INSURANCE & MORTGAGE

Prep now for buying a home – Movement Mortgage Blog

The home-buying process is extensive and can be overwhelming – especially for new homeowners, and even more so if you don’t do your homework.
If you’re in the market to buy, now’s the time to start preparing; and we’re here to help.
We interviewed two industry experts to help homebuyers prepare for a purchase. Movement Mortgage Loan Officer Leslie O’neal and Mirambell Realty Real Estate Agent Christopher Cazenave share their expertise:
Get Pre-Approved
The moment you decide to buy a house, work with a lender to get pre-approved for a mortgage loan. Knowing how much you qualify for will narrow down your options and help direct your search.
 A word of caution, though: don’t overextend. Just because you qualify for a $250k loan, doesn’t mean your home should cost $250k. There are other expenses to consider, like interest payments, homeowners insurance and taxes.
Prioritize your Priorities
After you have an idea of how much you’d like to spend, decide on the lifestyle that suits you and your family. Consider factors like proximity to good schools, convenience to shopping and entertainment, how much land you’d like, and so forth. Deciding what’s most important to you will help further focus your search.

Start Saving
Most lenders require a down payment towards your mortgage loan, which could be up to 20%. If you don’t have enough money at your disposal, save for a bit longer or perhaps borrow against your IRA or retirement account (be sure to read the terms first, though!)
Despite how you come up with the deposit, be sure you can prove the source of the funds. Lenders won’t accept cash payments, and if your down payment was a gift from a generous giver, be prepared to provide a gift letter.
Count the Cost
You should also be prepared for other out-of-pocket expenses during the home buying process. You’ll need money for things like closing costs and home inspections before your close, and furniture, appliances and utilities afterwards. Do your homework to understand how much money you’ll be paying upfront and save accordingly.

Credit Matters
Be extra careful with your credit during this process. Review your credit report and make sure there are no inaccuracies. Avoid opening new credit accounts and making major purchases. Several inquiries can negatively impact your credit score, which can impact your loan decision and your interest rate.
Enlist a Pro
When it comes to finding your dream home, don’t go at it alone. A qualified real estate agent is familiar with the ever-changing real estate market, can guide you through the process (including contract negotiations), and help you make a wise choice, considering your budget and lifestyle needs. They also share tips and tricks with you along the way to save you time and money.

Clean House
Once you find the perfect home, you’ll be moving in a matter of weeks. Take time early in the process to get rid of items you don’t want to bring with you. For inspiration, read our list of creative ways to purge. Starting early will make it easier to pack when the time comes.
Take Some Time
The home-buying process doesn’t happen overnight. Carve out time in your schedule for conversations with your lender and realtor, home inspections, closing meetings, and so forth. As you get closer to your move date, consider taking time off work to pack, move, and get settled in your new place.
Get an early start and you’ll soon be enjoying a new home. […]

INSURANCE & MORTGAGE

Movement #heartsforhouston shirt raises money for hurricane relief – Movement Mortgage Blog

Movement Mortgage is now accepting orders for a custom-made #heartsforhouston T-shirt that will raise money for Hurricane Harvey relief efforts.
The shirt, emblazoned with an outline of Texas and the words, “Texas-Sized Hearts for Houston,” costs $20, all of which goes to Houston relief efforts.
The sale ends Sept. 8.
The Movement Foundation is underwriting the cost of the shirts so the full $20 goes directly to disaster relief. Movement CEO Casey Crawford says the shirt is Movement’s way of showing solidarity with those affected by the storm.
“In addition to encouraging our employees to contribute to our Love Works program which we are using to serve our Houston family, we have also created the #heartsforhouston T-shirt to raise funds. Our hope is that this shirt campaign not only delivers much needed financial support, but awareness as well,” Crawford says. “Jesus noted the great foundational commandments in Mark 12, with the second being ‘Love your neighbor as yourself.’ This immediately comes to mind when I see corporate America rallying in such an impactful way during these tragic times.”
Movement has 154 employees in Texas and 17 in Houston. All employees have reported that they are safe, however several of them had to be evacuated from their homes and others experienced property damage.
Movement is meeting the needs of its employees through Love Works, an internal employee-driven program that provides assistance to team members dealing with financial hardships.  
After making landfall in Texas last weekend, Harvey, the biggest rainstorm in U.S. history, battered the Lone Star State with torrential rain and historic flooding. The devastation has displaced thousands of residents, and the death toll has climbed to nearly 40.
The slow-moving storm, which began as a Category 4 hurricane before turning into a tropical storm, made landfall again Wednesday. Houston, the fourth-largest city in the U.S., has been among the hardest hit areas.

