporters should consider motor truck cargo insurance to cover their liability for the goods they carry. The FMCSA also requires vehicles to have cargo insurance for interstate commerce, and other federal and state laws may also apply. General Information Motor truck cargo insurance covers all of the liability for goods in transit if they’re lost or damaged due to events such as fires, crashes or collisions. These policies may also compensate you for charges such as removing debris from public roads, preventing further damage to cargo and legal defense costs. Because the price for cargo can vary significantly, the premiums and coverage limits for cargo insurance is largely dependent on the cargo itself. When buying a policy, insurers usually determine the cost based on the specific trucking operation, the number of vehicles used and the type of cargo. However, it’s also possible to purchase blanket coverage that’s priced based on gross revenue. This can be especially helpful when carriers need to use large fleets to complete an order or if cargo needs to switch between different vehicles frequently. Working with Clients One of the most important topics when considering cargo insurance is the party that actually owns the goods you’ll be transporting. Your clients may require you to purchase this coverage as part of your contract to protect their own interests, and any unexpected losses can severely damage your business’s reputation and relationship. Before you buy a cargo insurance policy, you should work with your clients to agree on a mutual value for the cargo. If any goods are damaged in transport and your policy doesn’t provide you with enough coverage, you could still be responsible for the remaining costs. You should also ensure that all of the client's cargo declarations are accurate since any significant errors could lead insurers to deny a claim. Common Exclusions Since cargo insurance is so common, policies are usually available for a wide variety of operations and cargo. However, most policies will exclude coverage for the following: Any goods kept in a transporter’s warehouse for over 72 hours Shipping containers These types of vehicles: Garbage trucks Passenger vehicles such as buses and limousines Hearses These types of cargo: Art Jewelry Money Paper Animals Contraband Pharmaceuticals Alcohol Tobacco Explosives Radioactive material Evaluating Your Insurance Needs Cargo insurance can be invaluable for any motor carrier and driver, as can other forms of coverage. Contact the Cottingham & Butler team today to look into other policies that can protect your business or to get more information on our trucking-specific resources. This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact a Cottingham & Butler representative directly for appropriate guidance.

Collision coverage is a type of auto insurance that can help pay for damage to your vehicle from collisions, regardless of who was at fault in such incidents. Unless you’re leasing or financing your car, collision coverage isn’t typically required. However, it’s generally recommended to protect yourself from costly out-of-pocket costs associated with vehicular collisions by purchasing this insurance. Read on to learn more about collision coverage. What Does Collision Coverage Help Cover? Collision coverage may help pay for vehicle repairs and replacements caused by the following types of collisions: Collisions with objects (e.g., trees and guardrails) Collisions with other vehicles Single-car accidents (e.g., rollovers) Please note that collision coverage is designed to help pay for damage to your vehicle. Damage to other drivers’ vehicles will typically be covered by your auto liability coverage. How Does Collision Coverage Work? Your collision coverage will likely have a deductible, which is the amount you must pay out of pocket before your policy kicks in to help pay for a claim. Depending on your insurer, you may be able to change your deductible. If you choose a lower deductible, your premiums will typically increase, but you’ll pay fewer out-of-pocket costs for claims. Likewise, if you raise your deductible, your premiums may decrease, but you will likely have to pay more upfront before your policy helps cover claims. Your collision coverage should also have a limit, which is the total amount your insurer will compensate you for a covered loss. Your coverage limit will typically equal the actual cash value of your vehicle, minus depreciation. Keep in mind, this may not be enough to replace your old vehicle if your vehicle is totaled in a collision. Contact the Cottingham & Butler team today to ensure you have adequate protection for your vehicle. This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact a Cottingham & Butler representative directly for appropriate guidance.

