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    WaterColor Management has developed special coverage forms for businesses in the water treatment and handling business. The scope of the coverage is unmatched in the insurance industry and serves a multitude of businesses that treat or handle water. WaterColor Management has formed an alliance with an A.M. Best “A++ XV” rated company to provide the critical liability insurance needed by the industry.

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    Fraud alert – “Fake President“

      Dear Ladies and Gentlemen, With WaterColor Mnagement as your Crime Insurance insurer, you have a strong partner to stand by you when you need protection from fidelity risks. But we do not only want to be there for you when a loss has already taken place. It is our aim to protect you and your company from the dangers which may threaten it. For this reason, we would like to warn you about specific fraud scenarios which have been responsible for causing a large number of losses in recent years, some of them quite high.   Scenario 1 – Fraud through criminals assuming a false identity – “Fake President Fraud”   In this type of scam, the perpetrators masquerade as being from inside your firm – usually as the owner or from top management and send an email or fax to an employee who is responsible in the company for carrying out bank transactions, asking them to execute an urgent money transfer. They try to make the employee believe that this is a highly confidential matter which must be kept secret at all costs, and which is vital for the owner or the company. The victims, who on the one hand feel flattered by the special trust shown in them by their superior and on the other are under great pressure due to the alleged importance of the transaction, in most cases execute such transfers without delay. The money is nearly always transferred to foreign bank accounts, often in Asia and Eastern Europe. If the fraud is exposed, the accounts there are almost always already empty or it is extremely difficult to recover the money due to the foreign legal system.     Scenario 2 Fraud through diverting payment flows – “Payment Diversion” The fraudsters masquerade as business partners or suppliers of the insured company, and manage by giving fake information, to get payments for services rendered or goods delivered. The fraudsters accomplish this by diverting onto the invoice different bank account numbers from those previously listed. Sending a forged notice to the insured company where bank details have been changed and stating that future payments should be made to the new account number, is how this form of fraud functions.   Scenario 3 – Fraud through identity theft – “Fake Identity Fraud”   In this fraud scenario too, the perpetrators masquerade as an existing customer or a new customer of the insured company and send a written order for goods. Plausible reasons are then given for switching the delivery to a divergent delivery address. Since the identity of an already existing firm is used, the fraud victims do not at first smell a rat. The fraud often only comes out when payment does not arrive on time and a reminder is sent to the real customer. When the delivery address is then checked by the police, the premises are found to be deserted - and the goods have of course long since been moved somewhere else.     What can you do? Clearly demarcated processes and responsibilities in your company. If it is at all possible, the “four eyes principle” should be introduced for all relevant financial transactions. Set up clear rules to be followed in cases which are out of the ordinary, for instance when unusually high or urgent payments need to be made. Verify the payment information or the email order. If possible, a call should be made to employees you already know at the customer or to the head office of the alleged customer. For this, do not use the telephone number given in the email, but, for instance, the one in your own internal records or on the customer’s website. The details given of changes to the bank account data or divergent addresses for the recipients of a payment should similarly be verified by a safe method such as sending a letter or confirmation of the account with calling back to authenticate it. Encourage your employees to get back to the alleged sender or at least to inform their direct superior if they receive a communication purporting to be from the company’s board which appears unusual in its style or contents or the expressions used, or perhaps even contains spelling or grammar mistakes. Involving the police – in the event of an attack, you should file charges. Inform your employees about this type of fraud scenario, make them aware of the danger and put these safeguards in place to deal with it.   This information sheet is intended for your general information only and can under no circumstances be construed as providing coverage. The scope of your coverage can be seen from the Schedule to your Policy.   Do you have any questions? Please do not hesitate to get in touch with us. Give us a call at 256-260-0412.   With best regards John Walsh   WaterColor Management P.O. Box 1132 Decatur, AL 35602 Phone 256-260-0412 Fax 888-512-1613          
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    WATER SOFTENING AND CONDITIONING CONTRACTS – WHAT YOU NEED TO KNOW   WaterColor Management·Thursday, April 25, 2019   Don Cleveland, President WaterColor Insurance Management We always urge our insureds and others in the water conditioning and water filtration business to do business through a written agreement. We have been asked repeatedly to provide some model language for use in such agreements. Model language for an agreement is part of this risk management article. It is not for everyone, because multiple exposures are included in water conditioning and filtration businesses. Over the years, we have identified several areas of liability exposure for these businesses.   These areas are as follows: 1. There is an attempt to hold water conditioning and filtration businesses responsible for leaks after installation that come from latent defects in plumbing that were in the system prior to the water treater undertaking new installation or service. 2. Customers fail to undertake proper maintenance of systems once installed and blame the installer or service company for a bad result or failure of the system. 3. Customers sometimes blame the water conditioning or filtration company for failure of the system after changing usage or source of the water supply without conferring with the installer or servicing company. 