5 Ways Insurance Needs are Changing for the Snow Removal Professional

2018 has already been a record year for snowfall throughout many parts of the United States and we are not through with winter yet. The ground hog has predicted 6 more weeks of winter. As a result, weather has caused a huge demand for snow removal generating a greater need for protection for the people doing this work. Snow plowing, just as many other industries, is in the midst of a technology revolution that is changing the business and how it is performed. And, those new methods are changing the nature of liability for snow plowers and others working in this industry.

snow removal

Image Attribution:  Pixabay CCO Creative Commons, Free for commercial Use

In the early years of the 20th Century, after the automobile were first mass produced, snow plowing was fairly straightforward. Individuals and companies attached a snow plow or shovel to their truck, or tractor, and went forth to do battle with the snow by either pushing it off the lot or street, or hauling it away to a vacant area where it could be left to melt.
Many snow removers did so on a part time basis or as seasonal work and continue to do so. However, the snow removal industry has evolved into big business due to changing transportation needs for roadways, airports, railroads, monorails, and truck and bus terminals. The military also had need for snow removers and innovations developed for the military found their way into commercial use. Regardless of whether you are a small business or a huge contractor, changes have and continue to come about which impact your insurance needs if you are in the snow removal business.

Your state will, in most cases, require that you obtain a CDL license and a business license to perform snow removal. You will need general commercial general liability insurance for those inevitable slip and fall instances where you may have liability. Your class codes on your commercial general liability insurance needs to reflect snow plowing even if you only perform this activity on a seasonal or part time basis.

You may also need to add an endorsements to your CGL for completed operations to cover accidental slips and fall on premises where you have completed the process of removing the snow and ice. You will also need to make sure your commercial auto policy reflects you are in the snow removal business. If you have employees you will need workers compensation. If the employees drive their own vehicles you will need non-owned commercial auto.
Other insurance should be considered based on the following factors:

1. New equipment has been designed and built for snow removal for specific industries ranging from simple walk behind snow blowers to massive high powered heavy duty equipment and vehicles.

Equipment now encompasses, snow blowers, dump trucks chassis with modifications, snow cats, snow rollers, de-icers, front end loaders, gritters, Snowgers (a type of auger used for removing snow under semi-trucks and busses) snow melters, plows and sweepers.
In the past an individual could use a personal truck and rely on their personal auto insurance coverage. Now your insurance can be voided if you do not reveal your using your personal truck for business and have commercial auto coverage or have a separate commercial auto policy specifically for snow plowing and/ or commercial equipment coverage. Businesses should have a separate commercial auto policy covering all their road worthy vehicles. Commercial equipment should be covered under your business property insurance with endorsements, riders or a specific policy for that item as well as marine inland insurance for those items which must be transported to a work site. If equipment or machinery is rented you need to have an endorsement or a floater covering those items.

2. New chemicals such as sodium chloride, magnesium chloride and calcium chloride are now used in the process of deicing and anti-icing which have environmental implications.

Many regulations are in place which prohibit snow removal residue from being dumped near to, or in a waterway. This means that a snow remover could be sued for environmental pollution of nearby waterways that become polluted thus necessitating that snow remover’s carry environmental pollution polices as this is an exclusion to a commercial general liability policy. Waterways have gotten a lot of attention but little research has been done regarding pollution of soil where snow is discarded and this may end up being an area ripe for pollution and litigation as well. While snow melting with various methods may not be as cost effective it may prove to be a better option in the long run.
Additionally, scientific research has shown that even older substances like road salt can disrupt circadian rhythms and destroy nearby aquatic ecosystems as well as raise the risk of many diseases. https://www.scientificamerican.com/article/can-road-salt-and-other-pollutants-disrupt-our-circadian-rhythms/
Gritting used to be a common practice on roads but is used less frequently due to environmental concerns and rusting of roadway infrastructure such as bridges. It is still used in clearing airports and runaways and sometimes in extreme temperature. This product could also lead to damages to cars and other vehicles from rusting if snow debris is pushed next to the car in lots or it is sprayed with a snow blower leading to a property damage claim. Salt water brine is sometimes used which is collected from conventional oil wells. It is thought that filtering the brine to a level comparable to safe drinking water with the exception of the salts in the water is safe; but the issue has not been adequately researched to be an established fact. Additionally, residue from other matter on the ground is swept up along with the snow and dumped which can cause pollution on its own.