Auto insurance is one of the most frequently purchased types of coverage in the United States. However, while these policies may be common, they can still be complex and nuanced. Policyholders must be diligent and meticulous to ensure they fully understand their auto coverage and have ample financial protection. One of the most common and crucial components of an auto insurance policy is adequate liability coverage. Any time a driver gets behind the wheel, they risk being involved in accidents that could harm others and incur devastating financial consequences. This article provides an overview of auto liability coverage and its importance. What Is Auto Liability Coverage? The liability portion of auto insurance is strongly advisable and is usually required by law. Although minimum requirements may vary among states, all drivers are generally mandated to carry certain liability coverage to ensure they can pay for losses for which they are at fault. Liability coverage can insulate drivers from significant losses affecting third parties, including the following: Bodily injury—If a policyholder is responsible for an accident that injures another party, such as a pedestrian or occupants of another vehicle, this coverage can help pay resulting expenses, such as: Medical bills Lost wages Legal expenses Property damage—If a policyholder is at fault for damaging someone else’s property, such as by colliding with another vehicle or crashing into a building, this coverage can provide financial assistance to compensate affected parties and pay for costs arising from resulting lawsuits. Most auto insurance includes three separate liability limits within a policy. These clauses establish the maximum amount of financial aid capable of being covered and generally are listed as the following: Bodily injury liability limit per person Bodily injury liability limit per accident Property damage liability limit Another type of coverage that could help you financially protect yourself in an accident is uninsured/underinsured motorist coverage. This coverage, which is sometimes sold separately as uninsured motorist coverage and underinsured motorist coverage, can often be added to your personal auto insurance policy to help you avoid high out-of-pocket costs if you’re involved in an accident with a driver who doesn’t have any liability coverage (uninsured motorist coverage) or doesn’t have enough liability coverage (underinsured motorist coverage). Ensuring Adequate Coverage Motorists should consult with a qualified insurance professional to understand applicable auto insurance requirements. Failing to comply with relevant laws could lead to significant fines and legal penalties. Their lender may also require those who purchased their vehicles with the help of an auto loan to adhere to additional requirements. Even if not mandated to do so, carrying sufficient auto liability coverage is strongly advisable. Without suitable insurance, an accident could lead to devastating out-of-pocket costs that jeopardize a driver’s financial situation. It’s also essential to understand the limitations of auto liability coverage, which should not be relied upon to cover a policyholder’s own losses. Such financial assistance generally must be acquired through including additional coverages in an auto insurance policy, such as the following: Collision coverage—This may help pay for damage sustained by a policyholder’s vehicle resulting from striking another car or stationary object (e.g., building, fence, tree) Comprehensive coverage—This may provide coverage for incidents not included in collision coverage, such as fires, crime and severe weather. Medical payments coverage—This may provide financial assistance for a policyholder and their passengers if they are injured in an accident, regardless of who was at fault. Making Sure You’re Covered Auto liability coverage is an essential form of financial protection for any person who owns or operates a motor vehicle. For more information or guidance regarding optimal auto insurance solutions, contact Cottingham & Butler today. This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact a Cottingham & Butler representative directly for appropriate guidance.

As industries expand and regulations tighten, the potential for pollution incidents and other environmental mishaps increases. In response to these challenges, many businesses are turning to environmental insurance to mitigate their risks. Let's delve into the need-to-know details of what environmental insurance is and why it's crucial to consider. What is Environmental Insurance? Environmental insurance, also known as pollution liability insurance, is a specialized form of coverage designed to protect businesses from the financial consequences of pollution incidents or environmental damage. This type of insurance typically covers liabilities arising from pollution events on a company's owned or operated properties, as well as liabilities associated with products or services that cause environmental harm. Why is Environmental Insurance Important? Financial Protection: Environmental cleanup and remediation can be exorbitantly expensive. In the event of a pollution incident, businesses may face costs related to investigation, cleanup, legal defense, and potential third-party claims. Environmental insurance provides financial protection against these unforeseen expenses, helping businesses avoid significant financial losses that could threaten their viability. Regulatory Compliance: Environmental regulations are becoming increasingly stringent across the globe. Businesses that fail to comply with these regulations may face fines, penalties, and even legal action. Environmental insurance can help businesses navigate complex regulatory landscapes by providing coverage for liabilities related to regulatory violations. Risk Management: Pollution incidents can have far-reaching consequences, including damage to property, harm to natural resources, and adverse health effects on individuals. By obtaining environmental insurance, businesses can effectively manage their risk exposure and safeguard against the potential fallout of environmental accidents. This proactive approach to risk management demonstrates a commitment to environmental stewardship and sustainability. Peace of Mind: Operating a business comes with inherent risks. Environmental insurance offers peace of mind by providing a safety net against the unpredictable consequences of pollution events. With the knowledge that they are adequately protected, businesses can focus on their operations and growth without the constant worry of environmental liabilities looming over their heads. Market Competitiveness: In today's environmentally conscious marketplace, consumers, investors, and regulators increasingly expect businesses to demonstrate their commitment to environmental responsibility. Having environmental insurance in place can enhance a company's reputation and credibility by showcasing its proactive approach to managing environmental risks. This can be particularly advantageous when competing for contracts, attracting investors, or differentiating oneself in the market. In an era defined by environmental awareness and regulatory scrutiny, environmental insurance has emerged as a critical tool for businesses across various industries. By providing financial protection, ensuring regulatory compliance, facilitating effective risk management, offering peace of mind, and enhancing market competitiveness, environmental insurance helps businesses navigate the complexities of environmental liabilities with confidence. As the global focus on environmental sustainability continues to intensify, the importance of environmental insurance in safeguarding businesses against the repercussions of pollution incidents cannot be overstated. For businesses seeking comprehensive risk management solutions, environmental insurance is not just an option—it's a necessity. Speak with a member of the Cottingham & Butler team today to learn more about what coverage is best suited for your operation.