Mandie Spear, a Movement graphic designer who created the shirt’s design, said she wanted to convey that Movement is actively seeking to help Houston, not just sympathizing from a distance.
“I wanted to do something that wasn’t just ‘Praying for Houston,’” Spear says. “I came up with the idea of doing ‘Big Hearts for Houston’ and switching it out with ‘Texas-Sized Hearts for Houston’ since everything is bigger in Texas. I’m glad that 100 percent of the sales are going directly to those in need.” […]

INSURANCE & MORTGAGE

Movement Mortgage Blog – Experience the Movement of Change

Movement News January 15, 2021

Movement Mortgage, the nation’s sixth-largest retail mortgage lender, has promoted Chief Performance Officer Mike Brennan to company president, a new role that will lead all operations and sales functions across the organization.
… Continued […]

INSURANCE & MORTGAGE

How Does Refinancing Affect My Property Taxes? | PennyMac

When you refinance your home, the process is similar to the one you followed when obtaining your original mortgage. Your finances will be verified and calculated, and your home will be appraised to determine its value to your potential lender. However, PennyMac also has many streamline products that don’t require income or asset verification. There are also products that do not require an appraisal. As a result of a refinance, it’s common for your monthly payment and even your total loan amount to change — but will your property taxes go up?
The short answer is, “No.” Your property taxes will not go up if you refinance, but let’s dig a little deeper in order to clear up any confusion or concerns.
Ready to refinance now? Check out our many refinancing options here! You’ll also find the tools and answers to common questions to help determine the best choice for you.
Appraisal, Purchase Price, and Assessment
To understand this topic completely, it’s first important to know that there are three ways that a value can get assigned to your home: your appraisal, your purchase price, and your assessment. The following demonstrates how each is defined.
Appraisal — Your lender won’t fund a loan for more than your house is worth. This is how they protect their investment in you: they want to make sure that your home is sufficient collateral. In other words, they need to know your home is worth an amount equal to (or more than) the amount of money they are lending you. In some cases the lender will determine the value of your house by ordering an appraisal as part of the homebuying process — and again when you look to refinance into a new loan. Some products do not require an appraisal to refinance.
Purchase Price — Most homebuyers are able to buy their homes for an amount equal to or less than the appraisal price. In very competitive markets, buyers may pay more than the appraised value of a home in order to “beat” other interested buyers. As borrowers typically can’t secure a loan for an amount higher than the appraised value, this is usually done via a larger down payment or by buying a home without a loan.
Assessment — Your assessment is the value that your city, county, or other municipality has determined that your home (and the land it occupies) is worth. Typically updated on an annual basis, your assessment is the only one of these three numbers that is used to determine your property tax amount.
Very few homeowners will have an appraisal, purchase price, and an assessment that all match exactly. However, these three numbers are typically fairly close, unless you are in a competitive or otherwise unique real estate market.
Learn more about home buying in competitive markets in our interview with housing industry experts.
How Your Property Tax is Calculated
There are two numbers used to calculate the total amount that you pay in property taxes each year: your assessment and your tax rate. If your home is assessed at $300,000, and your tax rate is 3 percent, you’ll pay $9,000 a year in property tax. Your property taxes will only go up if your rate or assessment amount increases, and refinancing your home (including the appraisal) does not impact either of these numbers.
The only way that you can connect the refinance process to your property tax amount is as a type of forecast or prediction. If you are in a hot real estate market with rapidly increasing home values, an appraisal amount that is much higher than your assessed value can be seen as a warning that your assessment (and therefore your property tax amount) may increase in the future.
This prediction is not always accurate or instant, however. Assessment value changes occur at a much slower rate than housing market prices, and are typically only adjusted once per year. In addition, many municipalities have laws regarding how much property taxes can be increased within a specific amount of time.
Refinance Fearlessly
If you’ve been hesitant to start the refinance process because you’re worried your property taxes will increase, you can put those fears to rest. Refinancing won’t impact your property taxes, and it offers many other benefits that can help you reach your financial goals. Explore your refinancing options by starting with our online application or contact a PennyMac Loan Officer today! […]