As an additional precautionary note here, is that the Guidelines for the Selection of Snow and Ice Control Materials Section 3.10 prepared by Levelton Consultants, Ltd. for the National Cooperative Highway Research Program suggest that chemicals for deicing may be hazardous while in storage and during use and have a variety of toxicity attributes set out therein in Table 3-13 which may affect human health through ingestion, inhalation and dermal contract depending on the dosage and the particular concentration of the mixture in use. Litigation in environmental pollution is growing in all construction related industries and this may be one of the next targeted areas in pollution litigation.

3. New regulations are effecting liability issues as well.

The EPA has issued guidelines regarding collecting run off water from snow at airports, roadways and major establishments. Many states have issued guidelines as well. https://stormwater.pca.state.mn.us/index.php/environmental_impacts_of_road_salt_and_other_deicing_chemicals Deciding which chemical to use in the deicing process often depends on cost and environmental impact. Chloride ions in chemicals seem to be the major factor in deicing issues effecting waterways. Ethylene Glycol is also used in deicing airport runways. It is also being researched in regard to human toxicity from inhalation and dermal contact. Salt water brine from conventional well drilling is also being researched as an environmental hazard as it is used as a deicers. See ACRP Fact Sheet: Deicing Practices.

4. New Accreditation and Training.

As noted, most states in America require that snow removal operators have a commercial driver’s license and a business license. Although special education is not required it is available and snow removers can receive training accreditation through the Accredited Snow Contractors Association (ASCA) or the Snow and Ice Management Association (SIMA) and completion of an independent audit. To earn the designation you must comply with Industry Standards which are internationally accepted. When accredited you will have an ISO 9001 Certification SN 9001. Both of these entities proactively support the snow removal industry. Snowmagazineonline is also dedicated to this industry.
In a lawsuit, accreditation can be used in your defense to shore up credibility and adherence to professional standards. Some insurers may discount your rates when you are accredited.

5. New Safety Requirements for Employees Criteria

If you have employees you are required to carry workers compensation in most all states. But there are other considerations in regard to employee health. See the tips for Winter Storm: Plan Equip Train, US with suggestions for employees exposed to severe weather. https://www.osha.gov/dts/weather/winter_weather/hazards_precautions.html. Employers have a duty of care to employers and can be investigated and fined for workplace injuries and accidents.
If you are removing snow from buildings/ roofs fall hazards must be addressed specifically as well as slip and falls on the ice or snow on the ground. Training should be given on use of dangerous equipment and supervision of new or untrained employees. Particular attention should be paid to the snow load on any job and necessary precautions. A well designed training and safety plan can save you money on your worker’s compensation premiums.
You may also want to consider options that can protect your bottom line such as Income Stabilization coverage in the event of a mild winter in some areas or data entry and technology insurance to protect your records.
Finally, recent Legislation in Illinois and other states has been enacted seeking to limit snow contractor’s liability unless prefaced on their direct actions and fault. States vary as to whether they hold snow contractors directly liable for 3rd party injuries. This should result in less litigation but more efforts will be made to show the contractor’s action or omission as the cause of an injury in order to place liability on the contractor rather than the owner or landlord of the property in law suits that are filed.

All of these changes may mean that you need to reexamine your insurance needs, talk with your insurance agent or broker and obtain advice regarding your liability in the state you work in.

Travel Insurance needs and more for the 2018 Olympic Games

This year marks the XXIII Winter Olympic Games which is set in Pyeongchang,  South Korea, in a picturesque setting in the Taebaek Mountains. The Taebaekan National Park is home to the enchanting and ethereal Snow Festival which coincides with the Olympic Games this year. If you are attending the Olympics or just planning a trip, travel insurance may be perfect fit for you.

If you are travelling to the Olympics in South Korea, it is a good idea to purchase travel insurance for you and your family.

Photo courtesy of pixabay.com via:   https://cdn.pixabay.com/photo/2016/11/04/13/52/south-korea-1797828_960-720.jpg

Different types of travel insurance protects you for many things and you need to be aware of the different types and the nuances of coverage for each type. Travel insurance can cover, accidents, illness, and medical emergencies, missed flights, and canceled tours, lost luggage, theft, terrorism, travel company bankruptcies, emergency evacuations and transporting your body home in the event of death depending on a number of factors.    See:  http://Travel Insurance Tips by Rick Steves’ Europe

But there are precautions you need to take before you purchase any certain policy. First of all you have a duty to read any insurance policy and it is in your best interest to thoroughly understand it and ask pointed questions about wording that you don’t understand or that is vague.  You want to be sure that you have comprehensive insurance which cover all possibilities; or if you choose a policy with exclusions, you buy supplements to cover the exclusions or have other options for anticipated occurrences or they are not applicable. For instance, if you don’t intend to participate in sports you don’t need sports coverage.