4. Customers or legal advisors try to shift the blame for failures after the initial installer or service company has lost the account for reasons other than performance (mainly due to price). Failures or issues can result. Putting blame on the previous water conditioning or servicer for failure is an easy out. 5. Leaks can be a big problem. Many times leaks happen as a result of post installation work done by another contractor, but because it’s water, the conditioner or the servicer gets blamed. 6. Water conditioning and filtration servicers at times rely on outside labs to water analysis for their customers’ water. The labs might (rarely) provide inaccurate results or conclusions causing the water treater conditioning or servicing company to make adjustments that lead to failures in treatment or system installation. The customer and the lab will blame the conditioning or servicing company for any problem, because it’s an easy way out. Now, with increasing discovery of major water problems in U.S. water systems, conditioning and filtration companies need to be more on guard and review their promises about how effectively their processes alter or control point of use water. What chemicals and bacteria are removed from the water can be a broad promise, that leads to high demand negligence allegations. While the fundamentals of water conditioning and filtration may remain the same, the tendency for finger-pointing and attempts to pass on liabilities will continue to accelerate. The Model Service Agreement that accompanies this article is directed at the water conditioner or servicer/customer relationship, but it is important to remember that the water conditioner or servicer may have other important relationships on which the conditioner or servicer relies (e.g. contracts with big box operations, drop ship contracts for salt and charcoal, and even supply chain and warranty issues if they manufacture some of their own products). So, it’s crucial for the conditioning and service companies to have written agreements with those firms as well assuming the defense and liabilities that arise from inaccurate information, poor quality and performance of materials, and supplier product failures. Also, make sure you provide these suppliers with the proper information about the systems for which you are asking them to provide products or services. Withholding information or providing false information can be detrimental to both of you.   Some other items of guidance: • Take pictures of the job site(s) before and after. • Make sure you conduct an inspection of the plumbing and structures that you will use to support your installation or system and write up any observations of problem areas and inform the customer. • Keep all your records for at least 10 years, or until the statute of limitations has tolled; especially service reports and special analysis reports. This is important in the event of any claim. • Make sure in your service reports you define everything that you observed, even if it is outside the direct area of your conditioning or filtration service. The following Draft Model Agreement is only a starting point and is a simple sample contract; it may well be the subject of negotiation between you and your customer. It is ultimately up to you and your legal advisors to determine the contractual relationship with your customers and what works best for you. Remember, however, that a written service agreement defining what you are providing, and the responsibilities of the client is always the best way to protect you from liability. Your conditioning or service contract should always be the first thing you offer when you are ready to take the first payment. Mr. Cleveland can be contacted at don@watercolormanagement.com or 256-260-0412     “Simple” DRAFT MODEL Water Conditioning or Service Agreement   THIS WATER TREATMENT PROGRAM AGREEMENT, hereinafter referred to as the “Agreement,” is made and entered into as of the xx day of xxxxx, between (Your Company Name and address), from now on referred to as the “Servicer” and (Customer’s Name and address), from now on referred to as the “Customer.” THE PURPOSE of this Agreement is to state the terms and conditions under which the Servicer will provide and Customer will receive Goods and Services related to water treatment programs for the Customer’s equipment located at (Address where equipment to be serviced is at), which shall be described specifically in relevant purchase orders and proposals made pursuant hereto.   Goods and Services Provided by Servicer Servicer agrees to provide the following goods and services to the Customer:   List the specific Goods and Services you are going to provide. If there are limits, specify that as well. The supplies and services listed above will be accomplished by the Servicer through: 1. (daily) (weekly) (monthly) sampling and testing of the water in the systems where required subject to this service agreement; 2. Informing the Customer of the test results on a timely basis; 3. Providing a water conditioning program which reduces the hardness of the water and extends the life of the customer’s water pipes and fixtures. 4. Providing a filtration and treatment program designed to remove or control any harmful bacteria or adverse chemical in the water. Any instruction or operation manuals delivered with supplies or equipment to the Customer are hereby incorporated into this agreement. 5. Delivering the quantities of salt, charcoal, filters and other chemicals and supplies described below to the Customer’s premises in order to adequately administer the water conditioning or filtration program.   Again, this should be expanded based on the service you are providing. Be specific and all-inclusive. If there is something the client says he does not want you to do, such as Legionella analyses, state that too.   Customer’s Duties or Responsibilities 1. Allow the Servicer all reasonable access to the equipment to sample the water and to administer the water treatment program; 2. Report to the Servicer any change in the Customer’s water usage or water supply that could affect the quality or quantity of water used in the various pieces of equipment installed by the Servicer for the Customer’s use. 3. Comply with all instructions for operation and maintenance provided by the Servicer and Customer operation and maintenance manuals associated with equipment installed by the Servicer.     