Product Liability and Completed Operations Coverage

By | Uncategorized | No Comments

I want to share a story with you today about the importance of Product Liability and Completed Operations Coverage.  The reason I am sharing in this way is so that you really can relate to it and understand.  You don’t need me to throw a whole bunch of large insurance terms into an article, you need to know how this could affect you from a real life type of scenario.

Beautiful Decks by Doug has been installing high-quality residential decks for the past 10 years. Doug is a sole proprietor with no employees and has done all the work himself. For the past decade, he has purchased through his insurance agent an occurrence-based ISO CGL policy with no unusual endorsements. The policy has been in force continuously for the past 10 years.

Doug’s CGL policy always included coverage for the products-completed operations hazard.

Doug is now getting older and since he is financially secure, he has decided that it is time to retire. He sends his policy back to his insurance agent for cancellation on July 1 and the policy is terminated on that date as Dave has requested.

The Incident…

Unfortunately, Maggie, one of Doug’s customers, is seriously injured when the deck she is standing on collapses on August 31. It is later found that in May, when Doug built the deck, he forgot to properly fasten it to the wall. The collapse is the direct result of his failure to fasten the deck to the wall. Maggie’s injuries are found to have been caused by the deck’s collapse.

Maggie moves forward with suing Doug for her injuries. Doug submits the complaint to his insurer. Doug has always purchased coverage for the products-completed operations hazard!

Nevertheless, the harsh reality is that Doug’s CGL insurer has no obligation to defend or respond in any way to the suit—Doug has no insurance for this claim.

CGL Coverage Trigger

The CGL insuring agreement promises to pay only if bodily or property damage occurs during the policy period. While Doug did purchase products-completed operations coverage as part of his CGL policy, the injury to Maggie occurred about 2 months after his policy was terminated. Products-completed operations coverage of the CGL is subject to and does not override this trigger requirement—even if the bodily injury or property damage does arise from the named insured’s product or completed operation.

Products-completed operations coverage does not extend the policy period—the policy must be in effect when the bodily injury or property damage occurs.

Important Considerations

Now that you understand the workings of products-completed operations coverage, it is important to consider several other situations in which a better understanding of exactly what is included in the “products-completed operations hazard” (which is a defined term in the CGL policy) is necessary.

Policy Limits

One of the six CGL limits is the products-completed operations aggregate limit. Knowing the types of claims that fall within and, therefore, reduce or exhaust this aggregate limit is critical.

Only Products-Completed Operations Coverage Is Provided

For liability policies that are written specifically for a construction project, such as a consolidated insurance program (CIP) or “wrap-up,” it is common to provide full CGL coverage for the period of the construction and then to provide products-completed operations only coverage for some period after construction is complete.

For example, in an owner controlled insurance plan (OCIP) the full CGL policy may be provided for a period of 24 months—the anticipated life of the construction.

The coverage provided for products and completed operations in the standard CGL policy seems to get short shrift. Too little attention is paid to the basics of how the coverage works within the context of the entire policy, including the requirement that any bodily injury or property damage, even if caused by an insured’s product or completed work, must take place during the policy period for coverage to apply.

It is only after this deceptively simple concept is properly understood can the more specific issues that surround the “products-completed operations hazard” be appreciated—such as how policy exclusions and other coverage endorsements affect the products-completed operations hazard.

If you have questions about your liability policies please don’t hesitate to reach out to one of our licensed agents at Contractors Insurance Agency.  We are happy to help explain everything clearly so you fully understand your coverage.

The “No Surprise” Premium Audit

By | Uncategorized | No Comments

If you own a business, you are aware that one of the tasks that often comes with such ownership is an annual audit.

Most business policies are auditable, particularly those covering contracting operations. No premium audit should ever be a surprise. It’s an annual occurrence.

Be sure to advise Contractors Insurance of changes in exposure, payroll and receipts, and in your day-to-day operations. Addressing increases in exposure during the policy term allows you time to pay for the increase, rather than facing a surprisingly large audit premium and increase in policy renewal premium.

Are you pursuing new and larger contracts? Are you looking to travel farther, or advancing into new product or service areas to grow? Keeping our agency in the loop on such ventures is important.

There are three contracting classification issues that can be
a surprise when businesses are audited:

  1. Executive supervisors exercise control through foremen who oversee the actual work. Without this distance from actual field operations, the executive supervisor classification is not applicable. In this situation, the principal would most likely be considered a carpenter.
  2. Paper contractors, which have few or no employees and subcontract most or all operations, are rated appropriately with one of the carpentry classifications.
  3. Materials provided to insured subcontractors must be accounted for and provided when a business is being audited. The cost of these materials will be included in the appropriate insured subcontractor classification. Material costs are a part of the definition of an adequately insured subcontractor per ISO (Insurance Services Office), which provides insurance companies with statistical services.

Our licensed agents at Contractors Insurance are always happy to guide and assist you with any classification or policy questions.


Why is a Certificate of Insurance Important?

