Optimism. It was a favorite theme of our parents when they told us to hold our heads high and keep our chins up. We heard it from coaches and teachers who suggested that we should look on the bright side of things. “Count your blessings” is advice often heard from friends and counselors. Optimism is a recurring element in books, movies, and music. If we try hard enough, we can almost hear Louis Armstrong urging us to “Grab your coat, grab your hat, leave your worries on the doorstep. Just direct your feet to the sunny side of the street.”
Optimism has been described as hopefulness and confidence about the future or about the successful outcome of something. Most of us have lived long enough to know that an optimistic path filled with hope feels much better than a pessimistic one characterized by a sense of dread or despair. Medical and psychological research suggests that there are tangible and even provable positive effects when we live our lives optimistically.
Optimists feel healthier. If we tend to believe that life will work out in our favor, we are more likely to rate our sense of well-being and health higher. Optimists have a lower incidence of cardiovascular disease and better cholesterol numbers and are generally healthier. Optimists live longer, and their immune systems are stronger. They tend to have better relationships with others, they enjoy their work more, and they are less prone to stress.
Being an optimist makes emotional, medical, and psychological sense. Sometimes, however, troubling circumstances can make even the most happy-go-lucky person worry, and doubt can creep in causing us to become, well, pessimistic. In these days of the twenty-four-hour news cycle and with the explosion of social media, it seems that, everywhere you look, someone is dying to tell you how bad things are and how worse they are going to get.
This constant drumbeat of negativity can affect people in all walks of life, and builders are not immune from the stories that affect us all. Some stories, however, hit closer to home with builders. Labor shortages and supply chain problems have lingered after the pandemic and still have not been resolved. War in Europe has spooked financial markets and wreaked havoc on the price of oil. Inflation and the resultant hike in interest rates have made some homebuyers skittish and have driven some out of the market altogether.
When we think about these circumstances, we could hang our heads or mope around. But it is important, even in times like these, to be optimistic and to consider the words of Benjamin Franklin who wrote, “While we may not be able to control all that happens to us, we can control what happens inside us.” That is, we can choose to keep our chins up, count our blessings and look on the bright side of things. We control what happens inside us by staying optimistic, and in that way, we continue to enjoy life and reap the benefits that optimism brings.
Not letting these kinds of problems affect our mood or our outlook on life is healthy, but thinking positively about the future will not make the problems go away. What is an optimist to do in these circumstances? The great British statesman Winston Churchill answered this question when he wrote: “The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty.”
Rather than wringing his hands over a tough economy, the optimist looks for whatever opportunities these difficult times present. If we are not as busy building houses, we can identify our best workers and subcontractors and do those things necessary to keep them in the fold. We can also cull those who are problematic, who are not team players, or who do not fit into our long-term plans. We can analyze the market and check to see if the designs we offer our customers are consistent with current trends. We can sharpen our pencils and decrease expenses by finding the best value in building supplies and by looking for more efficient ways to build our homes. By seeing these opportunities in our present difficulties, the optimistic builder can make his company stronger and come roaring out of these doldrums at the helm of a better and more profitable company.
Making money from the work that goes into creating a business and running it well is good, but keeping those hard-earned dollars is even better. We believe one of the best ways for you to protect your bottom line and to hold on to more of your profits is to place an RWC warranty on every home you sell. After closing on a home, you can get on with building the next one, confident that your homebuyers are in good hands and that any construction defect claims they have will be handled with the utmost care and professionalism.
In our more than four decades of home warranty experience, RWC has covered more than four million homes. We offer a wide variety of warranty options, like our standard ten-year warranty, our Day 1 coverage warranty, our extended appliance and system warranties, and our specialty warranties for remodeling projects, detached garages, and commercial construction. Only RWC has developed and offers its members a customized state warranty that mirrors each state’s statute of repose and accommodates other state-specific issues. All RWC warranties provide clear performance standards that help create realistic homeowner expectations and provide a road map to resolving even the stickiest customer complaints.
At RWC, every guarantee our warranties make is backed by Western Pacific Mutual Insurance Company, RRG. Western Pacific has an A- rating from A.M. Best and only insures home warranty and similar new home construction risks, like builders’ general liability, which can be offered through the RWC Insurance Advantage program to RWC members. No other warranty company has an insurer with this kind of strength solely dedicated to covering builders and their homes.
We are optimists here at RWC, and we know life is better on the bright side. Here’s hoping your homeowners and you join us there!
Have a great Summer!
MHWC, RWC's sister organization providing manufactured home warranties to HUD-Code Manufacturers and Builder/Dealers, is excited to announce the launch of their newly redesigned website.
The streamlined menu is easy to navigate and the modern layout lends itself to a faster and better user experience. Have a look! Maybe you'll discover something new about the MHWC warranty. Our current and prospective members will find detailed info about our warranty products, instructions on how to become a member, resources for existing members, tradeshow schedules, FAQ, and can even contact us through one of the convenient online forms.
