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    Wednesday
    Mar062013

    Understanding the Process & Benefits of Deconstruction

    The process of deconstruction involves structural and architectural components of a building being salvaged or removed before demolition. Remodeling and demolition projects produce more than 50 million tons of debris, which normally ends up in landfills. By hiring special contractors to assist in assessing what materials can be salvaged, the process is optimized. Plumbing, lumber, cabinets, some fixtures, concrete and a wide variety of other materials can be salvaged. After being saved, these materials can then be donated to charity or reused for future projects. In addition to this, it may be possible to gain LEED points or tax credits for some materials.

    Basics Of Deconstruction
    It is important to identify any permit issues and potential hazards. The main concept abbreviation to remember for the actual task of deconstruction is this: LOFO. It means last on is first off, which indicates the last piece of material placed during the construction process should be the first object to be taken out. When the deconstruction process is being carried out, the same tool that was used to install a specific object or material should also be used to remove it.

    During the task of removing materials, it should not be necessary to use excessive force. When contractors find themselves reduced to this as the only option, something is preventing the object from being extracted. Evaluate the surrounding area to see if any alterations were made. If not, continue assessing the area until the source of the difficulty is found. For all projects, it is crucial to use proper safety tools. Employees should also be provided with the right safety gear and other materials. Workers should not be exposed to overhead activities, so work on only one floor at a time.

    To keep safety a priority, plan an escape route ahead of time. All exits and hallways should be free of debris. Another important step to take prior to a project is to obtain an estimate, and one of the best sources for this may be the structure's original blueprints. It is also helpful to know what to do with the material ahead of time. In addition to this, it is wise to have transportation for the materials scheduled beforehand. If the items will be donated, contact a charity such as Habitat for Humanity to arrange a time to receive them.

    Costs Of Deconstruction
    When planning a deconstruction project, this is the main area where people will notice an impact. Research shows that the highest value per labor unit varies for each residential construction component. The most valuable materials include following:

    -Plumbing Fixtures
    -Lighting & Electrical Features
    -Massive Dimensional Lumber
    -Wood Timbers
    -Interior Wood
    -Outer Sheathing
    -Wood Flooring

    Before starting a deconstruction project, people may consider various alternatives. These considerations are what lead people to choose the methods and tools used for the process. Although deconstruction is not a cheap solution, it does come with its own set of benefits. For example, it is better for the environment, reduces landfill waste, results in cleaner air and may be beneficial for charities if materials are donated. In the end, it is possible to create financial, environmental and social contributions.

    Comparing Demolition & Deconstruction Costs
    The United States Army uses the following formula to assess market price for materials: MP = MC + PC + TC + P. In this equation, P represents profit, TC represents transportation cost, PC represents processed cost and MC represents material cost. With demolition, there are rental costs involved when working with waste companies. There are also costs for relocating debris, maintaining equipment, paying workers and purchasing safety gear.

    With deconstruction, there are costs for planning, management, hauling, labor, equipment maintenance and training. If salvaged materials are traded or sold, keep in mind they may be considered revenue. However, the benefits include LEED points, possible state funding and tax credits. In many cases, deconstruction provides a great overall solution for building owners. 

    Tuesday
    Mar052013

    Why Insurance Premiums are Increasing

    Insurance premiums are a function of these factors: The perception of future risks, recent catastrophic claims and the return available on investment. Huge fires and other disasters factor in, such as the Colorado Springs blazes earlier this year and other natural disasters have also forced large payouts. Even the devastating Japanese earthquake and tsunami from 2010 affects insurance premiums in the United States, since insurance companies routinely purchase re-insurance coverage from very large companies. And these reinsurance companies, such as General Re, have been increasing their rates. In addition, jury awards and settlement costs in a variety of commercial fields have put pressure on insurance company reserve funds.

    Yes, insurance companies are just like you: They assess the risks they can cover, and then buy insurance themselves to protect themselves against very large but unlikely events that would overwhelm their reserves.

