Category: Commercial

Understanding the Basics of Small Business Liability Insurance

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To protect a small business from potential lawsuits, liability insurance is necessary. Policies vary greatly, and they cover different classifications of risks for varying costs. Before shopping for a policy, it is important to know a little more about liability insurance. The following paragraphs provide a quick overview.

  1. Liability insurance is available in many different forms. Commercial general liability, which is also called CGL, is a very broad insurance product. It covers claims from accidents, injuries or negligence when the business is at fault. Small businesses may face a wide array of damage charges. Personal injuries, property damage, libel and slander are just a few examples. Product liability insurance covers legal fees for litigation involving a faulty product. It also covers any personal or property damage charges caused by the defective product. Professional liability coverage pays for damages caused by services. It is also called errors and omissions coverage. This is for companies that market a service instead of a product. For example, professionals in medical clinics must have medical malpractice coverage. There are other types of insurance designed for specialty businesses. For example, there are special policies for companies involved only in Internet sales. The nature of the business determines what type of coverage is necessary.
  2. The type of business may influence premium amounts. Insurers classify businesses in several different categories. These classifications play a key role in determining annual premiums. Every business has a certain degree of risk, and some types face many more risks than others. For example, a company that washes windows on skyscrapers would be a riskier business than a tax preparation company. To get a better idea of what to charge, most insurers research the number of claims made by similar businesses. The North American Industry Classification System is commonly used. To find out what kind of risk classification a particular business falls under, discuss the matter with an agent. The size of a business’ payroll and the amount of sales made also contribute to premium amounts.
  3. Liability insurance does not cover everything. General liability coverage does not offer benefits for employees’ work-related injuries and illnesses. Workers’ compensation coverage usually provides benefits for such expenses. Liability coverage does not cover intentional acts or damages sustained from those acts. Employee fights, criminal activity and fraudulent behavior are some examples of intentional acts.
  4. Liability insurance may be a requirement. Several states require some professions to carry liability coverage. If a business uses a vehicle or lets employees drive it, auto liability coverage is also important. Although most states have a specific standard for minimum auto liability coverage, the amounts vary from state to state. It is important to discuss these numbers with an agent. In the event of a claim, liability insurance provides coverage for defense costs, litigation claims and other legal fees.
  5. It is possible to decrease risks. If business owners document certain safety measures taken to reduce or eliminate risks, insurance companies may classify the company as low risk. Smoke alarms, fire alarms, sprinkler systems and multiple fire extinguishers help lower risks. It is also beneficial to train employees in various safety practices. Be sure to make equipment readily available. When vehicles are used for business purposes, make sure they are maintained properly.

Why All Contractors Need Adequate Liability Coverage

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Liability insurance is important for contractors and subcontractors. This type of coverage offers financial protection from the results of accidents, injuries and property damage caused during a project. When working on a construction project, many workers accidentally damage the property in one way or another. Mishandled tools, dropped items or misinterpreted directions are often the sources of property damage incidents. The regular standards of business require contractors to have proof of adequate construction liability coverage prior to starting a project on a structure. This standard is also required for subcontractors.

Commercial Contracting Insurance
Commercial contractors are usually expected to carry multi-million-dollar policies. This allows for coverage of any injuries or construction-related damages to the structure. As a rule, commercial contractors performing riskier tasks have higher coverage amounts. For example, a roofing contractor would have a higher amount than a contractor remodeling the interior of a one-story commercial structure. To finance premiums over the span of several months or one year, indemnity corporations charge contractors a down payment and monthly service fees.

Residential Building Insurance
This type of coverage is important for any worker in the building business. In many cases, homeowners decide to sue the contractor for damages sustained during the process of construction. If there are any injuries on the job site, some workers may also want to file lawsuits against the contractor or homeowners. A good construction liability policy will protect contractors from loss in unexpected situations and various types of damage lawsuits. However, the contract must require every subcontracting party to have their own coverage. The contract must also state that the contractor does not claim any responsibility for damages occurring during the construction process that are the fault of one or more subcontractors. Policy amounts are related to the amount of money the contractor executes, so it is important to estimate a realistic figure. To be fully protected, it is best to have at least two or three times as much coverage as the total amount of the construction project.