INSURANCE & MORTGAGE

Foreclosure activity drops in 2020 as backlog builds up

Foreclosure activity in 2020 plummeted 57% from 2019, but that could change dramatically once government moratoria expire, according to Attom Data Solutions.
Foreclosure filings totaled 214,323 properties — or 0.16% all U.S. properties — the lowest sum since Attom started its tracking in 2005. Comparatively, 2019 had 493,066 filings representing a 0.36% share of all properties. These numbers peaked at 2.9 million and 2.23% in 2010.“There is a backlog of foreclosures building up — loans that were in foreclosure prior to the moratoria; loans that would have defaulted under normal circumstances; and loans whose borrowers are in financial distress due to the pandemic,” Rick Sharga, executive vice president of Attom’s consumer-facing business, RealtyTrac, said in the report. “While it’s still highly unlikely that we’ll see another wave of foreclosures like the one we had during the Great Recession, we really won’t know how big that backlog is until after the government programs expire.”
Although they dropped 80% from the year before, December’s foreclosure filings rose 8% month-over-month to 10,876 properties.

Delaware had the highest statewide foreclosure rate in 2020, at 0.33%. It was trailed by New Jersey’s 0.31% and 0.3% in Illinois. This marks the first time New Jersey hasn’t topped the list since 2015. The highest foreclosure rates at the metro level came in Cleveland, Chicago and Baltimore with rates of 0.34%, 0.3% and 0.29%, respectively.
Lenders repossession through foreclosure also hit a low point of 50,238 properties, down 65% from 143,955 in 2019 and 95% from 2010’s high-water mark of 1.05 million. In December, lenders took back 1,972 properties through completed foreclosures, down 2% from November and 86% from December 2019.
Foreclosure starts also sank to a record low, falling 61% to 131,372 units in 2020 from 335,985 in 2019 and down 94% from 2.14 million in 2009. At the state level, Oregon decreased the most annually at 79%, followed by declines of 77% in Arkansas and Kansas, and 71% in Nevada. Only Idaho saw an increase in foreclosure starts, climbing 4% from 2019. Among metropolitan areas with populations over 1 million, Jacksonville, Fla., and Las Vegas both dropped 74%, with Washington, D.C., and Memphis, Tenn., right behind at 72%.
“The impact of the government foreclosure moratoria and mortgage forbearance programs is nowhere more obvious than in the foreclosure start numbers from 2020. We ended the year with a near-record number of seriously delinquent loans, but historically low levels of foreclosure activity,” Sharga said. “The question remains how many homeowners whose finances have been affected by the pandemic will ultimately default on their loans, and whether the strength of the housing market will help cushion the fallout.” […]

INSURANCE & MORTGAGE

Mortgage industry reacts to FHFA-Treasury’s GSE reform deal

Much of the mortgage industry applauds the agreement between the Federal Housing Finance Agency and Treasury, which in addition to allowing the GSEs to hold more capital, codifies the pricing requirements for loans sold to the government-sponsored enterprises, no matter the lender’s size.
The Community Home Lenders Association made guaranty fee parity its top GSE priority, repeatedly calling for the amendment of the Preferred Stock Purchase Agreements to require that as a condition for exiting conservatorship.
Making that permanent “is important to smaller lenders, to borrowers, and to reducing the ruinous volume discounts to lenders like Countrywide that contributed to the GSEs’ conservatorship in 2008,” Scott Olson, CHLA’s executive director, said in a statement.

But the National Association of Federally-Insured Credit Unions asserted that the rulemaking needs to be taken a step further.

While the agreement ends the net worth sweep, Treasury’s liquidation preference for Fannie Mae and Freddie Mac’ senior preferred shares will increase.
Bloomberg News

