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Construction Bonds 101

Krissy Campbell

By Kristina Campbell

A construction bond, also known as a surety bond, protects a project owner if a contractor fails to complete a job, doesn’t pay for permits or fails to meet other financial obligations such as paying for supplies or subcontractors.

Surety bonds are important, and quite common, in the construction industry. They typically come in three types:

  • A Bid Bond is issued to the project owner to provide a guarantee that the winning bidder will honor the contract under the terms at which they bid.
  • A Performance Bond guarantees that the contractor will perform the services as described in the contract. A bid bond is replaced by a performance bond when a bid is accepted and the contractor proceeds to work on the project.
  • A Payment Bond guarantees that a construction company will pay its laborers (employees and subcontractors) and suppliers throughout the construction project.

A surety bond is a contract between three parties:

  1. The Principal is the party purchasing the bond and undertaking an obligation to perform the job as promised.
  2. The Obligee is the party requiring and receiving the protection of the bond.
  3. The Surety is the insurance company or surety company that guarantees the obligation will be performed.

How do you know if you need a construction bond? The project owner will decide.

Kristina Campbell has been working with contractors across Maine for their insurance and bonding needs for more than 15 years.

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Allen Insurance and Financial Earns Diamond Achiever Award in Maine

Allen Insurance and Financial has been named Maine’s 2020 Diamond Achiever by Patriot Insurance Company. The annual award is presented to the highest performing agency based on set criteria including length of appointment, profitability, growth, and policy retention. Each year, the top Patriot Insurance Company agencies receive the “Diamond Achiever” award in recognition of their outstanding accomplishment.

Patriot Insurance Company President and CEO, Lincoln Merrill Jr. explains, “We are proud to present Allen Insurance and Financial with our Diamond Achiever award. Through their hard work and commitment to providing superior services, support and products, it is well deserved.”

This recognition exemplifies their commitment to providing quality, professional insurance products and services to our mutual clients.

The results achieved by the team at Allen Insurance and Financial helped the agency become one of the most successful among Patriot Insurance Company’s more than 115 independent agencies.

“The team at Allen Insurance and Financial is dedicated to providing the protection our clients need accompanied by the highest level of service. We are all very proud to be recognized by our colleagues at Patriot Insurance. Strong partnerships like ours benefit everyone in the industry − carriers, agents and clients, ” said Michael Dufour, executive vice president of Allen Insurance and Financial.

Allen Insurance and Financial has been licensed with Patriot Insurance Company since 1993 is recognized as one of the carrier’s Preferred independent insurance agency partners.

About Patriot Insurance

Patriot Insurance has been providing peace of mind for families and businesses in New England for over 50 years. Headquartered in Yarmouth, Maine, we are a regional carrier offering business, home, auto, life, and surety products backed by local, autonomous claims, loss control, and underwriting teams.

We work exclusively with independent agents who can give our customers the personal guidance and service they deserve. Since 2007, we have partnered with Frankenmuth Insurance, a longstanding company founded in Michigan in 1868. Patriot Insurance is financially sound, with an A.M. Best rating of “A” (Excellent).

Patriot Diamond Achiever Award
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How to Handle a Surprise Medical Bill

If you’ve ever received a surprise medical bill, you’re not alone. According to a survey conducted by NORC at the University of Chicago, over half of American adults have been surprised by a bill that they had assumed would be covered by their medical insurance. Moreover, only 1 in 5 of these surprise bills were the result of a patient actively seeking out-of-network care.  This handout  will explain balance billing, how to handle a surprise medical bull and offer tips on ow to avoid receiving one in the future.

How to Handle a Surprise Medical Bill PDF cover image
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Meesha Luce Earns CPIA Designation

Meesha Luce, ACSR

Meesha Luce, ACSR, a member of the personal insurance team at Allen Insurance and Financial, has earned the Certified Professional Insurance agent designation from the American Insurance Marketing and Sales Society.

The CPIA designation emphasizes critical skills in insurance underwriting, coverages marketing and client services.

Meesha is a member of the MIAA Young Agent Committee, and was named Maine’s Young Agent of the Year in 2017. She joined Allen Insurance and Financial in 2006.

She also holds an Accredited Customer Service representative (ACSR) designation. A graduate of Medomak Valley High School, Luce lives in Hope.

“All of us here at Allen are incredibly proud of Meesha’s professionalism and commitment to both customers and community,” said Scott Carlson, personal insurance division manager at Allen Insurance and Financial. “Meesha is a real embodiment of our company’s values.”

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Individual Health Insurance ENewsletter – April 2021

Special Enrollment Period Update

The 2021 special enrollment period for individual health insurance has been extended to Aug. 15, 2021.