Trip cancellation and trip interruption are some of the primary reasons for buying travel insurance.  Unfortunately life happens and in many instances if you or one of your party have to cancel it is generally covered.  That may not be the case if the airline goes bankrupt or out of business. This is not standard coverage according to the Daily Mail.

Actually, in this instance you need either Scheduled Airline Failure Insurance or End Supplier Failure insurance which covers you in the event any provider or service you are using, e.g. a hotel, goes out of business or bankrupt.

Another issue can arise if your relying on your health insurance to cover your medical expense for any illness you might experience while traveling so do not take this issue for granted.   Your own health insurance may provide some coverage while out of the county but Medicare generally does not. If that is the case then your Medicare supplement will not usually  cover any expenses but if you have a Medigap policy instead it could.  Your insurance carrier may require pre-notification and authorization before you travel out of the country. Be sure to check with your travel or insurance agent to see if you need a specific travel health plan and what it covers.

Even if you do have cover you may want medical travel insurance to cover anything including deductibles which are not covered by your plan. Also If you have a preexisting illness it may be covered under your trip cancellation insurance if you listed it as a known condition. Be aware that if you or another member of your party has in the past or is presently experiencing mental health issues, they may be denied coverage for health and travel by some carriers so be sure to shop for carriers who do not exclude this group.

Sporting equipment is a very odd item in regard to coverage.   Standard travel insurance covers the items while in transit (similar to Marine Inland); or if the equipment is lost or stolen in some instances, but;   If you are irresponsible and just leave your items accidentally, chances are the loss of the equipment will not be covered.  Additionally, if you leave your items with a stranger you most certainly will not be covered. Also, if you rent a car and leave the equipment where it can be seen in plain sight it will not be covered, but should be if concealed appropriately.  Another exception applies if you check or stow the equipment with an operator of a mode of transport, for example a tour bus or train; your travel insurance may not cover it but the operator of the transport should.

While attending the games you will probably want to use snow related sporting goods so you need to be covered if you are using your own equipment. (Rental insurance usually covers any hazard incurred while using the equipment) While many countries are being inundated with snow and some mountainous areas including the Alps are being blasted by record snowfall, blizzards and possible avalanches this area of South Korea has not receive as much snow since December.

Although South Korea does experience large snowfall events, very cold temperatures and earthquakes it has not had record snowfall this year. However, the ski resorts in the area use snow manufacturing equipment and groom the snow meticulously to prepare for snow related sports and activities so you should be able to enjoy these activities at your leisure depending on the Olympic schedule.

Be aware that simple travel insurance generally and almost universally excludes almost all use of the item for the sport it was intended to be used for.  In other words travel insurance will not cover any damage to your equipment while skiing, snowboarding or other snow related activity unless you supplement it with snow sports coverage. Another very common exclusion is the alcohol exclusion rule which prohibits recovery for accidents while you are drinking.

There are many reasons for having other types of travel insurance in place this particular year.  Regardless of your politics, travel can expose you to dangers you would not normally encounter.  South Korea is of course geographically close to North Korea.  Tensions were high between South Korea and North Korea and Russia as well due to restriction on Russian athlete’s participation, but tensions appear to be lessened between the two Korean countries and Russia after joint participation agreements were reached and invitations were sent promoting participation in the games.  Thus, everyone earnestly hopes for a peaceful and tranquil period during the games.  But there are still other nations with reasons for causing turmoil, , or you may just prefer to be cautious, so terrorism, kidnapping, war & armed conflicts insurance are options you really want to consider. These are generally exclusions from travel so you would need separate coverage.

It is very important to check the U.S. Depart of State for travel warnings regarding Korea.  If one is issued your travel insurance and health insurance may not be honored.

In any event Insurance should be given consideration whether traveling to Korea or anywhere in the world.  Nationwide, Progressive and Travelers are some of the larger carriers which provide travel insurance. See www.progressive.com/travel

Many others carriers offer this insurance as well.