    We saw a similar tightening of the property and casualty insurance world across the board, in 2001, following the 9/11 attacks on the World Trade Center. The direct costs themselves were significant, but reinsurance companies also increased their rates then, in order to cover their own risks and ensure clients were protected in case of acts of war, nuclear strikes, chemical strikes, etc.

    Fortunately, their worst fears weren't realized, but prudent insurers are in business to cover the worst case scenario, and so they had to plan and set premiums accordingly.

    Fast forward to today, though, and we have a different phenomenon at work. Reinsurers had just started to climb out of the substantial capital shocks of 2008 and 2009 when they got hit with the Japan tsunami, which put pressure on capital pools. But as they work to replenish their reserves, all insurers, all over the world, have been forced to reckon with a new reality: Low interest rates.

    Insurance companies make money in two ways: Bringing in premiums, and investing the "float." Normally, insurers break even or even run a slight loss on premiums. This keeps premiums affordable, but is only possible because they can invest their accumulated reserves at a profit.

    Ten years ago, an insurance company could get 5 or 6 percent on a portfolio of Treasuries. Now that same insurer struggles to get 2 or 3 percent on a AA-rated bond portfolio, and U.S. Treasuries - the traditional mainstay of conservatively-run insurance companies, may well be generating a negative real return after inflation.

    Something has to give.

    That's what we're seeing now: Actuaries have no choice but to increase premiums to cover anticipated payouts in light of the new lower interest rate environment. To do otherwise risks insolvency, which does no service to the insured at all, and even defeats the purpose of insurance.

    The tightening of the reinsurance market, combined with adjustments to account for the lower returns on assets, is now making its presence felt on Main Street: Aggregate commercial insurance ratios increased for the fifth consecutive quarter, and by 5 percent in the first quarter of 2012 alone. That's the biggest increase we've seen since 2004 (remember those summer hurricanes in Florida that year?)

    The two lines responsible for the largest increases, according to a Towers Watson survey, were the two segments most vulnerable to jury award and medical cost increases (workers compensation), and increased reinsurance costs from megadisasters and lower interest rates (commercial property insurance), respectively.

    Insurance markets tend to cycle along with other industries. As reinsurance pools of capital get replenished, or as interest rates rise, allowing carriers to generate more revenue from the "float" rather than rely so much on point-blank premium collection, rate increases tend to moderate, and new carriers spring up to compete for business.

    So if you are seeing rates increase, it's more a matter of prudence in the face of risk and low returns on capital, which affect all carriers everywhere. As a result rates increase to make sure there are enough in reserves to cover future claims . No one is exempt, and it's a bigger issue than any single insurance agency, carrier, or insurance line.

    Monday
    Mar042013

    Are mp3 Players a Safety Hazard at Work?

    "Music hath charms to soothe the savage breast." At least so thought William Congreve, a 17th century English playwright. However, the music Congreve was referring to didn't come out of technological concoctions such as the mp3 player. Had he been alive today, he might be less concerned with the effects of the music and a lot more concerned with the effects of using this technology, especially on the job.

    The mp3 player is fast becoming the method of choice for employees who need their daily dosage of tunes during the workday. While it can be argued that usage of personal music players in the office help employees concentrate by letting them tune out extraneous noise, it should be noted that any productivity gain comes with a price.

    The first safety hazard associated with repeated mp3 player use is a condition that results from the hand movements necessary to navigate through a playlist. The British Chiropractic Association has called the movement "unnatural," stating it separates the joint in the thumb every time the action is performed. The ultimate result of repeating this movement too often is a Repetitive Stress Injury (RSI). In addition to RSI, the prolonged gripping of the device, the repetitive pushing of the small buttons and the awkward wrist movements can lead to carpal tunnel syndrome and tendonitis. As the devices become even smaller with each succeeding product generation, the risk for these conditions will become more prevalent. And as every employer knows, an employee with carpal tunnel syndrome or tendonitis is not only unproductive, but prone to racking up large medical claims.