By | Uncategorized | No Comments

Are you a contractor, or a business that works with contractors? Then you’ve probably dealt with a certificate of insurance (COI). As a contractor, you’ve likely been asked to provide one to someone for whom you have worked. This is proof that you have proper insurance for the work you’re being hired to do. In fact, it can be an added benefit when you’re bidding for work.

What is a Certificate of Insurance?

Before we get into anything else, we have to clarify one very important thing. A certificate of insurance is not an actual insurance policy, and it’s not something you pay for. A COI is merely a document proving that you have insurance. It will typically show the types of coverage you carry, and what your liability limits are.

Why is a Certificate of Insurance Important?

For someone regularly hiring contractors, a COI can make a big difference in whether or not they choose you over someone else. If they hire a contractor without proper insurance, which can be proven with a COI, the company hiring the contractor could be held liable in the event that something goes wrong. Sometimes accidents happen and damage is done, but with a COI, you can prove that if something does occur, you’ll be able to cover the damage costs. The same thing applies if one of your workers gets injured on the job. With workers compensation insurance and the COI, you’ll be able to prove that you can take care of the costs and liability associated with any of these unfortunate circumstances.

Why Does Someone Want to See Your COI?

As a contractor, people for whom you work will always request a COI. They want to know and make sure that you have proper insurance coverage, so that they aren’t liable in the event of a claim. By having a COI, you are showing them a couple of things about your business if you have proper insurance coverage.

  • Common business coverage includes general liability insurance, which covers you if damage is done to property or someone outside of your company is injured on the job. Showing proof of general liability on your COI gives peace of mind to the person hiring you because they know that you’ll be responsible if an accident occurs.
  • Another type of insurance you should have (if you don’t already) is workers compensation. By proving that you have workers comp insurance, you can assure whoever’s hiring you that if one of your workers is injured, you’ll be able to cover their costs, and no one but you will be liable for their injury.

How is a Certificate of Insurance a Selling Point?

Unfortunately, some contractors will try to convince a business hiring them that they have proper insurance, when in fact they don’t. This is one of the reasons it’s so common for people to request your COI. Even with a COI, some contractors will use one that is expired or fake. With an accurate and current COI, you can assure the business hiring you that everything is covered and they won’t have anything to worry about. You can point out a couple of things to reassure someone that you’re reputable and your insurance is up to par.

  • Show them what types of insurance you have and why each one applies to their particular job. Explain that workers compensation coverage will protect them in the event that one of your employees gets hurt on the job. Do the same with your general liability coverage. These explanations will help them understand who holds the risk and how that benefits them.
  • You can also show them that the name on the COI is the same as your business, verifying that it is actually for your business and is valid.
  • The same applies for the dates on the COI. Point out that your insurance is current and will last throughout the job duration. If your insurance is set to renew during the job, assure them that you will present a new COI when you renew it.

While these things might seem simple or pointless, it can show that you care about transparency, and want to make sure everything is taken care of when it comes to the job.

How Do I Get a Certificate of Insurance?

When someone requests your COI, just go to your insurance agency and request it from them. You can then send it to whomever needs it. If you don’t have insurance, then you’ll need to get insurance before you can request a COI. As mentioned above, not only is it important to have insurance for your business, but it can also be added value when bidding for work.

Contractor’s Insurance Agency Can Help

If you’re a contractor and need insurance, Contractor’s Insurance Agency can help. Our name might give it away, but we specialize in helping contractors with their insurance needs. If you have insurance already, but have questions about COIs, feel free to give us a call at (888) 266-5120 or drop by our office. We’d love to serve you!

Ensuring a Safe Job Site is Essential

By | Uncategorized | No Comments
For the first time in many years, OSHA has made significant changes in their PPE (Personal Protective Equipment) requirements.  We urge you to take a look at this “Quick Glance Card” they have issued, to make it easier to understand.

The basics of these new requirements regarding policy and certificates are:

  1. When it comes to liability insurance for contractors in terms of PPE, it is vital that you have a current liability policy for yourself and any and all employees at all times.*
  2. You’ll always be issued a Certificate of Insurance that should be kept with you at all times on the job.
  3. This certificate verifies that you hold fully active insurance coverage, workers’ compensation, employer (contractor) liability, general liability, and what the liability limits are.
  4. There is a lot of coverage in this, but to boil it down, ensure that the coverage includes premises and operations, independent contractor, products, completed operations and contractual liability.
  5. The Certificate should clearly state that your primary coverage is contractor liability.
It’s important to understand that the Certificate of Coverage is simply that—a certificate stating you have coverage. It is neither indefinite nor a guarantee of coverage. It’s your responsibility to make sure your coverage is valid. As a contractor, you are responsible for maintaining all PPE requirements for yourself and any and all of your employees. As we’re sure you already know, most people are aware of what PPE is— equipment designed to protect your head, eyes, body, extremities, and even lungs. It’s safe and smart to use, even if you’re only going to be on site for a few minutes. The old adage “better safe than sorry” is never truer than here! So, the laws state PPE is necessary when high-risk work is being undertaken, and responsibility for supplying it is in the hands of the contractor, along with liability insurance as you are, in effect, self-employed.