Your livelihood is dependent on the survival of your business, so it is imperative that you protect it against any potential threat—big or small. For instance, a fire could destroy your business’s warehouse and the contents inside, or a burst frozen pipe could damage important documents and valuable papers. Worse, you could have trouble paying your employees during a loss because your funds are devoted to repairing damage. If self-insuring is not an option to combat these risks of loss, it is wise to obtain property insurance. This coverage comes in many forms to suit your specific needs. Before purchasing coverage, take a complete inventory of all your business property to determine how much you need to insure. This important step ensures you will have adequate coverage to continue your business in the event of a covered loss. Types of Property You May Need to Insure Here are some examples of property that are commonly insured: Buildings and other structures (leased or owned) Furniture, equipment and supplies Inventory Money and securities Records of accounts receivable Leasehold improvements and betterments you made to the rented premise Machinery/boiler Electronic data processing equipment (computers, etc.) Valued documents, books and papers Mobile property (construction equipment, etc.) Property in transit Cargo Satellite dishes Signs, fences and other outdoor property not directly attached to the building Intangible property (goodwill, trademarks, etc.) Business contingency for suppliers Ordinary payroll Extra expenses as a result of loss Types of Property Insurance Policies Basic property insurance covers losses due to fire or lightning, including the cost of removing property as a way to protect it from further damage. Should you want to purchase more than basic coverage, you can buy a standard policy that provides coverage for extended perils, such as floods, windstorms, hail, earthquakes, acts of terrorism, explosions, riots, smoke, civil commotions, and vehicles that damage your property. Beyond that, coverage for vandalism and malicious mischief can also be included. Are You Buying Enough? One of the most important aspects of purchasing property insurance is making sure that you have purchased enough coverage to be adequately protected. A typical policy will provide the replacement cost value for your building and the actual cash value for your business property. Replacement cost value is the amount that is necessary to replace or rebuild your building or repair damages with similar materials, without considering depreciation. Actual cash value, on the other hand, is the value of your property when it is damaged or destroyed. This amount is typically determined by subtracting the depreciation from the replacement cost value. Most property insurance policies include a coinsurance clause, which requires you, the policyholder, to share the cost of covered services up to a moderate percentage of the actual cash value of the property. This will allow you to receive full coverage for your losses. Should you decide to purchase inadequate coverage for your property, you may be obligated to pay a percentage of all losses, even if they are listed in the policy. Cottingham & Butler understands that determining your business’s value is critical, so we’re here to help. Contact us today to learn more about our property insurance and loss control solutions to protect your business. This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact a Cottingham & Butler representative directly for appropriate guidance.