“We encourage the FHFA to work with Congress to codify certain protections — including those to ensure credit unions have guaranteed and equal access to the secondary market and receive fair pricing based upon loan quality, not volume — before the GSEs are officially released from conservatorship,” NAFCU President and CEO Dan Berger said in a statement.
The Mortgage Bankers Association, while happy the agreement “preserves and extends” price parity, was concerned about parts that limit Fannie Mae and Freddie Mac’s capacity to purchase certain types of loans.
The agreement keeps so-called higher-risk single-family loan purchases at their current levels and it memorializes the multifamily lending caps. Both are potential problems, MBA President and CEO Bob Broeksmit said.
“It is critically important that measures to guide the GSEs’ market footprint carefully balance the need for them to meet their affordable housing mission for both single-family and multifamily homes,” said Broeksmit in a statement. “Some of the provisions may prove inflexible during market stress, and it will be vital for FHFA and the Treasury Department to monitor those impacts and remain open to changes as necessary, especially for untested standards.”
On the other hand, Eric Hagen, an analyst for BTIG, sees keeping those caps at the current limits as an opportunity for the private-label mortgage market.
“We see those cohorts being attractive potential sources of longer-term growth for lenders such as mortgage REITs,” Hagen said in a report, noting that investment firms such as Annaly and Chimera have been aggregating and financing agency-eligible investor loans through securitization in recent years.
“Treasury’s agreements don’t necessarily expand the market share available for REITs, although at the same time, it likely helps stymie any additional GSE support those loans could have received under the incoming administration,” he added.
The deal still leaves a lot of open questions, especially about the PSPAs, said Bose George, an analyst with Keefe, Bruyette & Woods. Permitting Fannie Mae and Freddie Mac to retain capital increases the liquidation preference of those preferred shares held by Treasury. The new agreement does not specify how the PSPA will be resolved, George noted.
“Nevertheless, the buildup of capital is positive and does make it easier for the companies to be privatized later by either forgiving the senior preferred debt or converting it to common shares,” he said.
“However, to the extent the new administration continues along the privatization path, the most likely scenario would be a conversion to common of the senior preferred shares as opposed to forgiving that debt,” George said in a press release. “This would meaningfully dilute the common shares.”
Furthermore, GSE privatization is not expected to be a priority for the incoming Biden administration.
For investors, the next milestone is a decision from the Supreme Court in a case heard in early December, which challenged the legitimacy of the FHFA’s leadership structure, Randy Binner, an analyst with B. Riley Securities, pointed out.
If the court rules that a president’s inability to remove the FHFA director is unconstitutional, some hope it will go to the next step and declare the net worth sweep to be invalid.
“Government actions around the GSEs have always been questionable in our view, but the court historically shows deference to past regulatory actions,” Binner said. “If anything, that deference seemed somewhat less clear, and discussions around FHFA structure and the nature of the conservatorship seemed to marginally favor investor claims, in our opinion.”
In the end, however, it will all fall back to the federal legislative branch to ensure the outcome the mortgage industry desires.
“[The] announcement reminds us that Congress and the administration have unfinished business in housing finance,” Ed DeMarco, the president of the Housing Policy Council and former acting director of the FHFA, said in a statement. “It will now be up to the Biden administration to work with Congress to end the conservatorships and bring certainty to the market regarding the GSEs and the government’s backstop.” […]

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INSURANCE & MORTGAGE

Today’s Mortgage Rates in Connecticut | Mortgage Rates, Mortgage News and Strategy : The Mortgage Reports

About these rates: the lenders whose rates appear in this table are The Mortgage Reports advertising partners. This information may be different from what you see when you visit a lender’s site. The terms advertised here are not offers and do not bind any lender. The rates shown here are retrieved via the Mortech rate engine and are subject to change. These rates do not include taxes, fees, and insurance. Your actual rate and loan terms will be determined by the partner’s assessment of your creditworthiness and other factors. Any potential savings figures are estimates based on the information provided by you and our advertising partners.

1. Assumes today’s average rate, 15 year fixed, 720 credit score, 3.5% down or home equity, and other common loan terms as seen here.
2. Assumes today’s average rate, 30 year fixed, 720 credit score, 20% down or home equity, and other common loan terms as seen here.
City
Average Home Price
FHA Monthly Payment1
Conv. Monthly Payment2
Bridgeport-Stamford-Norwalk
470100