 

Carpet Cleaning

Upholstery and carpet cleaning: Insurance challenges in water remediation and storm damage cleanup

Cleaning carpet and upholstery, while unpleasant at times, is generally a safe business activity for both the owner of the business and the employees of the carpet cleaning business. Some personal safety considerations exist while on a job site, and injuries do occur, but it is not a routinely dangerous or risky type of work.  However, this factor can significantly change when companies engage in water related disaster remediation and storm cleanup. This occupational field is fraught with insurance land mines which could leave you little or no coverage.

Upholstry and Carpet Cleaning Businesses need insurance.

The risk for an upholstery and carpet cleaning business engaging in storm cleanup is heightened for several reasons:

  • Workers are subjected to numerous dangerous conditions while doing cleanup which results in higher workers comp premiums for the business.
  • The property owner may not be covered under their insurance due to pollution exclusions for Category 3 Water damages related to flooding and storm damage which may make them incapable of paying for the cleanup;
  • Workers are dealing with the emotional turmoil experienced by their clients who are already suffering horrific losses from flood and water damage which can be compounded by lack of insurance coverage due to exclusions.
  • Your commercial general liability or business owner’s policy has absolute pollution exclusion which may nullify your general liability coverage.

Storm cleanup can lead to exposure to many toxins and environmental pollutants, including parasites, pesticides, sewage, fungi, bacteria, mud, sludge, toxic chemicals, residue, animal and human bodies, body parts, mold, mildew, rot and, of course; contaminated sea, ground and flood waters from oceans, rivers and lakes.  Additionally, workers can be exposed to rodents, reptiles and animals in the water that all carry diseases transmitted by biting or injecting venom, causing injury and sometimes death.  Employees can also be traumatized by these experiences. This environment leaves the employees in the direct path to acquire related illnesses and injuries.  This factor can influence the rate of workers compensation premium that the business will have to pay in the future and raises the costs for protective equipment that needs to be provided for the health and safety of the employees.  See OSHA Fact Sheets for safety measures to protect employees during water remediation work.

Not only the employees’ health may be affected, but the company’s financial health can be impacted when undertaking storm cleanup or remediation even when it pertains to just floors and upholstered furniture if there is or has been exposure to flood waters. Flood or storm water is by definition Category 3 water previously referred to as black water which is automatically defined as a pollutant.  The company’s Commercial General Liability policy undoubtedly contains numerous exclusions related to Class 3 water, mold and other pollutants. These are pollution exclusions.

Homeowners have policy exclusions for pollutants as well. They may affect the property owner’s coverage for any water damage especially if mold is present, unless they have purchase additional coverage by endorsements which covers the exclusions. You should verify coverage with the Homeowners insurance carrier if you are depending on them for payment for your services.

As a result of the exclusions for both parties, insurance coverage for this occupation is rife with issues and problems for the business owner.  In order to adequately protect the business three areas must be carefully covered.

 

First, all business insurance is categorized by class codes for general liability, standard industry classification and/or workers compensation.  All of these codes for a standard carpet and upholstery cleaning business change when a company performs storm cleanup and water remediation activities and falls under different class codes. So if your business undertakes water remediation as a new business activity you will need to add additional coverage for these activities by class codes or they may otherwise be excluded. If you proceed without changing your class codes you and you employees may not be covered for any water remediation jobs, so this is a critically necessary step. Many insurer do not cover water remediation firms at all and if you have not clear indicated you are doing that type of work, the carrier may not have to cover you.

Next you should determine what type of pollution exclusions are in your general liability policy, e.g. mold, fungus or bacteria that might prevent coverage. You may encounter any number of pollutants while performing storm water remediation.

Third, after examining your policy, you may need to obtain one or several more types of coverage for items that are excluded. In the past it was extremely difficult to obtain comprehensive coverage for remediation contractors.  Contractor’s pollution liability was thought to be the answer, but the mold exclusion became a huge issue prior to 2006 which could void your entire CGL policy and any contractor’s pollution policy.  See General Liability Insurance & Mold. April, 2008 http://www.restorationindustry.org for an in-depth history.

Refinements were made continuously to contractor’s liability policies and in today’s market CPL’s, together with endorsements are available covering most pollutants but it is up to you and your agent to ensure you purchase coverage for all conceivable risks.  Endorsements are generally available on a claims made or completed operations basis.  Additionally. In order to perform water remediation your business should comply with the ANSI/IICRC S 500 and S 520. Standards for Water Restoration to protect yourself from Professional Liability and purchase insurance covering that risk.

