Contractors' responsibility.
Do you, Mr. Contractor, have enough coverage to defend yourself during
a claim? We know you're doing outstanding work, so you'll never
suffer an argument. Fake!! Statistically inaccurate. Someone won't
like your job or feel obligated to get their money back on the job you
did for some other cause. Or you're pulled into a case for which another
contractor was responsible, but attorneys are searching for deep pockets.
For example, I had a plumbing contractor dragged into a lawsuit involving
defective window installation that caused water damage. The plumber did
no window work. Or when a general contractor withdrew money paid him without
ordering his subcontractors' jobs. Are you the general?
Congratulations, your sub did a lousy job, and you're sued. You're
not guilty, just accused. Now you must defend yourself in court. So what's
needed? General Liability or GL shall compensate you for any injury to
an individual or property while you are on the premise.
Have you dropped a hammer from the second floor on someone passing? Have
you dropped a hammer from a second story onto a window below? Recently,
I read a report that a piece of stucco from a building under construction
fell onto a car. That was a $2000 property claim, so imagine if anyone
got injured.
Products and operations.
There is a general liability policy, which protects the contractor after
finishing and leaving the work. Did he leave a nail that later hurt someone?
Or hasn't an assistant double-checked the solder joint, and your plumbing
job leaked and destroyed 10,000 square feet of new wood floor? Yeah, I'm
not making these examples up. They're all factual statements.
Additional insured endorsements in general liability
These incorporate a customer or general contractor as an "additional
insured." to a GL policy. Therefore, whether a subcontractor operates
on his project and causes liability, his insurance is solely liable. The
general contractor has no insurance covering the damage or entering a
court dispute for liability. Typically, if a contractor specializes in
commercial work, he would require product endorsement and completed operations.
This will protect the endorsee for a full 10-year litigation restriction
status. The commercial customer and general contractor would claim such
a unique endorsement. Unfortunately, residential work is not available,
but the agent would need endorsements for both forms if the contractor
does both. Primary wording endorsement means that the contractor's
insurance policy is the first to cover any claims. The customer or general
contractor won't have to pay their premiums and sue the insured's
payment insurance (subrogation). Yeah, and peaking of subrogation, a subrogation
waiver guarantees them you can't come back against them even though
it's their fault. YOUR insurer will cover it, regardless of the fault.
What a lot—believe me, supporters like.
They'll demand it, and here's a new wrinkle for the contractor
you might have already come into. When you started the work, the client
didn't need any of the above, but now that you want to get paid, a
page of specifications unexpectedly appears as a check condition. You've
done the job, and they didn't warn you? Not your problem. Get, or
don't get charged. As an agent, make sure your client, the contractor
you insure, covers all these bases.
New condominium work is a new form of headache.
Let's talk about the new condominiums. A developer wants to build new
condos. And he forms a separate entity called a homeowner's association,
to which he transfers all ownership duties after finishing the project.
Poor job? Nearly always.
He can almost always depend on being sued for roof work or any other thing
because the homeowner's association doesn't want to exceed the
restrictions window status. Therefore, insuring the developer or general
contractor doing new condo work is too costly for an insurance provider,
so most would exempt it from regular policies. Independent Buyers? NOT
The worker's comp segment addressed this. If the insured has workers,
an employee, someone who may be an employee who works one hour a week
or even someone who gets paid on 1099, he may need worker compensation
insurance.
The laws have recently changed so that the definition of an "independent
contractor" has been so narrowed that it is almost non-existent.
The potential penalty for not doing it correctly is $1,000 a day per non-insured employee.
Workers Benefits Subrogation.
The same as general liability coverage, except the insurance provider will
bill by work, by year, or fail to offer it at all.
Commercial vehicle coverage.
This was covered in a previous article, but briefly, the coverage is higher;
you can get $1,000,000 of coverage, which is not a lot for a corporation.
And eventually, it can have non-owned auto liability coverage. Send an
assistant to pick up a part of their car and then get into an accident?
Some companies have employees using their vehicles and equipment on the
job. If they get into an accident while working for the company, the employer
may be sued. If he has inadequate liability limits for his insurance,
its coverage covers up the employer's coverage.
Property coverage.
Have tools and equipment? Office property? Building? If your customer works
from home, business property and tools won't be covered by homeowner
insurance. Umbrella And did I mention that $1,000,000 isn't a lot
of insurance for a business? If your customer gets sued, it'll probably
be more than that. If they do business for another company, they might
want $5,000,000 of coverage.
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