Archive for Contractors
Arborists are tree specialists. They frequently consult and provide advice on the type of tree to plant and where to plant it. These decisions can have impact on power lines, sewer systems, and fire exposures. Arborists often provide tree-related services such as planting, trimming, removing, and spraying. Some arborists own nurseries.
Bridge, Tunnel, and Elevated Highway Construction
Contractors working on bridges, tunnels, and elevated highways work under very dangerous conditions while operating extremely heavy and expensive equipment. These projects are long-term so stability of coverage is vital. Mistakes made at any stage of construction can be deadly and expensive.
Builders risk coverage forms insure buildings and other structures under construction. They are available for a single structure or multiple structures. Premiums can be paid at inception or be based on a deposit premium and periodic reports of value accompanied by premium payments. Coverage is usually for “all risk” perils or causes of loss and may also include earthquake, flood, and broad form collapse. Endorsements are used to broaden, limit, or customize coverage as needed. Deductibles are required. Coverage for design may be purchased separately and includes damage to a building that results directly from an error in its design. It is written as standard builders risk coverage but has an additional charge for design error coverage, which is subject to its own deductible.
Building Equipment Erection and Installation
Contractors that install equipment in buildings may work on a jobsite for as little as a day or for more than a year, depending on the nature of the work and the equipment being installed. While they don’t manufacture the equipment, they install it and must be certain that it is in proper working condition before the job is complete. The installation floater, general liability, and workers compensation exposures are extensive.
Burglar, Fire Alarm and Safety Equipment Company Liability
The insurance industry strongly encourages its clients to purchase a variety of safety equipment but few insurance companies are willing to insure safety equipment providers. Manufacturers, distributors, and businesses that install and service fire extinguishers, burglar alarms, sprinkler systems, and ventilation hoods with extinguishing systems for restaurants may find that only specialty markets can arrange coverage for their unique exposures and needs.
Carpentry Work Contractors
Carpenters erect the structural portion of dwellings and commercial wood frame buildings. If their work is faulty or not done correctly, all work that follows is also faulty.
Concrete Work Contractors
Concrete contractors pour the foundations and basements that are the start of any building. A mistake in the concrete can result in a new building being torn down after cracks or faults begin to appear. Concrete work contractors also build sidewalks, driveways, and many other projects that involve concrete. The mix-in-transit concrete trucks are top heavy resulting in a significant automobile liability and physical damage exposure.
The construction industry consists of businesses primarily engaged in constructing and maintaining buildings and other structures. The three major types of construction are: (1) building construction, land subdivision, and land development; (2) heavy construction such as highways, power plants, and pipelines; (3) artisan construction by special trade contractors.
Construction/Environmental Testing Laboratories
Contractors, consultants, and engineers need the services of special testing laboratories to sample and analyze ground water, waste, waterways, air quality, soil, and hazardous waste. These laboratories may be independent contractors or may operate in connection with environmental consultants or engineering firms. Some labs are mobile and are transported to construction sites. Separate insurance programs are available for testing laboratories involved in acoustics and vibration, biological, chemical, construction materials, electrical, geotechnical, asbestos, mechanical, and thermal testing. Professional liability and pollution liability coverage is available.
Consultants Professional Liability
Consulting firms advise their clients on specific management or business problems. The services provided can include offering advice on employment practices, sales development, time management, executive search, marketing strategies, computer testing, and other matters. Insurance coverage is usually tailored to match the specific services the consulting firm offers. Underwriters evaluate every activity the business conducts before they accept it and determine the appropriate premium to charge.
Contractor Controlled Insurance Plan (CCIP) aka Contractor’s Wrap-Up
General contractors may purchase liability and workers compensation insurance for all operations on a specific construction project, including those performed by subcontractors. Many states have criteria for approving such programs and they must meet certain contract cost requirements. The use of wrap-ups brings all construction insurance costs and coverages into a single workers compensation policy and a single CGL policy, which can eliminate gaps in coverage and non-concurrency of limits and policy language.
Contractors Design and Build (Project Managers)
The design and build concept of construction contracts consists of a contractor and architect under the construction firm’s management being responsible for the project from its inception through the design process, during construction, and until it is completed. The construction firm may have its own design capability, own a subsidiary design firm, or hire an independent architect and engineering firm. One important feature of this coverage is professional liability for the construction firm that has both design and build functions.