Again, if there are other things you want the customer to do or that he has promised to do, state them specifically (i.e., any manual blowdown of the boilers or addition of dry biocides to a bromine feeder). The Customer and Servicer agree that the ultimate success of any conditioning or filtration program provided by the Servicer to the Customer is dependent on diligent maintenance and operation of equipment installed by the Servicer. The Servicer shall not bear any liability or responsibility for any failure caused in whole or part by the Customer’s lack of diligence or failure to follow the Supplier’s recommendations or the Customer’s operation or maintenance manuals. Neither shall the Servicer be liable for any failure or delay in providing its program as a result of any act or circumstance beyond its control. The conditioning or filtration program recommended by the Supplier is based on the operating conditions at the time this agreement was entered into. The Customer acknowledges that (He, She, It, or They) is obligated to provide accurate information to the Servicer and to third parties used by the Servicer so a functional conditioning and/or filtration system can be installed and maintained.   Hold Harmless, latent defects and protection of the Customer’s Property, Leak Detection The Customer agrees not to hold the Servicer responsible for any hidden or latent or ongoing damage to plumbing, piping or structural systems which interface with or connect to the Servicer’s equipment or work. The Servicer agrees to protect the property of the Customer while performing the water treatment conditioning and/or filtration services described herein and agrees to maintain liability insurance coverage and any other typical and reasonable insurance coverage required by the Customer. The Customer hereby accepts the installation of a leak detection system which will (will not) automatically shut off water supplies. The detector will sound an alarm in the event of any leak where the detector is located and will shut off the water supply. The price of the detector system is built into the project cost. Should the Customer refuse the installation of the detector system, then the Customer waives any and all claims against the Servicer for any leak associated with the Servicer’s work. If there are other specifics for the agreement, list them in here. This could include disposal of containers or any other regulatory or compliance issues.   Force Majeure Neither party will be responsible to the other if uncontrollable events make it impracticable or commercially unreasonable for either party to perform under the terms of this agreement, provided that no force majeure shall apply to the Customer’s obligation to pay for Goods and Services rendered hereunder. No event of default shall be deemed to have occurred in the event that a force majeure prevented either party from fulfilling its obligations under this Agreement.   Confidentiality Both parties agree to keep confidential the other party’s proprietary non-public information, if any, which may be acquired in connection with this Agreement. The Customer additionally agrees to refrain from testing, analyzing, or otherwise attempting to reverse engineer any products delivered under this agreement without the prior written consent of the Supplier.   Intellectual Property The Servicer shall retain all intellectual property rights, including copyrights and patents, which it has in all drawings and data or other deliverables supplied or developed under this agreement, subject to the Customer’s right to use such drawings and data for its own use without additional cost. No materials, documents, plans, articles, information, data, compilations of data, prototypes, reports, speeches, slides, videotapes, pictures, audio, artistic works, computer programs, all works of authorship, or other items prepared by the Servicer on behalf of the Customer shall be considered “works made for hire” as defined by the Copyright Act of 1976 (17 U.S.C. 100 et seq.).   Reliance on Others During the course of performing its duties, the Servicer may rely on outside laboratories other than its own to test the Customer’s samples. The Servicer will recommend the laboratory for this testing and will provide the laboratory with all the pertinent information necessary for the laboratory to do its job properly. The Customer will be provided all the information that the Supplier provides to the laboratory, and the Customer will have the right of refusal to supply the laboratory with this information. However, be it known that the Servicer and the Customer have placed absolute reliance on the tests conducted by the outside laboratories for their accuracy. (Alternate Phrase #1) The Customer acknowledges this condition of reliance, (Alternate Phrase #2) and agrees to cooperate with the Supplier in bringing any claim that may arise from inaccurate test results from a laboratory, unless owned by the Supplier. (Alternate Phrase #3) and agrees to cooperate with the Supplier and not bring any claim for damages against the Supplier that arises from inaccurate test results. (Alternate Phrase #4) and agrees to binding arbitration as the sole form of redress for any claim for damages arising from inaccurate test results. • (Alternative Phrase #5) and agrees not to hold the Supplier responsible for inaccurate test results from a third party.   Term of Agreement This agreement shall have the term of (months) (year-s) after the acceptance date by both parties. The agreement may be extended by execution of an addendum to this agreement setting forth the length of the additional services to be provided.   Limitation of Liability and Indemnification The Servicer shall have no liability for incompatibility of Goods with the Customer’s actual space or design limitations, except where the details of such space or design limitations were expressly communicated to the Servicer with sufficient written advance notice to avoid any such incompatibility. The Servicer shall not be liable for damages or losses arising from any Services that are not required under this Agreement or any modification or amendment hereto, or for which the Servicer does not charge the Customer.   Jurisdiction Unless otherwise stated herein, this agreement is subject to the jurisdiction of the laws and the courts of the state of   Transfer This agreement shall not be transferable without the signed consent of both parties to the agreement Acceptance and Approval This agreement is accepted and approved by the following persons on behalf of their companies on this the                    day of                                ,20                        Signature                                                                          Title                                                                                   Attach any special clauses, schedules of equipment and supplies and/or the original quotation and pre-project and post project report with pictures.                   