Water remediation is a very complex field and protection from liability is absolutely vital.  Before undertaking this venture be sure you have researched your insurance options carefully. Other material which may be helpful are: 1.  Mold Risk Management by Restoration Contractors http://www.armr.net  2. Contractor’s Pollution Liability Update;  and 3.. Environmental Insurance: Just the Facts,http://www.irmi.com.

 

Common Flooring Contractors Business Liability Classification Codes

SIC Business Insurance Codes:

  • 1752: Floor Laying And Other Floor Work
  • 3253: Tile Floor Installers
  • 2273: Carpet Installation
  • 3996: Linoleum and Hard Surface Installation

NAICS Liability Classifications:

  • 238330: Flooring Contractors

Business ISO General Liability:

  • 91341: Interior Carpentry
  • 94569: Floor Covering Installation—Not Ceramic, Tile or Stone
Common Workers Compensation Class Codes:
  • 5478: Carpet, Linoleum, Vinyl Installation
  • 5438: Tile Floor Installation
  • 5437: Hardwood Floor Installation and Refinishing
  • 5645: Residential Construction
  • 5651: Commercial Carpentry
  • 5436: California—Hardwood Floor Installation

 

 

 

Image Credit: Pixabay.com, CCO Creative Commons: No attribution required.

Water Pollution Insurance

An ominous exclusion to commercial general liability insurance

Water is essential to life and no human can survive without it. However, Water Pollution abounds making clean water a rare commodity throughout the world although America is considered a water rich country compared to many other countries.  Unfortunately, stewardship of this precious resource has not always been successful in the United States. Even though knowledge is gained exponentially as more research is conducted, more people become aware of the issue and more efforts are aimed at protecting water.  Yet Water Pollution still occurs every day in the business world. This is not an exaggeration.

Water Pollution is not limited to major industry and manufacturing.

Even SMB’s  have wastes that eventually reach the water.  Beauty shops use chemicals dyes and bleaches which end up in the sewer system.  Day cares use diapers, bleach, wipes and pharmaceuticals. Schools use bleaches, pesticides and cleaning products, Family farmers, as well as farming conglomerates, use fertilizer, feed, herbicides and pesticide. Farm animals give off waste which result in methane and pollutants in the water. Auto repairs, lawn mowing, painting all use products with pollutants which seep into our land and waters.  Additional pollution comes from bacteria in the water.  The list goes on and on. Essentially “…water and air have become global garbage cans” Jacques Yves Cousteau.

Water Pollution along a beach.

Water Pollution Insurance coverage is  a critically necessary to protect many businesses from liability and loss of their assets.

Water Pollution is a form of environmental pollution, which is often excluded from commercial general liability insurance in present day.  Prior to 1980, comprehensive general liability did include environmental pollution liability in some states.  It is entirely possible to have a claim brought for environmental pollution and find that an older general liability policies may still cover the event where the pollution has been ongoing over a lengthy period of time. (This is a very complex issue under insurance law which is beyond the scope of this article and consultation with a qualified attorney is advisable if you find yourself embroiled in a lawsuit or you have been notified of a claim).

Businesses and government usually want to protect their employees, their clients, their community and ultimately the end consumers of water. But businesses, local governments and the federal government make mistakes which affect everyone in the immediate area.  For instance think of the water pollution issues arising in Flint, Michigan when the city sought a cheaper water resource and did not explore the risks beforehand.

All sorts of circumstances can arise where businesses pollute the water unknowingly, or were unaware of the health consequences; or even polluted knowingly but did not have the information, resources or ability to prevent the pollution.  This scenario is all to plausible when any business is seeking to reign in costs.So what can you do to protect your business and assets from liability for pollution if you are in a precarious position or just want to help?

Businesses should ask the following questions before making business or financial decisions which may negatively affect clean water.