Contractors Equipment Insurance
This inland marine coverage insures contractors’ equipment on a scheduled or blanket basis. For many contractors, their major assets are equipment, such as cranes, power shovels, tractors, and bulldozers. Large items can be specifically scheduled, while a blanket limit may be used for smaller items. Tool coverage, including employee tools, can also be provided. Coverage is often based on all risk-type perils or special causes of loss and is tailored to suit the individual insured’s needs. A deductible sufficient to eliminate smaller, petty pilferage losses is preferred. Special limitations on crane-use are common.
Contractors Pollution Liability
This coverage provides both sudden and gradual pollution coverage for contractors. This insurance is off-premises coverage at job sites where the contractor is working for others. It covers both third-party damages and cleanup costs.
Crane and Rigging Contractors
Crane operators and riggers are high-risk businesses. Huge bodily injury losses that could financially ruin a large operation if uninsured or inadequately insured are possible. Exposures also include damage to property, such as destruction of a building, bridge, or train track and consequential loss of use to utility customers if utility lines are damaged. High liability limits are necessary and commercial liability umbrellas should be used to provide additional limits. Crane and derrick contractors, rigging, and millwright contractors are eligible.
Demolition Contractors Liability
Demolition operations are extremely hazardous, especially in urban settings. The use of explosives and the ever-present danger of building collapse during demolition present significant liability exposures to the general public and to adjacent structures that are not being demolished.
Electricians frequently work under extremely hazardous conditions. The type of equipment involved and the structures where they perform operations determine the degree of hazard. When a fire occurs, the electrical work and the electrician who did it are usually the first suspects. The workers compensation exposure is also significant, particularly for those working on commercial projects.D597
Elevator Maintenance Contractors
Elevator maintenance and repair contractors are difficult to insure because of the serious losses that may result from an elevator failure. Special programs are available that include commercial general liability and completed operations liability coverages. Excess liability coverage is also available. Property damage liability deductibles may be required.
Insurance for excavation contractors can be difficult to place because of liability that arises from their work at building sites to remove basements, pilings, and concrete piers that previously supported buildings that were demolished. Coverages available include commercial general liability and completed operations liability. Coverage for underground, collapse, and explosion hazards is very important and is usually available for an additional premium charge. All excavation work is inherently dangerous, especially the exposure to workers due to equipment that overturns and cave-ins. As a result, workers compensation coverage is very difficult to place. Contractors’ equipment coverage is also difficult because of the potential for equipment to overturn.
Fire Protection Industry
These are service contractors that sell, service, install and repair fire protection and suppression systems such as sprinklers, extinguishers, fire extinguishing systems, grease cleaners, and wet chemical fire suppression. Package programs are available that cover general liability, products liability, and errors and omissions. Some also cover incidental alarm installation.
Fireworks Displays: Contractors Risks
Commercial general liability coverage is difficult to place on this class of business even though many competent contractors set off fireworks displays for various types of programs sponsored by others. Shopping centers, municipalities, and civic and fraternal organizations also arrange fireworks displays to attract the public. Specific insurance is written on each display and rating is based on the contractor’s receipts. Due to the inherent danger that explosives present, coupled with the catastrophe exposure to large numbers of spectators over whom the sponsoring organization exercises little control, this is a difficult coverage to place. Small contractors are especially difficult to place because their operations do not generate much premium.
Floor Laying and Other Floor Work Contractors
Contractors that install floor coverings may be party to any lawsuit brought by an individual who slips and falls on the installed floor covering. Floor coverings must be installed so that the floor can be traversed without tripping. Environmental problems can arise from the adhesives or finishing chemicals used. A serious problem to consider is the removal process for any existing asbestos-backed linoleum or tile. Installation floater, general liability, and workers compensation coverages are all important.
Garage Door Installation
Garage door installation is extremely dangerous because of the need to precisely attach and adjust the spring mechanism. An employee can be severely injured during the installation. The garage owner can sustain a significant bodily injury and/or property damage if the spring installation should release unexpectedly. These markets are interested in working with garage door installers:Garage door installation is extremely dangerous because of the need to precisely attach and adjust the spring mechanism. An employee can be severely injured during the installation. The garage owner can sustain a significant bodily injury and/or property damage if the spring installation should release unexpectedly.
General Contractor: Apartments and Condominiums
General contractors that specialize in apartment and condominium building construction often perform the carpentry portion but subcontract out the remaining operations. This class of business is increasingly difficult to place, particularly in the West and Southeast, due to mold and construction defect claims.
General Contractor: Industrial and Warehousing
General contractors involved with industrial and warehousing operations must work closely with the building owners to develop plans for heavy equipment installations. These projects can be of a long-term duration and may depend on the dates the equipment is manufactured. Subcontractors perform most of the actual building and the general contractor supervises them. Some builders risk exposures can be significant.
