قالب وردپرس درنا توس
Home / Insurance / California’s New Employee Responsibility Management Act Explained | Property Insurance Law Team Blog

California’s New Employee Responsibility Management Act Explained | Property Insurance Law Team Blog



Property insurance applicants are entitled to reasonable compensation for the costs of restoring their property to condition prior to the loss, including the cost of appropriate contractor supervision of subcontractors and other management tasks.

Supervision costs must be paid before they arise as part of each insured’s right to an immediate actual cash payment. The term “supervision” is not defined as “struggle”, but that is essentially what it means when it comes to insurance claims. Conveyor adjusters are trained to focus on and reduce the cost of construction monitoring when making their first actual cash value payments. Supervisory costs, such as labor, are “whales”

; for a carrier adjuster as they can be one of the largest trading categories and easiest to attack before costs arise. Instead of discussing equivalent repairs and quality repairs, which may be about using the right line in Xactimate, supervision is about the necessity of contractor monitoring of subcontracting work, which can change from project to project without any industry standard rule of thumb. The carrier can and will find a nice contractor or construction consultant to estimate the work without the inspection costs.

This carrier behavior is about more than reducing costs per claim. The carrier wants to reduce the contractor’s profits to discourage them from taking insurance jobs, channel the work back to a preferred one who will certainly send change orders along the way, but at that point, the carrier-friendly supplier controls the entire reconstruction process.

Insurance companies often lack legitimate grounds to contest these claims. Supervision can often be appreciated without the insured first incurring them out of pocket or obtaining a detailed estimate from a contractor before signing a construction contract. Software such as Xactimate can provide a baseline for local hourly rates, which can be changed after consultation with contractors in the field. The hours needed are often a function of the complexity of the job. Insurance companies, often unable to combat pricing, therefore claim that the job is less complex and requires fewer hours. In other words, the subcontractors are competent enough to find out the job themselves with little or no supervision by the responsible contractor.

California recently adopted AB 830, which helps combat this systemic evil belief. AB 830 clarifies both the amount of supervision a contractor must provide on a project and the definition of supervision. Existing law allows contractors to supervise a project through a “responsible executive”, previously defined as “an individual who is a bona fide employee of the applicant and is actively involved in the classification of work for which the responsible executive is a qualified person of the applicant. on behalf of. ” AB830 changes the definition of “senior manager in charge” and defines “a bona fide employee of the applicant” to mean an employee who is a permanent employee of the applicant and “actively engaged” to mean to work 32 hours per week, or 80% of it the total number of hours per week that the applicant’s business is in operation, whichever is less, so there is now a requirement for supervision.

The law also clarified what supervision is. Under previous law, supervision was referred to only as the process of “exercising direct supervision and control over its employer’s or client’s construction activities as necessary to ensure full compliance with the Contractors ‘State License Law and the rules and regulations of the Contractors’ State License Board.” Now the law defines “supervision or control” for these purposes as direct supervision or control or monitoring and to be available to assist others to whom direct supervision and control has been delegated, and “direct supervision or control” to mean supervision of construction, management construction activities by making technical and administrative decisions, checking jobs for proper execution or monitoring on construction sites.

The new law is in the amended Cal. Bus. & Prof. Code § 7068.1, where it says:

(a) The person who qualifies on behalf of an individual or an undertaking under paragraph (1), (2), (3) or (4) of Subsection (b) of section 7068 shall be responsible for exercising supervision and control over: its employer’s or principal’s construction activities to ensure compliance with this chapter and the board’s rules and regulations. This person shall not act as a qualified person for another individual or company unless any of the following conditions are met:

(1) There is a joint ownership of at least 20% of the equity for each individual or company for which the person acts in a qualified capacity.

(2) The additional company is a subsidiary of or a joint venture with the former. “Subsidiary”, as used in this subdivision, means any company that owns at least 20% of the equity owned by the other company.

(3) In the case of an enterprise under paragraph (2), (3) or (4) of Subsection (b) of section 7068, the majority of the shareholders, officials or managers shall be the same.

(b) Notwithstanding paragraphs (1) to (3), including, in subdivision (a), a qualified individual may act as a qualifier for a maximum of three companies over a one-year period.

(c) The following definitions shall apply to this section:

(1) “Company” means a partnership, a limited partnership, a corporation, a corporation or any other combination or organization described in section 7068.

(2) “Person” is restricted to natural persons, regardless of the definition of “person” in section 7025.

(3) “Monitoring or control” means direct monitoring or control or monitoring and being available to assist others to whom direct monitoring and control has been delegated.

(4) “Direct monitoring or control” means any of the following:

(A) Monitor construction.

(B) Management of construction activities by making technical and administrative decisions.

(C) Check job for proper execution.

(D) Supervision of construction sites.

(d) The Board shall require any applicant or licensee who qualifies by acting as a qualified person to provide detailed information on the qualified person’s duties and responsibilities for the supervision and control of the applicant’s construction activities, including, but not limited to, an employment statement. by the qualifier’s employer or principal. Failure by an applicant or licensee to provide the information required by this subsection constitutes an infringement of this section.

(e) Violation of this section shall constitute a cause of disciplinary action and shall be punishable by an offense punishable by imprisonment for a term not exceeding six months, with a fine of at least three thousand dollars ($ 3,000), but not exceeding five thousand dollars. ($ 5,000), or with both a fine and imprisonment.


Source link