The only way to effectively protect the assets of your business is to carry adequate commercial general liability (CGL) insurance coverage. CGL protects your business from damages caused by bodily injury or property damage for which your business is found to be legally liable. What Does CGL Cover? A typical CGL policy provides coverage for claims of bodily injury or other physical injury, personal injury (libel or slander), advertising injury, and property damage as a result of your products, premises, or operations, and can be offered as a package policy with other coverages such as property, crime, automobile and more. As a safeguard against liability, CGL enables you to continue your normal operations while dealing with real or fraudulent claims of negligence or wrongdoing. CGL policies also provide coverage for the cost of defending and settling claims. Here is more detail into what a typical CGL policy may cover: Automatic additional insured: Coverage is provided for written contracts, agreements and permits. Personal and advertising injury: Protects against offenses made by you or your staff during the course of business, such as libel, slander, disparagement, or copyright infringement in advertisements. Defense costs: Provides coverage for legal expenses for liability claims brought against your business, regardless of who is at fault. Medical expenses: Provides coverage for medical expenses if someone is injured on your premises or by your products. Premises and operations liability: Provides coverage for bodily injury and property damage sustained by others on your premises or in conjunction with your business operations. Product liability: Provides coverage for bodily injury and property damage sustained by others as a result of your products. How Much Coverage Does Your Business Need? The amount of coverage that your business needs depends on three factors: perceived risk, where you operate your business, and the type of products you manufacture. Perceived risk: Consider the amount of risk associated with your business operations and functions. For instance, if you manufacture heavy machinery you would generally need more coverage as compared to another organization that manufactures stuffed animals. Premises and operations liability: If you operate in a state that has a reputation for rewarding high damages, then you may wish to purchase higher limits of liability. Type of product manufactured: If you manufacture a dangerous product, you may want to carry higher limits of liability. Remember, you can purchase an Umbrella Liability policy to help achieve the desired limit of liability. Other Ways to Protect Your Business, In Addition to CGL Here are some other tips for protecting your business. Establish a high standard for product quality control at your organization. Keep all company records up to date and accurate. Train your employees thoroughly and properly. Reach out to the Cottingham & Butler team for further safety and compliance information. Cottingham & Butler understands that your business needs to be protected, and we're here to help. Please contact us today to learn more about our risk management and insurance solutions. This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact a Cottingham & Butler representative directly for appropriate advice.

As cyberattacks become more frequent and costly, organizations must maximize their financial protection against related losses by purchasing sufficient insurance. Cyber coverage, also known as cyber liability insurance, can help organizations pay for a range of expenses that may result from cyber incidents—including (but not limited to) data breaches, ransomware attacks, and phishing scams. Specific cyber insurance offerings differ between carriers. Furthermore, organizations’ coverage needs may vary based on their particular exposures. In any case, cyber insurance agreements typically fall into two categories: first-party coverage and third-party coverage. Policyholders should have a clear understanding of both categories of coverage to comprehend the key protections offered by their cyber insurance. First-party Coverage First-party cyber insurance can offer financial protection for losses that an organization directly sustains from a cyber incident. Covered losses generally include the following: Incident response costs—This coverage can help pay the costs associated with responding to a cyber incident. These costs may include utilizing IT forensics to investigate the breach, restoring damaged systems, notifying affected customers, and setting up call center services. Legal costs—Such coverage can help pay for legal counsel to assist with any notification or regulatory obligations resulting from a cyber incident. Data recovery costs—This coverage can help recover expenses related to reconstituting data that may have been deleted or corrupted during a cyber incident. Business interruption losses—Such coverage can help reimburse lost profits or additional costs incurred due to the unavailability of IT systems or critical data amid a cyber incident. Cyber extortion losses—This coverage can help pay costs associated with hiring extortion response specialists to evaluate recovery options and negotiate ransom payment demands (if applicable) during a cyber incident. Reputational damage—Such coverage can help pay for crisis management and public relations services related to a cyber incident. Third-party Coverage Third-party cyber insurance can provide financial protection for claims made, fines incurred, or legal action taken against an organization due to a cyber incident. Types of third-party coverage usually include the following: Data privacy liability—This coverage can help recover the costs of dealing with third parties who had their information compromised during a cyber incident. These costs may include handling third-party lawsuits or legal disputes, offering credit-watch services, and providing additional compensation. Regulatory defense—Such coverage can help pay fines, penalties, and other defense costs related to regulatory action or privacy law violations stemming from a cyber incident. Media liability—This coverage can help reimburse defense costs and civil damages resulting from defamation, libel, slander, and negligence allegations associated with the publication of content in electronic or print media. Multimedia liability coverage can also offer protection amid copyright, trademark, or intellectual property infringement incidents. As a whole, it’s evident that cyber insurance can make all the difference in helping organizations avoid large-scale financial losses amid cyber incidents. Organizations should consult trusted insurance professionals to discuss their particular coverage needs. Contact us today for more risk management guidance and coverage solutions. This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact a Cottingham & Butler representative directly for appropriate guidance.