General Contractor: Nonresidential Buildings – Not Industrial or Warehouse
General contractors that construct other types of commercial buildings often specialize based on the project’s size. Smaller projects may be strip shopping centers or retail-type buildings while others may specialize in high-rise office complexes. The exposures vary based on the scope of the project. However, most general contractors provide only jobsite supervision on work that subcontractors perform.
Glass and Glazing Work Contractors
Glass and glazing contractors face exposures based on the types of jobs handled and the work performed. Installing windows in high-rise buildings presents a much greater potential for both general liability and workers compensation losses than repairing or replacing automobile windshields. The vehicles these businesses use are specially designed to transport glass safely. Installation floater exposures can be substantial.
Heating & Air Conditioning (HVAC)
Heavy Construction Contractors
This class applies to commercial contractors not considered artisan contractors and not otherwise classified. Most have significant equipment values and workers compensation exposures, with liability exposures based on the type of work performed.
Highway and Street Construction Contractors
These contractors have serious workers compensation and liability exposures because they are involved with the public. In addition, many use specialized and expensive equipment to perform the necessary work. Insurance on long-term highway projects may be written in wrap-up programs.
Homebuilders are general contractors that specialize in residential 1-4 family dwellings. Some have no employees and use only independent contractors while others employ framing crews and use independent contractors only as needed. Construction defects claims are a major concern that has caused many carriers to significantly restrict coverage for defects or eliminate defect coverage entirely. Other coverages most homebuilders need are property/inland marine, builders risk, employee benefits liability, crime, auto liability and physical damage, and umbrella liability. When homebuilders employ crews, workers compensation coverage is also needed.
Installation Floaters : High-Value
High-valued installation floaters are written on extremely large projects that require installing large and/or elaborate and/or complex pieces of machinery and equipment. This work takes place at the customer’s location and can last many months or even years. The owner usually does not accept the project until all required testing is completed successfully. The large sums of money invested in this machinery and equipment, the relative scarcity of such equipment and component parts, and the length of time required to complete the installation combine to make high-value installation floater insurance a specialty line few underwriters provide. This coverage is usually written on inland marine coverage forms.
Janitorial service contractors provide daily, weekly, monthly, or other periodic building maintenance work. Services include washing windows and/or walls, waxing floors, shampooing carpets, and other building maintenance services. Most standard markets are not interested in writing them because of the control they have over the building, and because of the possibility that machinery or cleaning agents may damage floors or carpets.
Land Improvement Contractors
These contractors specialize in excavating, improving, and grading land sites to prepare them for development and eventual construction of buildings. Insurance programs for this class of business usually provide coverage for property and liability, automobiles, contractor’s equipment, buildings, and contents. Umbrella coverage should be part of the program.
Lawn Care Services
The typical lawn service cuts grass, controls weeds, insects, and lawn diseases, dethatches or aerates lawns, and seeds or sods new lawns. Many lawn services also do landscaping, maintain plants and shrubbery, and install automatic lawn sprinkler systems. The primary underwriting concerns are the experience of the lawn service and the training program and experience of employees. Spraying pesticides and herbicides or fertilizer is a significant liability exposure, primarily because of the possibility of drift. The insurance carrier usually thoroughly checks and analyzes the chemicals that lawn service companies use.
Lead Paint Removal Contractors
Lead additives were eliminated from paint used in residential and commercial applications in 1978. Many buildings painted before that date still have lead exposures because paint that chips exposes previous layers of paint. Lead paint removal contractors remove the lead paint so that it no longer poses a problem.
Lead-based Paint Renovation, Repair and Painting Coverage
The Environmental Protection Agency (EPA) guidelines require contractors or landlords that renovate, repair, or paint structures built prior to 1978 to be certified. Any type of defined major activity must be performed within the EPA guidelines in order to prevent lead contamination. This coverage provides bodily injury and property damage caused by the lead contamination related to these renovation activities.D656
Masonry, Stone Setting and Other Stonework Contractors
These contractors finish building exteriors and also do interior work. The ones that do exterior work may do so at heights and this presents serious liability and workers compensation exposures and concerns.
Material Handling Contractors
This coverage is designed for contractors that have significant care, custody, and control exposures for property of others, such as crane, derrick, and dragline operators, rigging contractors, and millwrights. Insurance coverage forms and policies are available that provide commercial general liability coverage, including coverage for property of others in the insuredâ€™s care, custody, and control for hoisting and rigging. Additional limits are available through umbrella liability as well as coverage for the insuredâ€™s contractorâ€™s equipment.