  1. What possible impact does my particular business have on pollution of the waterway? (Assess you specific situation).
  • What products to do you use which contain pollutants?
  • How do you dispose of your pollutants?
  • Is the disposal process environmentally safe?
  • Are any of the byproducts carcinogens, endocrine disputing compounds, heavy metals or toxins?
  • Are my employees adversely affected by exposure to these toxins?
  1. How can I stop pollution or at least reduce my impact? Suggestions are:
  • Recycle office and industrial byproducts when possible
  • Prevent runoff of wastewater contaminated by industrial pollutants
  • Use water efficient processes where possible in the office. For example low flow toilets and automatic sinks for employees
  • Use water efficient processes and water purification in your day to day operations.
  • Do not dump untreated toxic substances produced as a result of your business processes into any water source
  • Prevent chemical leaks and spills
  • Ensure sewage is treated or and sent to the proper facility for  sanitation
  • Work with your agent, carrier and risk management to establish safety plans

These are but a few ideas you can implement.  Research your specific industry for available solutions, filtration systems, less toxic alternatives and products you can use to cleanse and decontaminate waters used in your business processes.  Some online resources are: National Institute of Environmental Health Sciences, www.nies.nih.gov., Water Research Foundation, www.water.org, Water Online, www.wateronline.com and Pollution Online, www.pollutiononline.com.  Also see and ISO 14001: 2004 & 20015.

If environmental pollution is excluded under your policy, which is very likely, your options are standalone policies, supplements and endorsements to your general liability policy or your business owner’s package.  Your agent may have to obtain a policy from a specialty broker, e.g. Lloyd’s. Environmental pollution insurance has many nuances and one type does not fit all.   Business owners need to be sure that you  obtain the insurance you need to cover specific situations;for example, run off of waste water versus pouring chemicals into a river or waterway. Either or both can be excluded depending on the verbiage of your individual policy.

Proactive steps to obtain water pollution insurance may benefit your business

Additionally, you may receive tangible  benefit from taking proactive steps such as receiving discounts and rate decreases from your carrier when you implement Water Pollution controls and safeguards which protect your employees and the public. Positive accolades, public support and recognition often follow proactive actions which can be used for marketing programs.

This blog post is not intended to be or to convey legal advice. All material and information have been created for general insurance informational purposes only, and should not be acted upon or accepted as legal advice and is not a substitute for obtaining legal advice from an attorney of your choosing.

Image Credit.  Google Images: JPEG Image used under an Advance Search license free to share for commercial usage.

Retails Sales:

Supply chains and logistics failures. How contingent business income interruption insurance coverage can help cover your loss.

The busiest sales season of the year is fast approaching for retail sales.   If store based retailers don’t have sought after products to sell, buyers are unhappy and leave; or they just order online and have it delivered. Unfortunately, they are not buying merchandise from you if you don’t have what they want. So here you are depending on your supply chains and their ability to manage logistics successfully which includes timely delivery of merchandise to you.  But what if those companies fail to deliver?  Well, you can wait for another type of delivery.

Contingent business income interruption insurance

 

But chance are slim that the goods will arrive in time and you will most likely loose sales.

However, as a realistic alternative, you could purchase a type of little known insurance.  You would think it might be called supply chain failure insurance but it isn’t.  It is called contingent business interruption insurance, or CBI which is “an extension to other insurance that reimburses lost profits and extra expenses resulting from an interruption of business at the premises of a customer or supplier.” See https://www.irm.com/articles/expert-commentary/contingent-business-interuption-gettingallthefacts

Usually commercial general liability and business property insurance are the basic types of insurance a business needs along with workers compensation if the business has employees and inland marine coverage if they have specialized equipment.  There are also various types of additional insurance coverage, usually added by endorsements, which may be appropriate for your business depending on your specific situation. Two of the available endorsements are business income interruption and contingent business interruption.

Business income interruption insurance is a type of insurance which is not covered by CGL or business property. So an ISO endorsement is needed to cover the loss specifically.  This type of insurance covers a direct loss of income at your business location and it can be part of a Business Owners Policy or Commercial Package, if designed in that manner. There are conditions which must be meant for this coverage to kick in, which depend on the loss being directly to the insured’s property and actually sustained. Therefore, a loss which does not impact the insured’s owned property is not covered.

But contingent business income interruption insurance can cover your losses due to a supply chain failure.

 

This is a separate and distinct endorsement which only applies when the insured is not the owner of the property which suffers the actual physical loss.   It specifically applies if the business supply chain is disrupted and income is lost by the insured due to the supplier’s failure to deliver for various reasons such as cargo theft, equipment failure, plant shutdown, cyber-attack or weather-related disasters.  A direct business income interruption endorsement will not cover you in this instance.  These two types are mutually exclusive and only one can actually apply in any given situation.