Hypothetical situation. Let's say you've been contracted to build a custom home by someone who was referred to you by a satisfied customer. This individual owns the land and is financing the project out of his own pocket. You are the general contractor with complete authority over the entire project. The single family home you're building is a typical design and requires nothing out of the ordinary. Construction proceeds without a hitch. Then, with the house about 80% complete, fire breaks out in the basement on a Sunday night. The fire department determines a homeless person had decided to camp out in the unsecured structure and started a small fire to keep warm. Of course, it quickly got out of control and now more than $200,000 in materials have literally gone up in smoke.
Your customer thought you were responsible for buying Builders Risk coverage as the general contractor. You were sure they had agreed to purchase a policy as the owner of the project. The written contract makes the general contractor, you, responsible for "all insurance." So you lose that argument. As someone who knew what they were talking about once observed, insurance isn't important until you need it. In trying to figure out what went wrong, you conclude that you have had to finance most of your projects in the past. That meant getting a construction loan from a bank. They won't lend a dime without proof of builders risk. In this case, there was no loan officer to dot all the i's and cross all the t's. Life is in the details.
Thankfully, this is only a hypothetical situation. Few professional builders would make such a mistake...right? Don't take chances. The RWC Insurance Advantage offers Builders Risk coverage almost anywhere in the United States for virtually any size residential construction project through Zurich - number one in Builders Risk insurance.
For more info or to get a quick quote:
www.rwcinsuranceadvantage.com
866-454-2155
Warranties vs General Liability – What’s the Difference?
Basically, a warranty covers workmanship issues while general liability covers damage to property and/or injury to people caused by such workmanship issues. A warranty and a general liability policy actually cancel one another out. This can lead to trouble. For instance:
When your general liability insurer and your warranty company aren’t affiliated, you can find yourself in a litigious situation with both parties pointing their finger at each other. A good example is a home that has a failing beam (maybe it wasn’t spanned properly). The floor is sagging, but the beam hasn’t given way yet; however, it’s obvious that the beam will fail in time. Is this a warranty issue or is it a general liability issue? 
While the beam holds, and no other property has been damaged, and no one has been hurt, any general liability insurer would say this is a problem for the warranty company. Then the homeowner submits a claim for kitchen cabinets that have pulled loose due to stress caused by the sagging beam. They also ask to be reimbursed for hotel expenses they incur because they are afraid to stay in the house. Would a warranty provider cover these things?
At this point, we enter a gray area resulting in endless debates over who is liable. With the RWC Insurance Advantage working with RWC, there are no gray areas; no "is it a liability loss or a warranty claim?" If it is a covered loss, either way, you (the builder) won't get caught in the middle.
So, which makes more sense? Two companies that are better at finger pointing and keeping you in that scary gray area? OR two companies that work together providing you with comprehensive coverage and making that gray go away? If gray isn’t your company’s favorite color, contact us for a quote!
Warranty Benefits from Residential Warranty Company
- RWC offers a wide variety of warranty options: Exclusive Customized State Warranties, 10 Year Insured Warranties, Remodeling Warranties and more!
- RWC is Experienced with 40 years of experience and over 3.7 million homes warranted.
- Every RWC warranty includes an effective – and FREE – mediation process to resolve disputes.
Insurance Benefits of the RWC Insurance Advantage
- Options to meet your specific needs: Builder’s Risk, Contractor’s Equipment, Excess & Umbrella options and more!*
- Flexibility of limits.
- Competitive pricing and low minimum premiums.
The RWC and RIA General Liability programs are both insured by Western Pacific Mutual Insurance Company, a Risk Retention Group, which has been rated “A- (Excellent)” by A.M. Best continuously since 2001.
*Not available in all states
866-247-2155
info@rwcinsuranceadvantage.com
There’s an old saying that insurance doesn’t matter…until it does. General liability, GL for short, is fundamental to the business world. Most everyone knows that GL protects you from suits and claims brought against you by people injured on your jobsite, or homeowners who allege damage caused by defects in the way a house was built. Beyond this, things get a little fuzzy, which leads to some creative myth-making. Here are the top 5 GL myths we hear all the time:
Counting Down the Myths
#5 - I have Builders Risk. I don’t need GL, do I?
Builders risk only covers your building materials at your jobsites while during construction. It’s property coverage. With limited exceptions on some policies, there is no coverage for a passerby who trips and falls over a piece of scrap lumber that spilled onto the sidewalk and no coverage for construction defect claims later on.
#4 - My subs have GL, so I don’t need it, or do I? 
Your subcontractors better have GL, or their claims become yours. Even if they have their own coverage, you can still be liable for some claims involving your subs. As the general contractor, you’re responsible for overall safety at the jobsite. Are you making sure your subs keep the sidewalks free of scrap lumber and other debris? Even if you police the jobsite every day, when was the last time you required your subs to provide a certificate of insurance? Are you named additional insured on their GL policies? Do they hold you harmless in your written contracts with them? All these things can create liability for you if neglected.