This means anyone − Americans without health insurance as well as those who have already enrolled in a HealthCare.gov plan for 2021 − have a chance to check out their health insurance marketplace options offered through the Affordable Care Act, also known as Obamacare, outside the regular Nov. 1 through Dec. 15 period.

If you have questions about if this would apply to you, please feel free to reach out to us.

Extra Tax Credits

The American Rescue Plan (ARP) – the recently passed federal stimulus legislation – may help you save additional money if you’re already receiving federal aid for your individual health insurance. Here are some things you should know:

▪ The new law will lower premiums for most people who currently have a Marketplace health plan and expand access to financial assistance for more consumers.

▪ An enhanced tax credit is available beginning on April 1. Financial assistance is retroactive to Jan. 1, 2021 via 2021 tax filing reconciliation for individuals and families that received their health insurance through the Marketplace.

▪ Premiums after these new savings will decrease on average by $50 per person per month, or by $85 per policy per month.

To take advantage of the increased tax credits, we encourage you to call the Health Insurance Marketplace at (800) 318-2596 or visit healthcare.gov. The Marketplace call center is open 24/7 and can be accessed round the clock. If you don’t take action to update your Marketplace application, you will receive the additional tax credits when you file your 2021 tax return.

Moving to a Marketplace Plan

If you are currently enrolled in a health plan outside of HealthCare.gov (directly enrolled with the insurer) and paying full price for your policy, you may now qualify for federal aid to help pay your premiums because of changes implemented under the American Rescue Plan (stimulus bill).

If your health insurance premiums are more than 8.5% of your household income, federal aid may be available to lower your insurance costs. To see if your estimated 2021 income is in the range to qualify for a premium tax credit, please visit https://www.healthcare.gov/see-plans.

If you do think you’ll be eligible for federal aid, please contact us so we can discuss next steps with moving your health insurance from a direct enrollment without federal aid to a Marketplace plan with federal aid. We have until Aug. 15, 2021 under the Special Enrollment Period to make a plan change.

Midcoast Senior Expo

We’re excited to announce that we will have a table at the Midcoast Successful Aging Expo, scheduled for June 15 from 9 a.m. to 2 p.m. at the Rockland Elk’s Club. This is our first in person event in more than a year and we’re looking forward to connecting with our clients and community. This event is free and open to the public.

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Medicare Enewsletter – April 2021

Traveling? Please Check Your Coverage First

For those of you itching to travel, if you are leaving Maine for any length of time it is important to understand how your benefits travel with you both within the U.S. and outside of the country. For example:

▪ Coverage during domestic travel may depend on whether you have an Advantage plan or basic Medicare, and whether you are seeking emergency or routine care.
▪ Medicare generally does not cover any medical costs outside of the U.S. and its territories.
▪ Some Medigap plans − which can only be paired with basic Medicare − offer limited coverage for travel beyond U.S. borders.

Many Advantage plans are required to cover your emergency care anywhere in the U.S. and in an emergency many will go above and beyond what Medicare covers to provide coverage outside the U.S.

If you plan to travel outside the U.S., it’s wise to consider a stand-alone travel medical plan which can cover illnesses, emergencies and medical evacuation. We offer this coverage year-round. We are happy to discuss your options with you.

Dental Coverage Available Year-Round

Oral health directly affects overall health and quality of life. Unfortunately, this is often a gap in coverage, especially when it comes to original Medicare. The good news is you can purchase a stand-alone dental plan any time of year.

We have 5+ plans from Delta Dental, ranging in price from $30 to $90 per month. Some of the plan highlights include:

• Competitively priced plans with a variety of coverage options
• One-time (lifetime) deductible
• High annual maximums up to $2,000 per person
• Access to the nation’s largest dental PPO Network
• A vision discount program is included (Sears Optical, Lens Crafters, Pearle Vision, Target Optical, etc.)

If you’d like to explore your options, please reach out to us. We’d be happy to explain the coverage options available and help determine which plan best aligns with your needs.

Midcoast Senior Expo

We’re excited to announce that we will have a table at the Midcoast Successful Aging Expo, scheduled for June 15 from 9 a.m. to 2 p.m. at the Rockland Elk’s Club. This is our first in-person event in more than a year and we’re looking forward to connecting with our clients and community. This event is free and open to the public.

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Welcoming Sheila Lowe to our Benefits Division

Sheila M. Lowe

Sheila M. Lowe

We are to pleased announce that Sheila M. Lowe has joined Allen Insurance and Financial as an account executive in the company’s benefits division.

For the past five years, Sheila has represented AFLAC in the Midcoast, earning numerous sales awards and serving as the company’s district coordinator beginning in 2020. She is certified to work with client s on individual health insurance on the federal marketplace.