In older policies and some current policies, insureds had to purchase both primary direct business interruption insurance and a second specific endorsement for contingent business income interruption insurance using the proper ISO form. The insured business had to have the underlying endorsement for direct business loss of income and the amounts specified in the original direct loss endorsement determined what amount your indirect loss limits were. https://marsh.com/insights/research/business-insurance.html.

But in present times, some carriers, including the Hartford, automatically provide standard loss of business income (BI)  in their BOP with a host of additional endorsements available, specifically including Business Income for Dependent Properties (or CBI) in available options,  as well as many others. See: https://www.thehartford.com/business-income-insurance.

As dependence on supply chains evolve, claims have become more frequent. Documentation to verify the loss of income has become crucial to a successful claim.  Algebraic formulas have been developed to calculate loss and are adjusted to take into account seasonality for retail businesses.   http://www.air-worldwide.com/Blog/Supply-Chain-101–Breaking-Down-Contingent-Business-Interruption/

Businesses should be proactive before selecting a supply chain provider and be prepared for any loss.

Ask your supplier these questions before entering into a business relationship:

  • Does your supplier have a contingency plan to deal with natural and man-made disasters which interfere with delivery of goods on time?
  • Does your supplier have marine inland which will protect goods in transit and if so ask for a Certificate of Insurance and to be named as an additional insured on their policy? ( This will forestall any policy interpretation that CBI coverage is not applicable because it did not occur at the supplier’s place of business. This issue may not arise as arguably a business conducting a supply chain owns the transportation vehicle and it is the supplier’s property.  But it never hurts to be doubly insured.)
  • Ask for a Certificate of Insurance for the supply chains general commercial liability policy.
  • Does your supplier have logistics management error and omissions liability policy? If so, also obtain a Certificate of Insurance.
  • Does your supplier have cyber risk insurance which covers third party losses from business interruption if the supplier is shut down due to a cyber-attack? If so, ask for Certificate of Insurance and to be named as an additional insured.

In closing it is always a good practice to establish a good working relationship with your key suppliers and engage in any working supply chain group to solve problems both  before and after they occur.

Image Credit:  Pixabay CCO Creative Commons free for commercial use.

3D Jewelry Printing

3D Jewelry Printing Revolution can cause general liability insurance changes

 

Jewelry making has always been a time honored tradition requiring skilled artisans to create exquisite jewelry pieces.  These pieces  are sold in jewelry shops, boutiques, antique shops and galleries offering these tiny works of art.  Many jewelers have their own shops and sell their own custom designs. Alternately, originals and reproductions are sold in retail stores throughout the country on consignment; after purchasing directly from the artisan, or by obtaining copyright permission from the master artisan who designed and created the piece to mass produce it.

3D jewelry printing

In modern day many crafters also create jewelry on a smaller scale and sell it directly at art festivals, crafter’s markets, flea markets, mail orders and other means of distribution. In short jewelry sales in all its various forms is BIG BUSINESS.   Jewelry sales in 2014 exceeded $68 billion dollars according to the 2014 US Jewelry Market Report.

3D jewelry printing will revolutionize the jewelry making business.

3D printing will have a compound effect upon the industry as new methods will require different types of insurance to protect the artisans who make and sell jewelry. 3 D jewelry printing is actually one (1) form of seven (7) categories of additive manufacturing. This process allows artisans to create an original piece of jewelry using  additive manufacturing  and replicate the jewelry in mass. Jewelry makers will no longer be required to design each original piece using traditional lapidary and hand tools to chisel and polish gem stones and settings. Instead they can use 3D jewelry printing.

Additive manufacturing (ADM) methods used to make jewelry differ. There are several viable options.  American Pearl has built the “Jewelry Replicator” which can duplicate any piece of jewelry or create jewelry pieces from a photo or a drawing. As a result antique jewelry can be recreated when a piece is lost or broken beyond repair. 3D photo files can be created using software designed for jewelers such as “Rhinogold” to control the printer and design the actual jewelry.  Jewelry made with rare metals and jewel can be created using a combination of techniques based on the jeweler’s preference.

3D Printers, other related equipment and the components for making the jewelry in house using ADM must be put in place; which means an initial investment in the equipment, supplies and chemicals used in the process.  These items may be a great deal more expensive than traditional hand tools used in the past, but can be offset by the reduction in amount of time it takes to make the piece or pieces.  Or, jewelers have the option of sending a 3D software file to an outside printing service to print the jewelry piece rather than purchasing the printing equipment.