Hartford
244500


New Haven
248000

Buying a Home in Connecticut
In Connecticut, a real estate attorney is legally required to confirm that the title to a property is bona fide, and that the home has no outstanding liens before the transaction can proceed.
The main role of the attorney is to safeguard the buyer and ensure he or she gets what they are signing for. Real estate attorneys are also known as buyer’s attorneys, and they perform many functions for buyers.
In addition to having an attorney committed to your interests, the Connecticut state department of consumer protection appears enthusiastic about your appointing a buyer’s real estate agent. That person, too, has a duty to be 100% on your side.
During the initial search process, the buyer’s agent:
Arranges property showings to meet with the buyer’s needs
Provides any information that the buyer might request about the property, utilities and zoning, taxes and the local community
During the offering process, the buyer’s agent may:
Counsel the buyer on what an appropriate offer might be
Write an offer (always with the buyer’s interest in mind)
Negotiate the best terms and price
During the closing process, the buyer’s agent should:
Help with the mortgage application
Record all dates, costs, and requirements for the buyer
Attend the closing with the buyer
Refinancing in Connecticut
There don’t seem to be any state-specific regulations when you refinance your mortgage in Connecticut. The process is as easy as in most other places.
Connecticut allows attorneys to be a part of the refinance process. And that may be a good idea:
You’re likely to pay fees anyway, to a closing or escrow company appointed by your lender
You’re legally entitled to appoint your own attorney to do the work instead
An attorney has a duty to be on your side. Closing or escrow companies don’t
Closing or escrow companies aren’t obliged to deal with you if something goes wrong down the line
Those companies don’t have to use qualified, licensed attorneys
The attorney fee may be only slightly higher than the escrow fee would have been
This is really a question of peace of mind. If you’re tempted to go down the attorney route, shop around for some quotes. And then weigh up whether any extra cost is worth it to you.
Buying a home doesn’t need to be stressful—or expensive.
Let us make your dream home a reality!

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INSURANCE & MORTGAGE

Five DIY Cozy Pet Nooks to Consider for your Best Friend

You want your furry friends to be comfortable in their own space. While you may be spending more time at home, it may be the perfect time to decorate with pet-friendly items for your puppy or kitten. Naturally, your pets deserve a cozy pet nook to curl up into at the end of the day. In this installment of our DIY pet series, learn more about these DIY cozy pet nook with your best friend in mind.
DIY cozy pet nooks for your new puppy or kitten
Pets love to take naps and if you have a puppy or kitten they may like to curl up on anything they can. Here are some fun DIY projects to consider when crafting your next cozy spot for your pet.
1.Dresser for your pet
Do you have a drawer that’s not currently being occupied? Consider creating a secret getaway in your dresser for your kitten. Try adding blankets, a felt mouse, and a small scratching post to add different types of enrichment for your cat. That way your pet has a cozy pet nook to rest and play in all day long. Always be mindful to let all family members know of the drawer to help avoid any injuries or accidents with your pet.
2.Secret spot for your puppy
Imagine a space where your dog or puppy can call their own. If you’re up for a more permanent DIY project, consider a cut-out under your stairs for the ultimate dog house. Complete with a dog bed, bowl, and pet gate, and your puppy may be ready for naptime. For an additional resource on how to create this pup-proof space, read here.
3.Nightstand bed for your dog
Chances are you may have a nightstand or end table somewhere in your home. What’s great about this type of furniture is it can be used for multiple purposes. For example, it can be used for storage, holding some of your favorite books, or a comfy spot for your pet to curl up and take a nap. Consider adding a pet bed and interactive puzzle feeder for the perfect place to get away, rest, and play.
4.Portable crate for your puppy or kitten
If you have a flair for vintage décor, consider updating a vintage wood milk crate for your furry friend. A simple project could result in a cozy pet nook for your furry friend. Cut insert into the wood at the front of the crate, sand down, and insert dog bed inside the crate. Also, you could add other details like legs, wheels, or a platform for easy accessibility. Further, this crate can easily be moved around your home including storing under your remote work desk.
5.Window perch for your cat
Cats and kittens love to climb and explore in their home. So they may enjoy the chance to rest and relax once they’ve roamed through their space. For example, an extension on your window may give your cat a chance to lounge while they enjoy the view. Also, this can be a great addition to a catio or any pet-friendly room with a window. Check out this guide on how to build a catio for the ultimate cat space.
A pet-friendly home should give your pet the chance to explore, play, and rest in a safe environment. Consider how you can add pet-friendly items and create a space that is functional for the entire family. For more on how to puppy-proof your home, read here.
DIY cozy pet nooks can give your pet the chance to relax when they’re at home
No matter how big your space is, there’s always the chance to add a touch of fun to your pet’s furniture, toys, or pet care items. Also, it may give the opportunity for the entire family a chance to help make something new for your furry family member. However, your pet’s favorite spot at the end of the day may be curled up right next to you!
What are your favorite DIY cozy pet nooks to craft for your best friend? Tell us in the comments below.
For more on DIY pets at home, read How to Build a Dog House for Your Pet Space