    The potential for hearing-related problems connected with mp3 player use is another source of alarm. Digital technology permits users to listen to thousands of consecutive hours of music. Older technologies either required users to turn over a cassette or contained only an hour or so of stored music. Either way, the ears had a brief respite from the sound. Also, the higher-quality sound of new music players makes it easier for users to turn up the volume to dangerous levels. High-volume levels can result in tinnitus, a condition in which the sufferer hears continuous buzzing in the ears.

    Many tinnitus sufferers complain of buzzing, whooshing, chirping, hissing, ocean waves and even music in their ears. Some people only experience tinnitus occasionally, while others experience it 24 hours a day. The problem is associated with the sensorineural system, which transmits signals from the inner ear to the brain. An employee suffering from tinnitus is not going to exhibit increased levels of concentration.

    As if this weren't enough, employees walking around with earphones not only block out extraneous noise, but everything else, including warnings of imminent danger such as a fire alarm. This puts them at increased risk for personal injury.

    For these reasons employers who permit the use of mp3 player or other personal music players in the workplace should establish guidelines concerning the length of time an employee can listen and in what areas mp3 player use is permitted.

    Friday
    Mar012013

    Why Your Company May Need Product Liability Insurance

    If your company manufactures any kind of product, from lemonade to engines, computers to clothing, it could easily find itself on the wrong side of a lawsuit by a plaintiff claiming your product(s) caused some kind of injury or damage. In today's litigious society, it is not even necessary for you to be the manufacturer of the product. Sellers are often sued alongside the manufacturers.

    It's only natural that people want to be safe from injury and property damage whether from food poisoning, getting into an auto accident due to tire failure, or having the foundation of their home crack, but how do protect your company from liability? The answer may be with product liability insurance.

    Most liability claims are covered as part of your company's commercial general liability (CGL) policy. However, products that are particularly likely to lead to liability may be handled separately. As part of a sound risk management program, you should know well in advance how your current coverage would respond to such claims.

    The CGL policy covers any bodily injury and property damage occurring away from your business premises that happens as a result of your product or completed work. If a product is consumed on the same premises, such as food served in a restaurant, the policy provides coverage once the insured has relinquished possession of the product whether the injury or damage occurs on or away from the premises.

    The standard policy excludes damage to the product when the damage was caused by some part of the product itself or faulty workmanship in its manufacturing. For example, one small part in a complex, expensive piece of equipment may fail and cause tremendous damage to that equipment. If the part that fails was purchased from an independent subcontractor, the insurer of the manufacturer of that part would cover damage to the equipment. By contrast, if the manufacturer of the expensive equipment itself produced the piece that failed, the damage is not insured under the CGL policy.

    Product liability exposure lasts as long as the product is in use. Someone may be injured or damage may result from use of the product years after it was manufactured and the product may no longer be in production. Product liability insurance should be kept in force as long as the products are being used and could cause injury or damage. Partnerships and sole proprietorships are especially vulnerable. These business owners cannot evade personal liability exposure by taking cover behind a corporate shield; thus, they need to take particular care to keep product liability coverage continuously in force. Because of the continued liability exposure, insurers require insured's to provide detailed information about discontinued products.

    The CGL provides coverage for product liability that may arise when products are sold internationally, but only if liability is determined by a lawsuit in the United States, Puerto Rico, or Canada. Since product liability lawsuits are often filed in the country where the alleged injury or damage occurred, any business whose products are sold overseas will need a foreign coverage endorsement added to its CGL policy.

    Another type of coverage not provided by the CGL policy is the expense of a product recall, though this can be expensive and severely damaging to a company's reputation. Separate product withdrawal expense insurance may be available depending on the particulars of your business and its product.

    The basic premise of most product liability lawsuits is that the product manufacturer or vendor failed to take appropriate steps to insure the product was safe and sound. It is impossible to eliminate all hazards in connection with many products. No matter what you do, someone could fall off a ladder or burn themselves with a hair dryer, and so forth. To show that you did everything possible to prevent such injuries, it is critically important to communicate with buyers and users of the product about such hazards. The thing to remember is that if there is a lawsuit, your best defense is to prove you took all reasonable measures to assure no one would be injured.