#3 - I do some engineering and design work on the side. My GL covers that, right?
Wrong. If you provide any professional services, you need professional liability insurance. GL doesn’t cover inaccurate advice, misrepresentation or claims involving bad faith.
#2 - I only build one home a year. I’m too small to need GL, aren’t I?
I’ll answer this question with a question – the last time you drove down any highway, how many billboards advertising personal injury law firms did you see? We live in a highly litigious society. Any business, no matter how small, how new, or how experienced is vulnerable to suits or claims by members of the public. Why take chances with your livelihood?
AND THE #1 GL MYTH – I’ve been in business for 20 years and never had a claim. Why should I pay for GL now?
I could answer this by simply saying read #2 again. The fact is you don’t have to purchase GL unless someone else requires it. Usually, some other business or governmental entity wants to see proof that you have GL. Why? To avoid having to deal with suits or claims that you’re responsible for. It’s called contingent liability. In reason #4, if you hire a sub who doesn’t have GL, you are responsible for his claims while working for you because you failed to make sure he had the necessary insurance. Not fair you say? Show me fair.
I hope this little countdown of GL myths helps to convince the previously unconvinced that having the proper GL coverage for your business is just as important as laying the proper foundation for a home. Anything you build on top of a shaky foundation is bound to fall sometime. For the riverboat gamblers out there nothing I say will be convincing. For the great majority of you, it might be time to take a look at your GL coverage needs. We can also handle your builders’ risk while we're at it.
Call us at 1-866-454-2156 or visit us at https://rwcinsuranceadvantage.com/products/general-liability/ for a free, no obligation quote.
As a leader in the residential home building industry, RWC Insurance Advantage is committed to providing general liability insurance and select other coverages to members of RWC. Below are some commonly asked questions:
What is an additional insured?
An Additional Insured is a person or organization that, like you, enjoys the benefits of being an insured under your policy. An additional insured cannot make changes to your policy.
Why should I be an additional insured on my subcontractors’ policies?
When you require your subcontractors to list you as an Additional Insured on their General Liability policies, you become entitled to insurance coverage benefits under their policies. Additional Insured status is most often used in connection with an indemnification agreement, also known as a hold-harmless clause. Hold harmless clauses are common elements of a properly executed contract between you and your subcontractors. Under a hold-harmless, your subcontractors agree not to hold you responsible for their negligent acts which may have happened while they are working for you. For example, if your painter over-sprays several cars parked near the three-story townhouse you are building, the painter’s policy will respond to the claims made by the owners of the cars. If you are brought into a lawsuit filed by the car owners, the painter’s insurance company will defend you.
What if my subcontractor doesn’t have insurance?
If your subcontractor doesn’t have his or her own General Liability, you can be held liable for claims made against the subcontractor. This is because the General Contractor is considered to be in charge of the worksite, and therefore, is responsible for the safety of the public at that site. Beware of policies sold by some insurance companies that exclude claims arising out of the work performed for you by subcontractors.
Ever REALLY wonder why you buy insurance? Many states require you to carry General Liability to maintain a license. Other entities require proof of insurance before you begin any project. The list of those requiring proof of “liability” insurance is long. If you think about it, all that money just to satisfy these demands is frustrating. On top of that, there are builders who have been in business for decades who have never had a “third party” claim. So, what is the real value of General Liability insurance?
Think of it as insurance against “WHAT IFS.” What if a prospect for a home visits your office and trips and falls over a loose rug, fracturing her wrist? What if a subcontractor fails to install flashing around some windows and the homeowner sues you for the resulting water damage years later? What if the person you hired to manage your website posts damaging information about your main competitor and you’re sued for libel? What if a guest at your BYOB holiday party has too much to drink and causes a serious accident on the way home?
If you’re thinking the list of “what ifs” could go on indefinitely, you’re beginning to see just how “general” general liability can be. At the risk of over-simplifying, when it comes to general liability insurance, unless it’s excluded, it’s covered.*
Most people think “sure those things can and do happen, but what are the odds they’ll happen to me?” That’s a reasonable question, but it doesn’t take proper account of the facts. The US Bureau of Labor Statistics and the Centers for Disease Control report the following facts about the most common type of claim:
• 16% of all injuries across all industries are the result of slips, trips and falls.
• 700 fatalities occur each year due to slips, trips and falls.
• $30,000 is the average cost of a slip, trip or fall accident.
• Snow, ice, rain, spills, loose mats, rugs and stepladders are the most common causes of these accidents
“What if” scenarios are endless. Here are two more that everyone should consider: (A) What if you are sued in a liability claim? Do you know what your policy covers? (B) What if your limits aren’t adequate to protect your assets? Can your business survive?
Call us today at 866-454-2155 to discuss your coverage needs. You can also check us out online at www.rwcinsuranceadvantage.com
Stay safe!
(*Not all “what ifs” mentioned in this article would necessarily be covered. Please read your policy carefully to know what coverage you have.)