What You Need to Know about New Building Codes & Insurance

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Commercial building owners may think that replacement cost insurance is sufficient, but it may not be enough to protect from a major financial loss. Many people believe that their policies are enough to completely replace a destroyed building. However, this is often far from the truth. This false sense of security may leave people who experience loss with the bitter realization that coverage has stipulations. This is especially true if the insured building is old. Even if a building does not change substantially over the years, local building codes change frequently. Building codes in place at the time of the structure’s original construction may also be considered.

Many cities have ordinances requiring buildings to be demolished if more than 50 percent of the structure is damaged. If reconstruction is performed, current codes must be used. Unfortunately, some codes change to prohibit building the same type of structure in the area. For example, a funeral home that burns down 75 years after construction may not be rebuilt in the same spot. The area may have originally been zoned for such a business, but the neighborhood may have changed into an area with mostly houses. If the area has recently been zoned to accommodate residential buildings only, the owner of the business would have to rebuild elsewhere. The unfortunate part in such a case is that land may be more expensive somewhere else, and the value of an empty lot may not be enough to cover it. There are also accessibility issues to think about.

If a damaged building lacked ramps, remote doors and accessible toilets, the owner may have to make adjustments when rebuilding. This could end up costing more money. Standard commercial property insurance does not offer much coverage for such costs. The majority of insurers pay either $10,000 or five percent of the building’s insurance amount. Whichever amount is less is what is paid. This small amount of compensation can easily be used up by demolishing the building, bringing the building up to code or starting new construction elsewhere.

It is important for building owners to think about buying extra coverage for such possibilities. Most insurers offer special law or ordinance coverage for an extra premium amount. Unless the costs result from failure to comply, the bills for demolishing and rebuilding are covered. There are three specific types of coverage for specified buildings, which include the following:

  • Coverage A includes loss to the building’s undamaged portions.
  • Coverage B includes the cost of demolishing undamaged parts of the building.
  • Coverage C includes the heightened cost of repairs or construction to meet new codes and ordinances.

The amount of insurance for Coverage A is equal to the amount of coverage for the whole building. For Coverage B and Coverage C, there are separate amounts assessed. This type of insurance protects the owner only for the cost of replacing or repairing a damaged structure. However, lost income due to construction is not covered. There is separate coverage available for income loss. To learn more about that type of coverage, discuss the options with an agent. Unwanted surprises from unexpected disasters are harsh for business owners, so it is important to be prepared with adequate insurance.

What Contractors Should Know About Insurers’ Financial Ratings

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Contractors should be interested in the financial ratings and solvency measures of their insurance companies. In most cases, contract owners require a specific rating as a minimum standard. To meet such requirements, contractors must maintain good insurance. Ample coverage helps these professionals protect themselves and their business assets from lawsuits. Coverage also serves to meet requirements set by state laws.

Bonding and insurance industries are regulated by individual states, and an insurance commissioner usually makes sure that companies are financially sound and properly licensed. The evaluation process is ongoing. It is in place for the protection of claimants and policyholders. Insurance companies are usually classified as admitted or non-admitted. Each company has a choice whether they will conduct business on one classification or the other in a specific state.

The main difference between admitted or non-admitted companies is the amount of scrutiny of policy terms and the rating plans that determine premium amounts. In some states, admitted companies offer a state guaranty fund for insureds’ claim payments. Non-admitted companies do not extend these funds. Consumers must also pay extra taxes when working with non-admitted companies. It is standard practice for insurers to tell consumers what classification their company holds, which helps consumers know what to expect.

Insurance companies’ financial failures can devastate policyholders. A fall from an A rating to a C rating may result in a breach of contract. However, insolvency can be far worse than a falling rating. In such a case, claimants and attorneys for the plaintiffs may target the company’s assets. Financial information about insurance carriers can be obtained from six credit companies.