    Monday
    Feb252013

    Insuring Success in Your Home-Based Business 

    These days, many employees are becoming home-based contractors for their former employer, or even striking completely out on their own.  You may be among them.

    If you are, remember this: once you are on your own, you will not be covered by your employers' insurance packages.   Because you are busy thinking of all you need to do to start up a new venture-whether you'll be using familiar job skills or new ones entirely- insurance may be the last thing on your mind.

    Think again.  If you forget an essential part of a computer program you are contracted to write and your client loses business because of it, the client may sue.  If your new personal shopping service supplies an item that injures a client...lawsuit!  In each case, an Errors and Omissions policy could have saved the day.

    And then there is the possibility of fire, flood, theft...in short, all the usual risks of living, and then some.  As the owner of a small business, there are three ways you might cover those risks

    1. Homeowner's insurance endorsements: suitable for a small home business with minimal equipment and no business visitors or business deliveries. Beware: the Independent Insurance Agents of America (IIAA) advises against this minimal coverage.  Your personal agent might, too.

    2. Home office policy/in-home business policy:  this offers business liability and lost income replacement, as well as other usual risk coverages.

    3. Business owner's policy:  This provides the most comprehensive safeguards similar to those found in commercial policies, but with prices designed for the home-office market.

    If you are like most new home-business owners, you may think your homeowner or renter's coverage will be enough.  That is too bad, because in many instances, your current homeowner's policy won't be enough.  It may even exclude business use of your home entirely.  Even if it does cover business use, it is likely to be for very small amounts, $2,500 on premises, and as little as $250 for losses off-site, such as a stolen laptop.

    Plus there is the vital issue of business data.  Suppose a scenic stream runs across the back of your property...and it floods in a hurricane and floats the books, files, and software needed to run your business, bill your clients, and collect fees.  Unless those things are covered under a home office or business owner's business policy, it is unlikely the loss will be covered at anywhere near what it will cost you to reconstruct all that information.

    If someone slips and falls on the muddy walkway, trying to visit you the day after the flood for business purposes, your homeowner's policy probably will not cover that, either. 

    And then there is the issue of business slipups like those mentioned above.  No matter how good you are at what you do, no one is perfect.  You will want to consider coverage so mistakes do not put you out of business.

    Before you begin your consulting arrangement or new business, sit down and discuss with your insurance agent all the risk factors you could be facing.  You may not be able to afford to cover every risk right away, so ask for your agent's help to prioritize the risks.  If, for example, customers will not be visiting your office for a while, leave that liability coverage out for now.  But if you will visit customers and bring equipment along, cover this risk; you need that equipment to do business, after all, and your business will suffer it if is lost or damaged.

    Remember to consider your vehicle use, too; will you use public transportation to visit clients, or your personal car?  Will your personal policy work, or would commercial insurance better provide the best protection?  If you are buying a van or truck especially for business needs, there is ample reason to consider commercial vehicle insurance.

    Finally, consider the possibilities if you becoming ill or are injured and cannot work.  By going out on your own, you have lost the safety net of the disability insurance your former employer most likely carried.  If you have a working spouse, you may be able to delay obtaining disability insurance for a time, but it is one of the coverages most people feel a lot more comfortable having, working spouse or not.

    Once you have prioritized and decided upon your initial insurance package, remember to speak with your agent periodically and to add those coverages that you put off for cash flow reasons, or simply did not need at the time.

    Sidebar:

    Getting to the Heart of the Matter

    Use questions like these to determine the nature of your new work arrangement or business and to help prioritize your insurance purchases:

    ·        What type of equipment do you have and how much did it cost?  How much to replace?

    ·        Is the equipment dangerous?

    ·        Does your business own any property?

    ·        Where do you conduct business--home or client offices or your own premises?

    ·        Do you need a vehicle for business?

    ·        Do you have or plan on having employees?

    ·        If you make an error, can a customer sue you?

    ·        If building damage happens, from fire to flood, will it shut down your business?

    ·        Do clients visit your home to transact business?

    ·        Do you take expensive equipment to client sites?

    ·        If you are injured and can't work, where will you derive an income?


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