Outside of work, Sheila enjoys a variety of hobbies, especially if they take her to the Maine outdoors, as well as spending time with family and friends and volunteering in the community.

Sheila is vice chairman of the board of directors at the Penobscot Bay regional Chamber of Commerce, a member of the Midcoast Chapter of the Maine Women’s Network and a volunteer for One Community, Many Voices.

She is a graduate of Rockland District High School and the University of Maine in Augusta. She and her family live in Union.

Sheila will be based at our office at 31 Chestnut Street in Camden.


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Retirement Planning for Women: Understanding the ‘Bag Lady’ Syndrome

Sarah Ruef-Lindquist

Sarah Ruef-Lindquist, JD, CTFA

By Sarah Ruef-Lindquist, JD, CTFA

Challenges can be different for women planning for retirement than those facing male counterparts. The phenomenon of women envisioning themselves as elderly “bag ladies” is based in very realistic concerns. But with proactive planning, beginning in early adulthood, women can take control and realistically envision economic security for their retirements.

A persistent wage gap in many fields has put women at a disadvantage in several ways: Because women earn less, women generally have less they can set aside for retirement after paying current living expenses during the accumulation years (when in the workforce). According to 2021 data on Payscale.com “The average amount of money earned by women throughout their career is $850,000 less than that of men.”

Compounding the disadvantage, women spend a greater amount of time out of the work force, typically related to child and other family care roles. On average, women spend 44% of their adult life out of the workforce compared to 28% for men. This can significantly add to women’s disadvantage at saving to prepare for retirement years, as well as exacerbating their diminished social security participation.

According to Brookings.edu (July 2020) How does gender equality affect women in retirement?
Caregiving provided during women’s 20s and 30s, when careers are formed and when age-earnings profiles are relatively steep, creates career-long earning losses. One study found that a woman with one child earns 28 percent less on average over her career than a woman without children, partially as a result of time out of the work force. (In sharp contrast, becoming a father typically does not reduce a man’s earnings.) Each additional child reduces average women’s earnings by another 3 percent. Women are also more likely than men to care for their aging parents—a responsibility that predominantly falls on women over the age of 50.

People who leave the labor force early to care for a parent or other elderly relative lose an average of $142,000 in wages.
The wage gap and time out of the work force also results in women generally earning a lower social security benefit than male counterparts. In 2019, the average annual Social Security income received by women 65 years and older was $13,505 compared to $17,374 for men.

Moreover, women tend to live longer than men and thus rely on their retirement wealth for a longer period of time. In 2020, average life expectancy at age 65 is 21.1 years for women and 18.6 years for men…As a result, for a given level of retirement wealth at age 65, women can afford to consume about 7 percent less per year than men to make those resources last as long as they do, according to the Brookings report.

Women fear outliving their spouses. Given greater longevity, that is not surprising They also fear outliving their financial resources.

What can women do to address these issues while a wage gap persists, time out of the workforce and relative longevity impair their ability to earn and build for as secure a retirement as men?

Women tend to put off building a relationship with a financial advisor or delegate that activity to a partner or spouse. Rather than wait until they are in their 40’s or 50’s, women should begin discussing their own retirement planning in their 30’s, to gain a realistic picture of what they can do to plan for retirement. The value of compounded earnings over time add value exponentially to saving early in one’s working years, and a financial advisor can help increase this understanding.

A financial advisor who understands these issues and who also can empathize with what it feels like to have these financial challenges can help to increase financial literacy to empower the kind of decision making that can support more secure retirements.

Working with an advisor to build a plan as early as possible, fine-tuning that plan as the years go by while intentionally saving for retirement can set women on a path to secure retirement, and eliminate the imagined “Bag Lady” for good.

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Learning About Special Terms and Conditions on a Marine Insurance Policy

Chris Richmond, Allen Insurance and Financial

Chris Richmond

By Chris Richmond
Originally Submitted to WorkBoat Magazine

Your commercial vessel’s insurance policy actually consists of two separate policies: Your hull policy and your protection and indemnity policy. While the actual hull and P&I policies typically consist of accepted insurance forms, insurance underwriters always add additional terms and conditions. These are worth noting because they can significantly affect your policy.