These organizations are not owned by the government. Their job is to analyze insurers’ financial statements that are filed with state regulators. They also review loss reserve reports, state examination reports, SEC financial reports and any reports filed regarding policyholders or stockholders. After careful analysis of the data, these companies assess credit ratings. The ratings are available by subscription. However, an agent will also be able to provide these ratings.

With this valuable knowledge in mind, it is also important to implement some best practice initiatives. Look at the contract’s insurance clause. There may be problematic issues in this section. Although many contracts allow for a downgrade and cancellation, policyholders should request the option to reject an insurer that shows unacceptable actions. This option gives the policyholder some control in the event of an insurer’s declining financial situation.

Another option is to make the clause state that specifications must be met only on the applicable policy’s inception date. This would prevent a mid-term cancellation resulting from a financial downgrade. For those who may wonder about the frequency of downgrades, research conducted in 2002 showed almost 650 companies received lower ratings than the previous year. In 2005, more upgrades were issued than downgrades. The point is that downgrades can happen, so it is important to be prepared.

Contractors should also know that their bonding companies are subject to evaluation at the federal level and the state level. For government projects, companies must limit single project bond capacity to a specific amount, which is determined by the U.S. Treasury’s Circular 570 publication. Surety companies’ financial situations are monitored by the FMS. Important financial information can be found on their official Web site.

Those who have contracts funded by federal sources should perform an annual verification of a bonding company’s ability to meet government requirements. This item of discussion should be on the agenda during a meeting with a bonding agent and surety company. Monitoring financial trends of insurers and bonding companies should become a habit. More information is better, but the minimum amount of research should include financial ratings.

Builders Risk Insurance: What’s Not Covered?

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Builders’ policies are not totally comprehensive, though. While specific policies vary, the vast majority of construction coverage policies are written based on a regulator-approved standard form. So for the most part, you can expect your policy to cover the buildings and structures on the property, including the systems directly installed thereto.  Usually, your standard policy will cover such items as heaters, electrical systems, HVAC systems and boilers. Policies will also usually provide coverage for temporary structures, as well as construction materials that are stored on the premises for use on site. But sometimes property owners and contractors alike are taken by surprise when a policy doesn’t cover something:

Not Covered

Unless you buy specific extensions or rider most policies will not cover items that are external to the structures, such as fencing, walkways, roads, swimming pools, and other external items not intrinsic to the main enclosed structures.

Landscaping is also not covered under this particular policy, though it may be covered under a flood or fire insurance or wind insurance policy, depending on the hazard that caused the damage and the type of structure.

Items that are normally underground are also not usually covered. Examples include plumbing and irrigation systems, drains and even building foundations.

Water Structures

Is the property adjacent to a body of water? Your standard builders insurance policy probably won’t cover items that interact with the water. For example, it generally won’t cover bridges, docks or wharfs.

All-Risk vs. Specific Peril

All-risk policies provide protection against any risk, while named peril policies only protect against damages from specific hazards. All things being equal, you can expect a higher premium from an all-risk policy versus a named-peril, or specific peril policy. On the other hand, if you have coverage against one type of occurrence already, it may not make sense to pay full price for an all-risk policy, doubling up your coverage. But be careful with this type of planning

Riders and Endorsements

Unlike personal lines of insurance, which are more tightly controlled by regulators to protect unsophisticated consumers, commercial lines of insurance, including builders’ insurance, features policies that are readily and easily upgraded to include additional coverages that may make sense for the builder. It is more efficient for an insurance company to cover an unusual risk with a rider than to build the coverage into policies for which it isn’t even relevant. It makes no sense for everyone who isn’t building a home with a swimming pool pay into swimming pool coverage for those few who are.

If you need coverage for a specific item not included in the base policy, your insurance company can probably write up a rider or an endorsement to cover the extra risk. You’ll have to pay an additional premium, and the maximum dollar amount for that particular risk will be clearly defined.

For example: Acts of war and acts of terror are frequently listed as exclusions on standard insurance policies. But if you are building a structure near a nuclear plant, for example, or a high-profile and logical target for terrorist groups or an enemy military, you may want to consider purchasing additional coverage.

When you buy this coverage, the insurance company grants an “extended policy.”