Owner Controlled Insurance Plan (OCIP) aka Owner’s Wrap Up
Building project owners may purchase liability and workers compensation insurance for all operations at their specific construction projects, including those performed by the general contractor and all subcontractors. Many states have stringent criteria for approving such programs and they must meet certain contract cost requirements. The use of wrap-ups brings all construction insurance costs and coverages into a single workers compensation policy and a single CGL policy, which can eliminate gaps in coverage and non-concurrency of limits and policy language.
Owners and Contractors Protective Liability (Monoline)
The OCP policy provides liability coverage for a named insured who is sued for injuries related to the actions of a contractor working on his or her behalf. The contractor purchases the coverage but the owner/contractor for whom the contractor works is the named insured. Coverage is limited to bodily injury or property damage that results from operations of a contractor while working for the named insured. Coverage is limited to a specific project or contract and ends when the project is complete or the terms of the contract are fulfilled.
Painting: Exterior Contractors
The type of structure being painted and its location largely determines the loss potential for this class of business. Bridge painters must contend with traffic, wind, and working at heights. Commercial building painters must contend with traffic congestion and pedestrians. The type of paint used and exposure to its fumes are additional concerns. Paint overspray is always a concern but may not be insurable in every case.
Painting: Interior and Paper Hanging Contractors
These contractors work in residential and/or commercial settings and in both new and existing buildings. The type of paint and adhesives used and the amount of and height of scaffolding are important workers compensation concerns. Wallpaper costs can vary, especially if they are custom made, and can necessitate significant installation floater limits.
Pier and Dock Contractors
The water exposure is significant so these contractors must carry both land-based and ocean-based coverages. Coverage for injuries to employees is especially difficult because the employer may be required to satisfy state workers compensation laws as well as federal laws such as the Jones Act and the Longshore and Harbor Workers Compensation Act. These contractors have significant general liability exposures but may also have protection and indemnity (P&I) exposures when they work on the water. In addition, many of them own watercraft from which they perform operations.D687
Plastering, Drywall, Acoustical and Insulation Work Contractors
These interior contractors perform most of their work in enclosed buildings or structures. The major exposure is workers compensation due to significant lung-related occupational diseases. Liability exposures are normally limited, but past problems have been associated with allergies and illnesses on the part of building occupants
Plumbing, Heating and Air Conditioning Contractors
These contractors provide some of the basic services that nearly every building or structure needs. Their installation floater exposures are increasing because of the increase in the cost of metals. This also means extra security is often needed even after the installation is complete but before the entire job is finished and the contractor leaves the site. The contractor’s size and the nature and scope of its projects determine market availability and the premium charged.
Power/Pressure Washing Contractors
Home and business exteriors require regular cleaning to maintain the property’s appearance and to keep them from deteriorating. Pressure and power washers use high pressure streams of water to remove accumulated grime. These contactors’ primary exposures are general liability, workers compensation, automobile, and inland marine.
Radon Mitigation Consultants and Contractors
This is professional liability coverage for contractors and laboratories that test for the presence of radon gas in the soil surrounding residential or other buildings. These contractors also provide services to remove or eliminate radon from the property.
Residential Remodeling Contractors
These contractors make one or more changes to residential properties. Some use their own crews to handle all the work. Others may subcontract some or all of the work to others. They supervise all work performed on behalf of the property owner.
Roofing, Siding and Sheet Metal Work Contractors
Most roofers are small contractors that tend to hire young and/or inexperienced persons to work at elevated heights and/or on uneven surfaces. The use of hot tar on some roofs is an additional hazard. Workers compensation rates are high due to the nature of the activity and working at heights. These contractors also need liability coverage and bonds.
Sand and Gravel Haulers
It is often difficult to place auto liability and physical damage insurance for commercial trucking companies or independent owners of trucks that haul sand, gravel, aggregate, or ore. These trucks often operate in areas of the country where roads are narrow and winding. Heavy loads of sand, dirt, ore, gravel, and rock add considerable weight to the truck. These vehicles can suddenly go out of control, especially if they are not well maintained. Vehicles are rated according to use, size, distance traveled, and the equipmentâ€™s original cost.
Scaffolding risks present difficult liability exposures due to operations being conducted at great heights. Workers compensation losses are a major concern but not the only one. Liability exposures result from tools and other objects being dropped from scaffolds and onto other workers, pedestrians, or vehicles. In addition, incorrectly assembled scaffolding may collapse and injure workers and third parties. Education, training and an attitude of safety first is vital.
