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>> LEARN MORE ABOUT OUR COMMERCIAL & SMALL BUSINESS INSURANCE PROGRAMS
Contractor Insurance Services Snapshot
Are you being proactive in your approach to workers’ compensation and other insurance costs?
We can help you control insurance claims by establishing a safety policy, adopting a return to work program, streamlining reporting procedures and identifying top loss sources.
Below is a very broad Coverage Evaluation Checklist, which can be used as an excellent starting point to determine if you’re buying the right coverage. This ensure we address every possible exposure with you. Feel free to download and save it for your own use or complete with our agency’s team.
As a contractor, your exposures are unique to the nature of the work you do. The below categories are the most critical areas of risk that most of our contractor clients needed to address through proper insurance placement, as well as risk management strategies.
When you enter a contractual agreement with your customer or with other contractors on the job, this involves the legal transfer of risk. Your insurance policies may need to respond to certain aspects of these contracts, but some of the risks you assume may not be insurable. It’s important to share all your contracts with your lawyer and your insurance agent.
The most important aspect of your contracts that involve insurance are the Indemnification Clauses which involve making changes to your insurance policy. Failure to make the necessary changes to your insurance could result in breach of contract and other liabilities, according to some attorneys.
The most common policy changes involve:
- Additional Insured – naming the other party on your insurance policy (also, there are many different types of additional insured clauses, so agent needs to understand the requirements)
- Waiver of Subrogation in favor of other party
- Primary & Noncontributory clauses – meaning your insurance is primary to any losses incurred and transferred by your contractual agreement
PRODUCTS & COMPLETED OPERATIONS
Included in Commercial General Liability insurance policies, this coverage is extremely important for any type of contractor. If “your work” results in bodily injury or property damage to a third party, then you could be held liable and this coverage would provide coverage for defense, settlement and judgements.
INSTALLATION OR BUILDERS RISK
If you need to protect your work (while under construction/repair) from damages like wind or fire, then you may want to buy an Installation Floater or Builders Risk insurance policy.
In most states, businesses are required to abide by state workers compensation laws, which obligates the employer to pay for any medical expenses and lost wages related to work-related injuries or illnesses. Workers Compensation insurance is required to ensure the financial resources are available to meet this obligation. Implementing good safety and training practices into your contractor business will help prevent work comp claims and keep your costs low – we have resources and expertise which can be shared with our contractor clients.
Most contractors have workers driving to and from job sites and auto accidents are one of the most common causes of major liability losses. It’s important to address this exposure, even if your workers are driving their own autos (rather than company autos). Your business may face serious liability if the insurance is not adequate or is written incorrectly (e.g. if personal autos are being used, but coverage doesn’t address the exposure). If your company owns vehicles, then you would of course address the exposure with a Business Auto insurance policy.
If your work is faulty (whether real or alleged) then you may be obligated to fix the problems – through contractual agreements, warranties or personal ethics. General Liability insurance policies usually do not protect against this exposure, but it’s still a common exposure to address.
Of course, the best risk management strategy for this is to perform excellent work. Aside from that, you can also have your attorney review contracts and warranties you use to make sure your liabilities are limited to what you want or need. Secondly, you can also consider purchasing warranty insurance to backup your guarantees to customers.
In the construction business, your work may create environmental exposures:
- Accidental (or intentional) removal of hazardous materials on jobsites
- Discharge pollutants on jobsites or road
General Liability and Business Auto policies restrict or sometimes totally exclude liability from pollution. If you have a serious enough exposure, you may want to purchase Contractor Pollution Liability. Discuss with your agent if you are concerned about this risk.
EQUIPMENT – OWNED/LEASED/RENTED
If you own equipment or tools or if you lease/rent equipment for construction jobs, then you can purchase an Equipment Floater insurance policy to protect against theft or other types of damage. If you just own a small value of tools or small equipment but rent equipment, then buying an Equipment Floater may allow you to save money, by waiving your obligation to buy the insurance from the equipment rental service.
EMPLOYEE LAWSUITS (EEOC)
Workers who accuse your contractor business of wrongful termination, discrimination, harassment or other similar possibilities, you may have to spend a lot of money defending your company (or paying out settlements). Employment Practices Liability insurance is a cost-effective way to protect against this exposure.
If your company retains personally identifiable information (PII), including information on customer financial accounts, social security #s, birthdays, driver license #s, etc., and your records are breached by outside parties, then you may face significant liability. Buying a robust Cyber Insurance policy can help protect against these ever-growing and evolving exposures.
Many of your jobs may require Surety Bonds to guarantee your bids or performance. We represent many of the top-rated surety carriers in the nation can help with almost any size. We even have solutions for “difficult to place” bonds.
- “A Rated” Insurance Carriers
- Property – covers loss to buildings, personal property and loss of income from causes such as fire, lighting, wind, theft, etc.
- General Liability – covers liability arising from personal or advertising injury or bodily injury or property damage occurring on your premises or from your work, products or ongoing operations
- Errors & Omissions Liability – covers liability arising from a professional error or omission arising from work as a realtor, landlord or property manager
- Business Auto – covers physical damage to your owned, rented or non-owned vehicles, as well as liability arising from bodily injury or property damage to others
- Employment Practices Liability – covers liability arising from employment issues like discrimination, harassment, retaliation or wrongful termination
- Directors & Officers Liability – covers liability to director and officers of your company resulting from fiscal mismanagement, breach of duty, etc.
- Fiduciary Liability – covers liability to “fiduciaries” on behalf of beneficiaries of employee benefits, health/welfare plans and retirement plans
- Crime – covers losses resulting from employee dishonesty, funds transfer fraud, robbery or theft and forgery or alteration
- Cyber Liability – covers liability and expenses arising from data breaches
- Workers Compensation – covers your obligations to work-related injuries under workers comp statute, as applies in your state
- Tenant Legal Liability – covers you for damage caused by tenant negligence to your property
- Coverage Enhancement Options (theses are often excluded from coverage unless added by endorsement):
- Ordinance or Law – covers your property for increased costs of construction to comply with updated building codes after a covered loss
- Equipment Breakdown – covers equipment like generators, hvac systems, phone systems, computers, machinery and boilers from mechanical breakdown, explosion or electrical arcing
- Flood – covers your property from flood damage
- Earthquake – covers your property from earth movements
- Punitive Damages – covers loss resulting from judgments which impose multiplication of the general damages as a punishment to the defendant (note: punitive damages insurability by state)
- Mental Anguish – ensures coverage for bodily injury applies to mental anguish, which in some jurisdictions has been classified as such, but in others it’s not so clear
- Wage & Hour – coverage for employment practices liability resulting from disputes over salary vs hourly workers (i.e. exempt vs non-exempt employees)
Shields Insurance Agency is an Independent Insurance Agency based out of Birmingham, AL and we are licensed to write property & casualty insurance in AL, FL, GA, MS and LA. This includes commercial lines and personal lines insurance.
Representing several top-rated insurers, we are capable of writing commercial insurance policies for an array of business types with very competitive pricing and broad coverage terms.
Some of our primary specialties – industries for which we are most competitive – include:
Lets Reduce Your Rates and Improve Coverage
Most people don’t understand their unique risks or their insurance and are therefore buying the wrong coverage and paying too much. If you work with our insurance agency, we will implement our simple 3-step process to identify your key exposures, improve insurance coverage and reduce rates.