Quarterly report pursuant to Section 13 or 15(d)

Note 13 - Commitments and Contingencies

v3.20.1
Note 13 - Commitments and Contingencies
 6 Months Ended
Apr. 30, 2020
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
13.
Commitments and Contingencies
 
Insurance
 
As of
April 30, 2020
and
October 31, 2019,
the Company was partially insured for automobile, general and worker's compensation liability with the following deductibles:
 
   
Deductible
  
General liability
   $
250,000
  
General liability (in the case of accident and driver has completed NationsBuilders Insurance Services driver training)
   $
125,000
  
Automobile
   $
100,000
  
Workers' compensation
   $
250,000
  
 
We had accrued
$6.3
million and
$5.0
million, as of
April 30, 2020
and
October 31, 2019,
respectively, for claims incurred but
not
reported and estimated losses reported, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.
 
The Company offers employee health benefits via a partially self-insured medical benefit plan. Participant claims exceeding certain limits are covered by a stop-loss insurance policy. As of
April 30, 2020
and
October 31, 2019,
the Company had accrued
$1.4
million and
$1.1
million, respectively, for health claims incurred but
not
reported based on historical claims amounts and average lag time. These accruals are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. The Company contracts with a
third
party administrator to process claims, remit benefits, etc. The
third
party administrator requires the Company to maintain a bank account to facilitate the administration of claims. The account balance was
$0.4
million and
$0.3
million, as of
April 30, 2020
and
October 31, 2019,
respectively, and is included in cash and cash equivalents in the accompanying consolidated balance sheets.
 
Litigation
 
The Company is currently involved in certain legal proceedings and other disputes with
third
parties that have arisen in the ordinary course of business. Management believes that the outcomes of these matters will
not
have a material impact on the Company’s financial statements and does
not
believe that any amounts need to be recorded for contingent liabilities in the Company’s consolidated balance sheet.
 
Letters of credit
 
The ABL Credit Agreement provides for up to
$7.5
million of standby letters of credit. As of
April 30, 2020,
total outstanding letters of credit totaled
$1.2
million, the vast majority of which had been committed to the Company’s general liability insurance provider.