Read Your Policy

It is important to read and understand your policy in detail, paying particular attention to the policy exclusions. If one of the exclusions is a risk you’re concerned about – or if you would suffer a significant loss in the event of damage to or destruction of a specific structure or item on the property that’s excluded, bring it up right away with your agent, and have him or her draw up a rider, which will be attached to the back of the policy. The additional premium required is usually small, but it covers a big loss in the event something goes wrong.

Important Liquor Liability Considerations for Business Owners

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If an intoxicated person causes property damage or bodily injuries on a business’ premises after being served alcohol there, liquor legal liability and host liquor liability will protect the business. The details of how the person was served alcohol will determine what type of coverage is required. Business owners should understand the basics of both types of coverage.

Liquor Legal Liability
This form of insurance covers property damage or bodily injuries for which a business may be responsible for after allowing a person to become intoxicated on the premises. Liquor legal liability is a separate form of insurance, and it only covers parties in the business of selling, distributing, manufacturing or serving alcoholic drinks for free or for profit where a license is required. The general liability policy will not cover this.

Host Liquor Liability
This type of insurance protects businesses facing claims of property damage or bodily injury from parties injured by an intoxicated guest. The intoxication must have taken place on the premises. Host liquor is included on the commercial general liability policy for businesses that are not in the business of selling, serving, manufacturing or distributing alcohol.

Although these policies may sound very clear for parties not in the alcohol business, events that happen in real life may not always be so easy to define. It is important for all business owners to consider their exposure. If an event is hosted off the company premises where a liquor license is required, the company hosting the event may be considered to be in the business of alcohol provision. Some companies also charge a cover fee for their events. In such a scenario, the company could be considered to be in the business of selling alcohol because of the fee requirement.

It can be difficult to determine which type of liability coverage is needed for a particular case. To avoid finding out which type is needed after getting to court, business owners should discuss their options with an agent. As most agents will say, it is also wise to consult an attorney for legal questions. Although agents provide all of the necessary information about policies and possible occurrences, only attorneys can provide actual legal advice.

The following tips are helpful for reducing the likelihood of liquor liability lawsuits:

– Serve drinks instead of offering an open bar.
– Hire a vendor who is licensed and insured to serve beverages. Be sure to obtain a copy of the individual’s certificate of insurance naming the business as an additional insured for that specific event.
– Stop serving drinks early in the evening.
– To slow the effects of the alcohol, provide food for attendees to eat.
– Implement a policy for intoxicated guests, but be sure to handle difficult people in a tactful manner.
– Provide non-alcoholic drinks at no charge.
– Price the alcohol at a moderate rate or slightly above. Guests will be less likely to drink more if the alcohol is not cheap.
– If possible, schedule the event during day hours. This discourages heavy drinking.

Your Product is Recalled. Are You Protected?

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You’ve invested tremendous capital in product design, patents, manufacturing, transportation and logistics. You’ve sunk thousands or even millions into materials and labor, research, marketing and everything else it takes to bring a product to market. You’re committed… and the unexpected happens.

It could be a manufacturing defect, either on your part, or on the part of one of your suppliers. It could be that a food or drug product has become contaminated. A disgruntled worker could maliciously tamper with your product. Or it could be that new evidence comes to light that establishes your product is unsuitable or unsafe for any reason.

What happens then? If the right thing to do is to issue a product recall, can you do this, and stay in business? Can you do this at all?

Without product recall insurance, a large-scale recall can be disastrous to any design or manufacturing firm. You may take a hit to your brand reputation even as you deal with the expenses of a recall – and the substantial cash outlays in repairing defects, replacing defective products, or issuing cash refunds to your customers. In some cases, even a modest recall can mean mass layoffs, bankruptcy and possibly ceasing operations. That doesn’t help you, your employees, your vendor partners or your customers.

That’s where product recall coverage comes in.

Product recall coverage helps defray the costs of issuing a recall of a defective, unsafe or unsuitable product.