Look at the final pages of your policy to see these special terms and conditions. While these vary by insurance company, here are a few to keep an eye out for:

  • Commercial vessel use warranty: This stipulates that there is only coverage for what has been declared on the policy for the vessel’s commercial usage. If you are operating as a passenger vessel but decide to do some commercial fishing , be sure to notify your agent as your commercial use warranty needs to be amended.
  • Lay up warranty: If you do not operate your vessel year-round, you can get a break on the premium by adding a lay up warranty. But if you operate your vessel during this period no coverage will apply should you need it. Lay up warranty differs slightly from company to company but basically your boat needs to be in a state of decommission and not used for any purpose during the lay up period.
  • Diving warranty: Do your operations sometimes involve commercial diving? This is excluded from your policy. Typically all overboard activities are excluded but some can be bought back (such as swimming or snorkeling). Diving requires a special policy.
  • Gear and cargo exclusion: Some insurance companies will exclude fishing gear that is not permanently installed on your vessel (and your catch also will be excluded from coverage). Other cargo you are transporting may also not be covered. Cargo can often be added back on but if you are storing the cargo on shore before getting underway you will need additional coverage for that.
  • Crew warranty: If you have crew covered on your policy, there will be a number stating how many crew members the policy is providing coverage for. Should you have more crew on board and you have not reported the increase to your insurance company, then the policy may only respond proportionally to the number of crew your policy states by the number of crew you have on board at the time of the claim.

Just as commercial vessels vary, a commercial hull and P&I policy is not a one-size-fits-all. Have a conversation with your agent about your operations and vessel usage to ensure that your insurance will be there when you need it.

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2020: ESG Record Breaking Growth in the Midst of Covid-19 and Climate-Change Focus

Sarah Ruef-Lindquist

Sarah Ruef-Lindquist, JD, CTFA

BySarah Ruef-Lindquist, JD, CTFA
Originally submitted to Pen Bay Pilot

More people in the US are involved in the stock markets than ever before. If you have any retirement plan assets, like an IRA or a 401(k), chances are you have investments. For a growing number of investors, considering the impact of the companies in which they are investing is becoming a priority in selecting stock, mutual and exchange-traded funds to include in their portfolios and retirement accounts.

ESG investing involves a strategy that takes environmental, governance and social issues of companies and their impact into account. Sometimes also referred to as “SRI” or Socially Responsible Investing, the use of this strategy has grown significantly over the last several decades to not just screen out “bad actors” like fossil fuels, gambling, defense industry and alcohol, but to include in mutual and exchange traded funds and investor portfolios companies creating more diverse boards and C-suite leadership, environmentally friendly policies, operations and progressive workplace conditions.

There is a growing list of mutual and exchange-traded funds with the ESG focus, a trend that has been developing for more than 30 years. But the past 4 years and most recently the pandemic has accelerated their growth exponentially. According to the Banking Exchange on February 2, 2021 Bank of America’s ESG Matters – Quant Edge recently reported that additional investments in sustainable investment strategies in 2020 reached $255 billion, a new record. The report went on to say that 1,866 ESG equity funds saw inflows in 2020 of $194 billion, compared to $186 in outflows from other global equity funds. In other words, the additional amounts invested in ESG funds exceeded the funds taken out of non-ESG funds.

The article reported 141 new ESG funds were launched in 2020, most of them in Europe. In the fixed-income space, there was also significant growth: ESG bonds issued in 2020 exceeded $500 billion for the first time.  Bank of America also reported that thus far 2021 is showing stronger inflow momentum for sustainable products, with global ESG funds experiencing $24 billion in inflows, one and a half times the pace of 2020.

Why all the increased investments in these types of offerings? One theory was cited as “…regulatory changes coming to the EU and a new presidential administration in the US” seeking to tackle climate change and address social change.

In a January 6, 2021 article on Livemint, the ESG inflows in 2020 were compared to inflows of $63.34 billion 2019 with “conscious investing” a key theme of 2021. They cited a BlackRock survey from December 2020 showing investors with $25 trillion in assets planning to double their ESG assets in the next five years. Climate-related risks were a top concern for 88% of those 425 investors responding from 27 countries.

A December 14, 2020 article in Forbes Why Socially Responsible Investing Is Likely to Gain Momentum Under Biden noted that sustainable investing has had more growth over the last four years than the previous 12, in part because US voters perceived the need to support endeavors that could positively address climate change and social issues if government was not so inclined. The article went on to say that the growth in sustainable investing now means that in one out of three investing dollars are being invested in this manner.

In addition to more investment activity increasing the amount of funds that have a socially-conscious approach, these investments outperformed their peers that do not have an SRI or ESG strategy. Bank of America’s analysis revealed that 65% of ESG indices outperformed equivalent traditional benchmarks in 2020. The outperformance of many tech stocks in 2020 as the pandemic drove innovation and demand while fossil fuel companies suffered from the continued growth of alternatives and reduced demand supported this relative outperformance, and could continue as a tailwind as the world emerges from the pandemic economy with a renewed emphasis on climate change awareness.

Ask your financial advisor about the options available for ESG investing that would suit your particular situation. You may find that the ESG strategy could support a plan of doing well, while doing good.