About The Author
Kelli.Rascoe
is a digital content writer and editor for Trupanion. She spends her workday writing for the Trupanion blog. She loves writing about pets, being inspired by pets, and luckily gets to hang out with her rescue dogs all day long. In her free time, she enjoys exploring and traveling with her family. Her work has been featured on the DOGTV blog, KitNipBox blog, Get Your Pet blog, Fansided, among many others. […]

INSURANCE & MORTGAGE

Stab-Lok circuit breaker panels: What’s the deal? – The Cincinnati Insurance Companies blog

You can identify the equipment by the name and red breaker handles.

Why has almost every insurance company taken a stance against Federal Pacific Stab-Lok circuit breakers? Short answer: They are known for starting fires. But you can protect your property from a potential loss by identifying whether your facility has Stab-Lok panels and replacing them with safer equipment.
THE BACKSTORY
Federal Pacific Electric Co. manufactured many types of electrical systems over the years, and not all FPE equipment had problems. However, the circuit breaker panels marketed as Stab-Lok did have problems. Popular from the 1950s to the 1980s, they were installed in many commercial and residential buildings, and many can still be found today.
The outside of the breaker box generally has a label.

The primary issue was the inability of the breakers to trip in an overload or short circuit condition. This failure would allow the excess current to heat up and start fires within the circuit, resulting in loss of property or loss of life. In a 1982 Securities and Exchange Commission Filing, Reliance Electric Co. (the parent company to FPE), documented “a possible defect” in their Stab-Lok breakers and acknowledged that Underwriters Laboratories approval had been obtained “through the use of deceptive and improper practices.” In fact, Underwriters Laboratories ended up revoking their UL Listing for those products manufactured by FPE.
The method used to attach the breaker to the back of the panel was another known design problem. The connection points are known to become poor. This breakdown increases resistance to the flow of current, which generates heat, a leading cause of electrical fires.
When the problems with Stab-Lok panels began to surface in the 1980s, an independent firm hired to investigate the breakers published a peer-reviewed paper showing that 28% of the breakers tested failed to trip. Experts also estimated that FPE Stab-Lok breakers may be responsible for as many as 2,800 fires, 13 deaths and $40 million in property damage every year. The actual numbers are impossible to know. These figures focus only on residential fires, not commercial fires.
Because of numbers like this and the known hazards associated with these panels, Cincinnati Insurance loss control specialists recommend that the entire panel be replaced with a modern panel by a licensed electrician.
HOW TO ENSURE YOUR FACILITY IS SAFE
The paint scheme used to label the breakers is unique.

Although it has been more than 30 years since FPE quit manufacturing Stab-Lok panels, an estimated 270 million units are in use today. Fortunately, identifying whether you have these panels is fairly straightforward. The first indication that you may have Stab-Lok panels is a “Federal Pacific” or “FPE” label on the front of the panel.
Next, examine the breaker handles themselves. Stab-Lok breakers are painted red. Look for the word “Stab-Lok” written on the panel face or on the label inside the cover door. It is most commonly found near the top of the panel between the two rows of breakers.
Another visual clue is the white paint scheme used between the two breaker rows that annotates the breaker numbers. The corners are rounded, and there are tick marks separating the breaker numbers.
WE’RE HERE TO HELP
Maintaining a facility can be a full-time job, and it can be difficult to recognize all the potential risks. Cincinnati Insurance Loss Control representatives are available to assist in identifying and mitigating the premier risks. Policyholders may contact your agent to be put directly in contact with a local Loss Control representative.

This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article.

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INSURANCE & MORTGAGE

Consider safety before taking your restaurant outdoors – The Cincinnati Insurance Companies blog

Consider patron and employee safety when using temporary structures outdoors.