Areas of Coverage

Not every policy covers everything. Your insurance agent can help you select and design a policy that best fits the specific circumstances of your business. But consider the following kinds of coverage:

Malicious Product Tampering: Covers the risk that an employee or other criminal intentionally damages your product. This may cause you to have to shut down operations for a period of time. Coverage is available to help protect you not only against direct costs, but also indirect costs, such as business interruption and investigation.

Product Refusal: In some instances, a dealer or distributor could refuse payment or delivery of your product based on rumors, unconfirmed reports, or because someone else’s similar product was contaminated. For example, if you’re distributing California lettuce, but there are reports of an e-coli contamination involving Mexican lettuce, and your outlets stop selling lettuce entirely for a time, and they refuse delivery of product, your product refusal insurance policy would help defray your costs and damages.

Restaurant Owners: A food product recall or restaurant equipment recall could cause a restaurant significant financial harm. If the ingredient affected is a mainstay of your menu, or if the equipment being recalled is a critical item, you could be out significant sums of money. For example, imagine a pizza restaurant hit with a massive pepperoni recall on Superbowl Sunday.

Special coverage is available specifically to meet the concerns of food service establishments, to include expanded liability protection for claims arising from food-borne illnesses, for example.

Extortion: Specialized coverage is available to help business owners deal with the costs of extortion – whether from within or by someone outside the company. While rare, it does sometimes happen, and the costs of such coverage can be severe.

Product recalls are comparatively rare. But their risks in any single instance can be a financial catastrophe for the business. This makes insurance an ideal solution for the risk of product recalls and related potential liability. The risk is potentially disastrous, but you can still largely protect yourself with a known and affordable premium.

Penn State Crimes Raise Liability Insurance Issues

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Most institutions carry liability insurance to protect themselves against the bad acts of employees working in an official capacity, or misusing their facilities – and Penn State is no exception. But the recent, lurid child sex abuse scandal embroiling the Penn State football program and former coach Jerry Sandusky isn’t a typical “slip-and-fall” case.

Background

If you’re not much on sports, here are the basics: Pennsylvania State University assistant football coach Jerry Sandusky has been convicted on 45 counts of sexual molestation, both in his home and in the Penn State football program’s restroom and shower facilities.

The criminal trial phase is over, although as of this writing, Sandusky has yet to be sentenced. The civil liability side of the case is just warming up.

Technically, Sandusky retired from the coaching staff in 1999, though he was granted “emeritus” status after he retired, and allowed free use of the University of Pennsylvania athletic facilities for years while he served as director of Second Mile, the charity he founded as an outreach to disadvantaged youth. But he was using the charity to gain access to victims the whole time, some of whom he raped in the locker and shower room himself.

The ultimate financial liability the University will face is unclear. The current Penn State University president, Rodney Erickson, claims that the University did carry sufficient insurance coverage to cover anticipated claims. And normally liability insurance would cover civil suits from actions on campus.

But the Sandusky case is different – and the carrier is balking.

At issue: According to an investigative report conducted by the former Director of the FBI Louis Freeh, the University was first alerted to the possibility that Sandusky was a sexual predator as early as 1998. If that weren’t enough, another football coach, Mike McQueary, walked in on Sandusky apparently sodomizing a child in the locker room/shower facility in 2001. He informed the Nittany Lions’ head coach Joe Paterno, and Paterno notified the school Administration – which did nothing.

The school took no action to restrict Sandusky’s access to the facilities or to children on campus. Instead, the Free Report concluded that Paterno and the University administration, including the former director of the Campus Police, “repeatedly concealed critical facts relating to Sandusky’s child abuse from authorities, the University’s Board of Trustees, the Penn State community, and the public at large.”

Most of the boys whom Sandusky was convicted of victimizing were assaulted after 2001, after the Administration had an opportunity to bring Sandusky’s depraved acts on campus to a halt – and this ix the crux of the matter from a liability insurance perspective:

In concealing the reports of Sandusky’s sexual depredations on campus, the University concealed information from insurance company underwriters that was material – indeed, central – to their underwriting decision. As a result, lawyers representing the Pennsylvania Manufacturers Association Insurance company filed suit in court seeking to limit their liability to pay damages in this case.

