R&R Insurance Blog

Contract Bond underwriters traditionally screen potential bond customers (contractors) on the basics of 3 C’s Capacity, Character and Credit. The 3 C's are usually defined as:

1. Capacity: to complete the work, the resources of manpower, equipment and track record of completing work in the category of the work contemplated.
2. Character: the background and history of the contractor are positive indicators leading the bonding company to believe the construction company will endeavor to complete the work contemplated.
3. Credit: A combination of financial statement and borrowing history which builds a case that the contractor has sufficient working capital, equity, profitability, and a bank relationship which all will assist the contractor in completing the work contemplated.

It takes a combination of these 3 basic measurement elements to potentially qualify for a bond. Recently with shrinking profit margins, and available work, we are encountering contractors who are strong in relation to capacity and character, but whose credit has eroded over the last few years.

In cases where credit has eroded, surety professionals at R&R Insurance will suggest the use of funds control to secure bonds for contractors seeking bonds in Wisconsin.

Funds control simply stated is a system of parking a job’s revenues in an escrow account allowing the bonding company to be sure that the stream of revenues are going to satisfy job costs associated with the project at hand. Once costs are validated, project revenues are then disbursed by the escrow agent who uses those funds to pay the suppliers, subcontractors, and contractor at regular intervals throughout the duration of a project. This ensures that at the end there is a reasonable expectation that job costs are satisfied and profits can be realized.

Wisconsin contractors interested in improving any of their 3 C's or Wisconsin contractors interested in fund control options should contact Jay Zahn, Surety Specialist at R&R insurance Services.

In June 2011, OSHA implemented their new residential fall protection rules. This short video explains a common sense approach to comply with these new rules. A copy of the new rules can be obtained by visiting www.OSHA.gov. This video addresses how these new rules affect the obligations of the general contractor. These rules apply to any tradesmen that work more than six feet off the ground or a lower level.

View OSHA's directive.

The new rules require fall protection for any employee working on the roof. The historical problem with this approach is that residential structures do not have an obvious attachment point for a harness. Commercial structures usually have flat roofs so a guardrail system can be used in that scenario. The pitched roofs on residential structures, with their gable ends, make the guardrail solution impractical.

By using the DBI Sala U-Bolt Roof Anchor, a personal fall arrest system can be easily attached to a pitched roof. The homebuilder supplies this device.

The framing contractor attaches the anchor to a roof truss while the truss is on the ground.

The roof anchor is easily incorporated into a contractor's use while on the roof.

An additional benefit to the homeowner is that the anchor is a permanent installation. It's there for the homeowner to use for future maintenance needs.

Wisconsin businesses, for more information on OSHA compliance issues contact knowledgebroker Paul Seitz 262-953-7245.