Restaurants seeking new ways to stay operational during the pandemic are constructing temporary structures to extend the outdoor dining season. Yurts, plastic pods, greenhouses, shanties and tents are popping up as restaurants work to serve customers while limiting exposure to COVID-19.
Use of these structures without proper safety precautions and adequate protections for customers and employees could lead to unforeseen legal and safety consequences.
Before setting up temporary accommodations at your establishment, consult with local authorities, your attorney and your insurance agent. Here are some common considerations:
General Liability
Ensure the structure complies with all local building codes and zoning ordinances.
If hiring a contractor to build the structure, treat it as if building a brick-and-mortar addition to the property.
Insist on a contract that calls for the contractor to have insurance and language requiring the contractor to defend, indemnify and hold the business harmless should anything go wrong during the construction and erection of the structure.
Obtain proof of professional errors and omissions liability insurance from any firm involved in the design of the structure.
Ensure that the contractor who builds the structure can provide proof of completed operations insurance coverage to protect your business should the structure fail sometime after it is completed. Push for this completed ops coverage to last at least two years.
Pay attention to the walking surface near structures placed in parking lots, on sidewalks or even in streets (with approval of local authorities.) Are there potholes, cracks or areas of heaved pavement that could cause employees and customers to trip?
Notice the proximity of these outdoor structures to active traffic. What is the speed limit on the adjacent roadway? Is there adequate separation between traffic and the temporary structure to keep everyone in them safe? Will local authorities reduce the speed temporarily? Can the street be closed, or can you at least place cones or other warning devices to alert drivers to the presence of people so close to the street?
Securely tape any electrical cords running through the structures or cover them with heavy-weight floor mats to prevent anyone from tripping and potentially tipping over heaters or light poles.
Property
One of the greatest property related concerns with temporary structures is the flammability of the tent fabric. Temporary structures should be constructed using only approved fabrics that comply with National Fire Protection Association standards. This will ensure proper flame resistance ratings. Local authorities likely will require a certificate showing that the tent materials meet NFPA-701 code.
Prior to setting up the temporary structure, consult local authorities for specific guidance on proper setup and placement of the structure. Items to consider:
Whether buying and erecting a prefabricated structure or having the structure built to design specifications, ensure the structure is designed to withstand anticipated weather conditions. Know the maximum wind speed and snow load the structure can withstand.
Placement of the structure should not obstruct egress from any buildings, fire department vehicle access or access to firefighting equipment such as hydrants, fire department connections and building sprinkler valves.
Tent structures should allow at least 10 feet between stake lines for emergency egress.
The immediate 10 feet around the structure perimeter should be free of combustibles and combustible storage.
Limit fire hazards such as combustible storage or debris, smoking and heating equipment. Post NO SMOKING signs. Portable fire extinguishers required in the tent structure should be clear and accessible.
Use only listed appliances, such as cooking and heating equipment.
Locate containers for LP gas heaters at least 60 inches from the tent structure and comply with NFPA-58 Liquified Petroleum Gas Code.
Connect electrical heaters to an electrical source suitable for outdoor use and adequately sized to handle the electrical load.

Workers’ Compensation
One of the greatest workers’ compensation risks is the safe transportation of food to the outside eating area. When possible, consider the following guidelines for employee safety:
Use carts to transfer items from restaurant to the outside area.
Limit the need for employees to cross vehicular traffic patterns.
Position the exterior eating area adjacent to the restaurant.
Ensure employees receive rest when needed and understand to drink water on a regular basis.
Provide some services in the tent such as warmers to store food items and drink preparation stations. If warmers or temporary food stations are used, are items filled in the kitchen and transferred in the warming unit? If so, is the path for travel of service equipment in good condition?
Adjust to bad weather conditions. If possible, create shelter for servers leaving the restaurant and delivering food to the outside eating area.
If heat inside the structure is being used, ensure proper ventilation for products of combustion.
If the structure is covered, be sure openings are clear of debris and large enough for servers to enter easily. Additionally, ensure there are open traffic patterns between individual tent systems.
More Information
Centers for Disease Control and Prevention’s Considerations for Restaurant and Bar Operators
California Department of Public Health’s COVID-19 Industry Guidance for Restaurants
Occupational Safety and Health Administration Alert for Restaurants
National Fire Protection Association Building and Life Safety Issues for Tents
This loss control information is advisory only. The authors assume no responsibility for management or control of loss control activities. Not all exposures are identified in this article. Contact your local, independent insurance agent for coverage advice and policy service. Neither The Cincinnati Insurance Company nor its affiliates or representatives offer legal advice. Consult with your attorney about your specific situation.

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