The company also pointed to specific contractual provisions: Their contracts with the University had been amended in the early 1990s to specifically exclude coverage for sexual harassment and assault claims. The company also asserts that such claims are routinely excluded in Pennsylvania as a “matter of public policy.”

Playing Defense

Obviously, there’s no foolproof way to screen out, a priori, every employee or associate who may commit a bad act. If there were, everyone would do so. But anyone with staff or who offers access to facilities to the public should review coverage and assess possible gaps in their coverage: Most policies will honor claims for inadvertent acts, but not for deliberate ones – and Penn State’s carriers will point to the University administration’s cover-up of the Sandusky crimes as a deliberate act. Indeed, at least two Penn State administration members have been indicted for perjury.

Further, many policies specifically exclude claims of abuse or molestation. If this is the case with your liability insurance coverage, you may need to buy a separate abuse and molestation insurance policy.

In the case of athletic programs, some companies that issue general liability programs to sports facilities and their directors and boards will underwrite additional coverage. But the carriers typically vary by industry.

This is a high-risk area for insurance companies, so when you apply for coverage, be prepared to show that you’re taking some risk mitigation measures of your own, such as requiring background checks for staff members, implementation of a “buddy system,” ensuring adequate supervision and reducing or eliminating “sleepover” events.

Outlook

Penn State’s liability exposure does not necessarily extend to all of Sandusky’s victims – just the ones abused on campus or at or as a result of officially sanctioned university events. Some estimates, based on the cases already known to the public, peg the University’s exposure to about $100 million. Their endowment could cover that, easily, though it will hurt future programs and scholarships. However, other people may yet come forward with liability claims, and that will take time to work out.

More broadly, we are already seeing a tightenting of the market – liability premiums and molestation and abuse premiums have climbed following the public exposure of the case. But the insurance risk pool should also expand as a result of increased public awareness of the importance of abuse and molestation insurance – especially as distinct from a general liability policy.

Aurora Theater Shooting Provokes Liability Policy Reviews

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While the awful shooting that killed 14 and injured scores more at the Century 16 Multiplex Theater in Aurora, Colorado caused an immense human toll, it’s going to be tough for plaintiffs to collect against the studio or the theater company. The reasons are illuminating, and provide valuable lessons for other venue owners and anyone else who provides access to crowds of people.

As a result, theater and other venue owners across the country are reviewing their own insurance policies, as well as their internal risk management procedures.

At least one suit has already been filed, so far. Torrence Brown, a shooting victim, sued the theater company for failing to place a guard or alarm on the emergency exit door. He is also suing Warner Brothers, claiming the violent movie was contributory to his injury, and the shooter’s doctor.

Legal Hurdles

In one sense, The cinema company’s liability is possibly limited because there was no track record of similar events at the theater to show a pattern of events. No theater company executive or employee could reasonably have foreseen the possibility that a deranged gunman would shoot up the theater. There was no reason to believe the theater was any more at risk for a mass shooting than any other venue hosting a large crowd of people anywhere. There was not even a communication of a threat.

Furthermore, hiring armed security guards over and above the presence of routine local law enforcement patrols is not an ordinary and customary procedure for suburban movie theaters in relatively low-risk areas, though some theater managers will hire off-duty law-enforcement officers for security for special occasions. There simply isn’t much room to demonstrate that the theater owners or managers were negligent in not posting armed guards in or near the theater.

But the exposure is there, nonetheless. Plaintiff’s attorneys will point to the unique nature of the Batman opening, the fact that it was a midnight showing with a large crowd expected, and they will point to the lack of any alarm system or controls on the emergency exit through which the killer left and then reentered the theater.

And experienced trial attorneys know you cannot always trust a jury to make the expected ruling. Juries have minds of their own, and frequently surprise both plaintiff and defense counsel. The risk is there any time a case goes to trial.

Because of the notoriousness of the case, the relatively large number of wounded (who are racking up medical bills), the disabled potentially requiring a lifetime of care and compensation for a lifetime of lost earnings, and the wrongful death related claims on top of that, the potential is there for a huge award is certainly there.