There are different types of snow-removal contractors. Individuals add a blade to their pick-up or SUV and remove snow for neighbors and local businesses in order to provide service and obtain supplemental income. Other contractors provide the service as an extension of their landscaping or other seasonal-type operations. These contractors may have employees and remove snow as a primary source of wintertime income. In either operation, the primary exposure is automobile liability and physical damage. The contract with the customer is extremely important because of requirements in it that could expose the contractor to general liability exposures if it fails to meet the requirements. A homeowners endorsement may be available for very small contractors.
Storage Tanks: Aboveground
The same carriers that write coverage on underground storage tanks also write similar coverage on aboveground storage tanks. Refineries and bulk plants are likely candidates for aboveground storage tanks coverage. Carriers can cover tanks that hold chemical, paint, pesticides, and other liquid toxic substances. There is no age restriction on tanks but older tanks are usually charged higher premiums. These policies provide on-site cleanup and third-party liability.
Surety Bonds: Small Contractors
It can be difficult to find bond markets willing to write coverage on contractors just starting in business. A number of programs are available for contractors that have less than $500,000 in annual revenue. Coverage is available for performance, payment, and bid bonds for a variety of small and artisan contractors. Sureties examine the contractor’s stability as well as its financial management. After a few jobs are completed successfully and without default, these risks improve substantially and the account can grow with the agent, who usually also writes the contractor’s commercial general liability and commercial auto lines of business.
Swimming Pool Contractors
Backyard swimming pools are common and many home owners have permanent pools installed. Installation involves preparing the ground and installing concrete or wooden decks, piping, pumps, and filters. Other ancillary facilities in the pool area may be included, such as dressing rooms, showers, hot tubs, and slides. Using chemicals to purify the water or to eliminate mold or algae adds to the risk. Specialty contractors do the installation and maintenance. Liability exposures arise from swimmers who drown or are injured due to negligence in installation or maintenance work.
Terrazzo, Tile, Marble and Mosaic Work Contractors
These contractors work inside and outside both residences and businesses. Most work requires scaffolding which increases both liability and workers compensation exposures and loss potential. High installation floater limits may be needed due to the value of the materials being installed. Having expensive materials on hand increases the potential for theft losses.
Third-Party Fidelity Coverage
Third-party fidelity insurance coverage is available to a variety of contractors that make regular service calls to homes and businesses. Examples are air conditioning and heating services, appliance and television repair services, burglar alarm installation businesses, maid and janitorial services, pest control services, and detective and security guard services. Computer service providers are also eligible for this coverage because their employees have access to their clients’ computers. This crime coverage, also known as clientâ€™s property coverage, protects both the service provider and its client from losses due to dishonest acts that the service provider’s employees commit.
Tree Service Liability
Tree service companies have hazardous liability exposures. They include tree surgery, spraying insecticides and pesticides, removing the wrong tree, and removing stumps. Bystanders may be injured by falling limbs and tree trunks. Damage to property of others may occur when the tree service trims branches or removes trees.
Utility Systems Construction
Contractors that build and maintain water and sewer systems, oil and gas pipelines, and communications systems are in the utility systems construction business. This requires that they use specialized equipment in their work. Projects are usually large and some of them can last several years. The size and complexity of these contractors requires underwriting and claims specialists and risk managers. Some of these projects are written in wrap-up insurance programs.
Water Well Contractors
Water well contractors drill for water. However, they may also monitor wells and drill for soil samples. There are liability exposures from the initial on-site drilling activity as well as continuing existence hazards if they have monitoring responsibilities. Drilling rigs present a significant property exposure because of their values, the potential of equipment being lost in the well, and the difficulty in obtaining proper equipment valuation. These rigs are often in undeveloped areas which can result in significant over-the-road and off-road potential for overturn and vandalism.
Welders are subcontractors that use arc welding techniques to bring together two pieces of material. The material is actually melted in bringing the pieces together. Additional material may be added during the melting to cause the joint to be stronger than the pieces. An improper weld can cause the equipment or a structure to rip apart causing significant property damage and/or bodily injury. Coverage is needed for the equipment including tanks of welding material and the liability including the completed operations exposure.
Welding Supplies Sales and Distribution
Welding supplies consist of multiple types of equipment. However, the most volatile aspect of the business is the gas supplied to the welder. The storage of the gases on premises adds to the fire and explosion potential and the supply of the gases to the welder adds to the product exposure.
General contractors or project owners may purchase liability and workers compensation insurance for all operations on a specific construction project, including those that subcontractors perform. Many states have criteria for approving such programs and they must meet certain contract cost requirements. The use of wrap-ups brings all construction insurance costs and coverages into a single workers compensation policy and a single CGL policy which can eliminate gaps in coverage and non-concurrency of limits and policy language.