What are your obligations?

In brief—please remember, this is not an all-inclusive list and we, along with OSHA’s guidelines, will help you make your way through all the jargon-filled twists and turns!
  • Performance of a complete and comprehensive survey and assessment of any and all workplace hazards
  • Identification of all required PPE and ensuring adequate quantity
  • Full training in the usage of PPE
  • Inspection and maintenance of the PPE, replacing when necessary
  • Record-keeping of any and all safety incidents
  • Remember—it is your responsibility to strictly enforce the wearing of and adherence to all PPE regulations, and to update your compliance program whenever circumstances may change

A few best practice tips for you as a contractor to achieve safety compliance and work without complications:

  • Make sure your PPE policy is in writing, and everyone can easily and quickly refer to it when necessary. A written policy is a requirement of OSHA.
  • Keep up-to-date with state and federal regulations that are specific to your industry. Professional associations can help you with this, if you’re unsure of them.
  • Enforcement, enforcement, and enforcement yet again! Hold everyone responsible, set the rules, and be ready and willing at all times to set the example. Remember, you and your employees are your responsibility.
  • Your PPE policy should follow all regulations set forth in any Material Safety Data Sheets—make sure these are at-hand and everything is in perfect sync.
  • Check you have the correct level of hard-hat protection for the job, as there are three classes of protection.
  • The proof is in the details! Check to make sure, just as with the hard-hats, that gloves and the like are adequate to the job hazard presented.
  • Record-keeping, record-keeping, and more record-keeping! Just like with enforcement, this needs to be stressed.
So when it comes to your liability protection, PPE compliance is only one among many. Along with talking to us here at Contractors Insurance, OSHA’s website is your go-to. It contains some easy-to-understand information for contractors. We have also created a downloadable checklist for a PPE audit. Download it now. ___________________ * This information is not to be deemed legal advice on your insurance liability responsibilities, and legal counsel should be retained if you have questions. This information is for liability insurance requirement purposes regarding Personal Protective Equipment.
Insurance for construction equipment

Insuring Your Equipment is Insuring Your Livelihood

By | Uncategorized | No Comments

Insurance, insurance, insurance—I just can’t keep it straight! Do I need to have Inland Marine insurance for my business? And what exactly is it?

Do you ever feel like this when it comes to protecting your excavation or contractor business?

Let’s start at the beginning. Inland Marine Insurance (IMI) is a specialized type of property insurance that covers equipment that likely will be moved from site to site. IMI is also used for equipment that is in a class of its own when it comes to valuation, such as small tools, self-propelled equipment, and other miscellaneous equipment.

Here is a little background so you understand how this insurance came about. Long ago when companies were shipping goods overseas via freighters or the like, this special insurance was created and called Ocean Marine Insurance. As times progressed and shipments started transporting in other ways, it was renamed to Inland Marine Insurance. It’s all about protecting goods and equipment during transit while “on the move.”

Therefore, IMI coverage is used to insure specific equipment that will move from place to place or has a unique risk, such as tools, cargo, and even fine art! Though you wouldn’t think fine art would go in this category, just imagine how it is transferred from museum to museum, or gallery to gallery. There are so many types of “equipment” that move from location to location, ranging from construction equipment and cargo to even things such as musical instruments, medical equipment in mobile vans, and even movie cameras.

So, now that you understand better what it is, let’s talk about why you should have this coverage as part of your insurance protection plan.

Although IMI is a bit more of an investment than just having “regular” property coverage, it gives you extra protection from theft or damage to your equipment, during transit or off premise.  Whereas the basic property coverage applies to equipment limited to your premise only.  This is the primary difference between the two types of coverage

If you have equipment of any type that will be moved or used off-premises, we highly recommend you add this protection to your policy if you don’t already have it. Examples of contractors who need IMI would be builders, installers, construction companies, excavators, tree trimmers, etc.

So, simply put, if you have equipment or tools that are used off premises, give Contractors Insurance Agency a call and let’s discuss what your policy and investment would look like.  Most clients are surprised at the affordability of adding Inland Marine Insurance coverage.

In conclusion, if any of your equipment is used off premises, you want to be sure that it is covered properly so that no matter what happens you can have peace of mind that you are protecting your investments in the best way you can. At Contractors Insurance Agency, all of our agents are CRIS Certified (Construction Risk and Insurance Specialist).  Also, we are not your typical “jack-of-all-trades” insurance agency!  Due to our specialty focus we have access to selected programs and more competitive rates for contractor business owners like you, than the traditional agent.

Feel free to leave a comment or ask any questions! If you are ready to get a quote, just reach out to us and let’s talk. We are here to help!

//Function generates a current year and adds language for copyright notice. var currentYear = function() { var d = new Date(); var n = d.getFullYear(); document.querySelector(".copyright-text").innerHTML = '© Copyright ' + n + ' Contractors Insurance Agency'; }// ~end copyright currentYear();