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    Holy Grail of Legionella Bacteria Detection

    October 30, 2018 Holy Grail of Legionella Bacteria Detection By Donald Cleveland, President WaterColor Management I’ve always believed in looking for a better way. So, every year when I attend the AWT, WQA and IWC conferences as an exhibitor, I also set off on the trail to find the Holy Grail of Legionella bacteria detection. My dream has always been to have cooling tower Legionella monitors that provide instant readouts on computers or cell phones for building owners, building managers, and water treaters.   This year, I have come the closest to finding that Grail. As of the AWT conference in September 2018, there are three approaches that come close to finding my dream solution. One approach measures the level of biocide in the cooling tower. The other is a more rapid detection of bacteria in the cooling tower water and the third is an onsite 25 minute Legionella detection device. WaterColor Management does not endorse any of the specific products, but clearly applauds the advancements in technology that lead to healthier environments for everyone. Phigenics, www.phigenics.com originally from Naperville, IL with offices in Fayetteville, AR and across the U.S., has developed on online system of monitoring water quality. While the system does not detect Legionella bacteria, it will monitor levels of biocide in the water. Their program promises: To monitor water quality on the main line entering the facility To monitor water quality at strategic locations within potable water systems, such as recirculating hot water loops, cold water service lines and decorative fountains. To control the addition of supplemental disinfection where required. And provide instant online access to the monitoring information. Luminultra www.luminultra.com is headquartered in Fredericton, Canada and has an office in Baltimore, Md. They have developed a process identified as ATP monitoring. ATP stands for Adenosine Triphosphate. ATP is the primary energy carrier for all forms of life – bacteria, algae, vegetable, animal cells – all of them contain ATP. As such, the measurement of ATP concentration in a sample provides a direct measurement of biological concentration and health. For applications such as drinking water, cooling towers, or oil & gas applications, Cellular ATP is measured directly. Cellular (cATP) provides a direct indication of living biomass energy level, or in other words, total living biomass concentration. While this technology is not the newest, the company has developed a 2nd Generation ATP testing system which produces test results in under 10 minutes. This is a “while you wait” operation.   Hydrosense https://hydrosense-legionella.com is headquartered in Scotland, and it is the world’s only test that can detect Legionella pneumophila serogroup 1 on-site in 25 minutes (compared with 7-14 days for traditional methods) and yet can be performed by anyone with minimal training. The test can detect legionella at levels as low as a 100 CFU/L. However, other test kits, that offer lower detection rates such as 1000 CFU/L, 10.000 CFU/L, and 100.000 CFU/L, are also available to help customers in meeting different action levels depending on a country or industry. The convenience and incredible ease of use make Hydrosense tests the first choice for companies where reputation is crucial; where customer and employee safety are paramount; where clients are vulnerable and where facilities are in remote locations. Moreover, Hydrosense Test is supported by the Smartphone Reader App and an online portal, which make it easier to interpret test results and allow users to store data, manage results, print test certificates and send automatic notifications to responsible persons. Hydrosense Test: Provides an immediate picture of Legionella contamination risk, which allows you to make quicker, better-informed decisions about improving water quality. Helps you to maintain high service standards and protects you from reputational damage. Helps to reduce public and employee health risk by minimizing the time taken to identify Legionella. Recording test information while analyzing data helps to create a complete picture of Legionella contamination risk and a roadmap to prevent future outbreaks. I haven’t found my Holy Grail for instant detection and reporting of Legionella bacteria, but these three products move the meter much closer to ending my search. They provide a process of constant water quality monitoring with online access on one hand; 10 minute bacterial detection; and finally 25 minute on-site Legionella test results.   Bravo!  
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