Importance of a High Limit

It’s tough to find good news in the case, but it is fortunate that these kinds of events are so rare. Because of their high-severity and low-frequency nature, public liability insurance against mass casualty events such as the Aurora theater shooting lend themselves well to the insurance solution. Large amounts of liability coverage – sufficient to cover potential claims from an event like this many times over – can still be obtained at a very affordable premium. Because events like this are so rare, there are many, many theater companies paying into the risk pool.

But you do need to be proactive in reviewing your coverage.

We don’t yet know the total potential liability involved in this case. We are still counting the cost of the medical bills, lost wages, and trying to put a dollar figure on the tragic loss of life. But damages of up to $10 million per plaintiff are not totally unimaginable.

Few people can look at the facts of this case and blame the theater staff or ownership. The lack of an alarm system on a door should not result in the bankruptcy and liquidation of a thriving business providing livelihoods to scores of people. That’s where insurance coverage comes in.

Countermeasures

If you own a public venue of any kind, take a good, hard look at your deductibles and insurance benefit caps for a situation such as this. Wargame the scenario: If this happened at your business, could your business survive? Would you become personally devastated because of the actions of a deranged individual beyond your control?

Talk to your insurance agent, and go over the language of your existing general liability insurance policies. You may find you need an additional policy, called a “public liability policy.” This coverage is designed to protect public venues and other businesses that frequently bring in large crowds of people. If something should happen on the premises – a shooting, a structure collapse, an explosion, a terrorist strike –  public liability coverage would provide needed protection your general liability and/or umbrella coverage may not be sufficient to provide.

You may also want to go over your own security measures and emergency response procedures. Do you have adequate security, given your neighborhood and the likely risk? Will it make sense to install metal detectors? Hire additional security, either permanently or for special events? Install security cameras, alarm buttons?

The Department of Homeland Security has created a checklist of measures to take, which theater groups have forwarded to their membership.  But it is up to you to apply common sense to your particular situation, using the facts on the ground, as well as ensure you have insurance coverage adequate to protect your business from catastrophic events such as the Aurora shooting – however remote the likelihood.

Why Mechanics’ Liens are Valuable Tools for Contractors

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Mechanics’ liens are tools used by contractors to obtain payment owed for a project. If this type of lien is filed against the owner of a project, that individual will not be able to refinance or sell the property before paying off the disputed amount. When used properly, this lien is a great form of payment insurance for a licensed contractor.

Issuing A Preliminary Notice
Contractors or subcontractors who do not have contractual relationships with a project owner must give preliminary notice within the allotted time limit. In most states, the time limit is 20 days before filing the lien. In addition to giving the owner a preliminary notice, the serving party must provide the general contractor and lender with a copy. A detailed bill and statement outlining every service performed must also be provided by the contractor.

The Filing Process
This process differs from one area to the next. These liens are available to nearly any person who provides services, labor or materials for a construction project. It is important to remember that a lien is meant to gather payment from the property itself instead of the owner’s personal funds. If necessary, a contractor may take the owner of the property to court to enforce payment. When such a judgment is upheld, the court will order the property to be sold at auction to satisfy the lien.

The lien must be recorded in a timely manner at a state or local office in the county where the named property is located. If the contractor who is filing the lien does not have a license, the document will be considered invalid. The law is also not available to suppliers providing materials to other parties instead of providing them directly to the project site.

Issuing Stop Notices
These notices are not available to claimants who have a direct contractual relationship with a project owner. When issued, a stop notice will apply against the amount that has not been paid by the project owner. The funds are frozen to allow the lender or owner to issue the proper amount to the unpaid workers.

Revoking A Stop Notice Or Lien
After a lien has been recorded, a court action must be filed by the claimant to enforce the lien. This must be done within the established time limit. If no action is filed within the allotted time, the lien is considered invalid. However, there are many title companies that do not acknowledge this fact, which means the lien must be removed before a clear title can be issued to the next buyer. The simplest solution for clearing a lien is to ask its holder to file a release form. If the holder refuses to do this, the liable party may ask the court to remove the lien on the property.