Archive for March 2011

What NY Surety Underwriters Look When Evaluating a NY Bonding or NY Surety Line of Credit:

March 15, 2011

Overseeing Risk :

The surety analyst concentrates on an applicant’s financial and functional historical records to predict future losses or succes. They also like to look at your  business plans and ability to successfully achieve the plan,. What’s the track record been? They also like to look at existence of the buyout plans as well as the  members included. What they are really looking for here is your historical track record. Past performance is an indicator of future results. If that being the case what does your historical record financial and otherwise say about your organization. Remember , a NY Surety Underwriter for all intentive purposes becomes your silent partner. If you can’t walk the walk they must step in at great cost and effort. Thus they really, really , really want to make sure you are worthy of a Bonding line, how much, and for waht type of work?

Changing Possession of Insurance Risk :

You can be financially affected because risks can’t be transferred. Contractors and businesses buy insurance to transfer the risk of loss to an insurance company, the third party. The surety underwriter requires information such as you insurance carrier, policies, coverage terms e.t.c. to make sure risk is properly transferred as it should be.
Protecting the Balance Sheet :

The surety underwriter will focus on your insurance program and make sure that you are gaining proof that others have enough insurance to support their defense and payment commitment to you. Your balance sheet is protected by your insurance on your own company and others who carry insurance. Making sure you have proper risk transfer with your subs is a very critical piece to the puzzle. The surety underwriter will review your master sub contract agreements to make sure they are tight and restrictive while inuring to your benefit. Remember if a loss occurs both the NY Surety Underwriter and your NY Construction General Liability Carrier should be last in line. The subs insurance carrier, by virtue of your master sub contract agreement should be the first pool of capital that responds to most all job site losses. To this end we wholly recommend hiring an outsider vendor to vet the insurance for each and every sub contractor that. They have professional staff that speak the language of insurance , not an assistan Project Manager that knows so very little about insurance  thus getting double talked by the subs insurance broker into accepting a Certificate of Insurance rather than confirming the coverage contained in the sub contractors insurance policy is in congruent with the Master Sub Agreement signed by the sub obligating them to carry the correct insurance coverage. We recommend either the SubShield , orThe Risk Rocket
Financial Assurance
Surety underwriters affirms a bond depending on specific representations in addition to the financial circumstances of the principal. As soon as the bond is released, it can’t be taken back if the principal experiences an uninsured loss. If a surety experiences a loss, it has the right to be reimbursed by the principal and guarantors/ business owners. Uninsured losses financially affect both the principal and guarantors.

Tools to Manage Risks
Risk management tools can help you protect your business financially and create stability in-case of an unpredicted event.

Restricting Compensation
Compensate a party for the events that are able to be manipulated. You can’t control the actions of  compensated party and must try to avoid compensating for the party’s carelessness. Try not to be ambiguous by assuming responsibility for everything and anything. Liability policy acknowledges property damage and injury caused by negligence.

Get Real
Insurance conditions pertaining to your business or those that you appoint to others subsist to defend the compensation plan in the contract. Your liability insurance will respond to stated insured contracts. You have to be rational in your insurance agreements.

Evaluate the Risk
A misconception is believing that only significant value contracts result in great losses. It is in your best interest to evaluate the possible risks and seek appropriate liability limits.

Other Risks
Many contracting companies have many risks and choose to neglect them and don’t evaluate the possible financial effects. Many usual coverages do not include specific coverages.

What to Protect
You must insure what you can’t financially manage to loose. The number of loss costs more than the severity of the loss and the higher your experience mod.

If you suffer with high experience modification and want to find a solution to mitigate your losses, contact Metropolitan Risk Advisory