Commercial Insurance Coverage

Ok, where do we start?  I know that every day most of you start your day very early and work 50-60 hours a week thinking about bidding jobs, getting materials on the job site, writing estimates, pulling permits, trying to get your guys to show up to work on time and trying to get paid for the work you did months ago.

What I also know, is that many of you pay a lot of money for insurance that is expensive and does not cover your butt for everything you have going on. Perhaps this is because you’re leaving the responsibility up to one of your office people that are not really completing the application to include all of your operations or scope of work you are performing; leaving you fighting with the carrier in the event of a claim only after them finding out that you never disclosed everything on the application. Or maybe the application is not being updated from the previous year and you have taken on more work or bought more equipment.

I would love to tell you that it’s all basically the same, but that’s not the case! General Liability basically covers you if someone slips or falls over your extension cord or you break Grandma’s antique vase, as well as products and completed operations.  Your policy probably has a Total Pollution Exclusion, coverage that would be very important to a Fire/Water Restoration Contractor; meaning your policy does not cover anything to do with a liquid, solid or gas (simply put, your policy excludes mold, lead and asbestos).

This is why you need Contractors Pollution Liability.  A Pollution Liability Policy covers property loss and liability arising from pollution-related damages for sites that have been inspected and found contaminated. It is usually written on a claims-made basis so policies pay only claims presented during the term of the policy or within a specified time frame after the policy expires. Lately, carriers have been offering occurrence policies.

Professional Liability, known as E & O (aka known as Error & Omission). This is when someone is willing to pay for your opinion or service providing consulting or testing. E&O insurance is in the event you give good or bad advice…or they decide they just don’t like your opinion. The coverage is meant to pay for your legal fees to defend you. Package policies are available with these types of insurance and I urge you to look into them, often they are more cost-effective and avoid any gaps in coverage. We’ve had horror stories of contractors calling their General Liability carrier to report a claim, who let him pay his deductible and then tell him the claim will not be paid because they found a mold spore! Hopefully, if he has a CPL policy, he can pay that deductible and wait for the two insurance companies to fight and drag out who is going to pay what part.  All the while, you still have to fix it, make payroll, have major headaches, two deductibles, two open claims on the contractor’s record and two claims instead of one that may take forever to close while the insurance companies wait each other out.

Dick Wagner is a Disaster Restoration and Commercial Marketing Consultant.  419-202-6745