Ultimately, after the jewelry making process is chosen and the machinery and equipment are in place to replicate the jewelry, it may radically reduce the cost of producing the jewelry.  The ability to reproduce from a drawing or photo may diminish the need for galleries and show rooms and cause the retail value of some types of jewelry to fall as the supply of the product will increase.

On the other hand, it should lessen the costs of producing, copying and distributing the jewelry which will mean a bigger profit for the maker and seller.

Insurance coverage for Retail Jewelry Stores will need to be expanded.

Types of insurance which are available for Jewelers are:

  • Jewelers Standard policy
  • Jewelers Block Policy
  • Business Owners package designed for jewelers
  • Commercial Insurance Package designed for jewelers.

All of the above can be customized to fit the needs of any particular jewelry business.

Retail jewelry stores generally need the same types of insurance as any other business including general liability, worker’s compensation and standard business property coverage.

Jeweler’s also need property coverage for their building, fixtures, tools, equipment, molds, designs and original art work used to design jewelry. Other recommended  insurance riders or supplements include, marine inland, Bailee’s insurance, and employer’s liability.

A jeweler’s property insurance must  cover raw inventory, including stones, rare jewels, gold, copper, silver and other types of metal and elements used in jewelry making and design as well. Most of these coverage needs will not need to change due to additive manufacturing.

Insurance needs will change for:

  • general liability for new processes
  •  new  types of equipment,
  •  products and environmental liability,
  •  and, workers compensation.

Retail sales of jewelry are insured for general liability pursuant to the Class Codes depending on which of the 4 general classification codes are used to obtain a quote.   For example. if using NAICS,  retail  jewelers fall under the Industry Group 44813 and the basic NAICS class code for a jewelry store is NAICS 448310. However, if the store is considered a department store that sells a wide array of products, including jewelry it could be classified differently, but it is unlikely that a department store will engage in replicating 3D jewelry.

General liability  policies for retail jewelry sales should fall under this class code (or similar code) for jewelry making, But the additional class code for additive manufacturing will be come applicable for 3D jewelry printing services. So the general liability policy would need to be amended to add this code.

It is critical to  your coverage that any needed class codes be added as you are adding new tasks which may not be covered at all under jewelry sales.

As 3D printers were not historically used as equipment, jewelers will have to add coverage for a commercial 3D printer including coverage for repair or replacement and may need to increase or add loss of income if the machine is down for a stretch of time. Jewelers may also need insurance for loss of production when electrical outages occur. Increases to the amount of  coverage for fire may be needed due to the technical requirements of the printer and the temperature reached during the process.

While there is little certainty about the future of products liability litigation regarding 3D jewelry printing in general, liability may arise. http://www.industryweek.com/emerging-technologies/3D-printing-and-its-uncertain-products-liability-landscape. Thus, it is prudent to explore what options are available through your agent to protect you from a products liability claim in case a client suffers injury directly from a product you created or from exposure to a component used in the 3D process.

Workers compensation insurance codes may need to be added to your policy as workers may be exposed to new risks during the 3D process. Byproducts of plastic and metal powders used in the additive process may also be an environmental pollutant and  a workers compensation risk which may raise premium cost and increase your risk for pollution liability.  Pollution is generally an exclusion under a general liability policy so you do need to examine you policy to determine if excluded, and determine options to obtain pollution coverage.  The best way to address rising premium  costs is to implement a safety plan for the business designed to combat these concerns and protect your worker’s health.  The plan should also address disposal of byproducts and chemicals.  See: http://www.lawnandlandscape.com/article/ll-071317-insurance-safety/

It may be necessary to protect 3D jewelry printing software files  by  adding  or increasing cyber liability insurance.  Patents, trademarks and copyright insurance should be added or enhanced especially if you are replicating jewelry produced by another artisan, or in case someone steals your designs electronically.

Thoughtful examination of your insurance policies will set you on the path to a successful and profitable 3D jewelry printing venture.

Image credit: Pixabay.com, used under Creative Commons CCO, permission from artist or attribution not needed for any purpose.

Shooting for Optimal Commercial Insurance!

Gun Clubs or Shooting Ranges have many similarities, but are really two very different types of facilities. A gun club is usually operated by the membership which pays dues or fees to belong, while a shooting range is operated by the business owner or a group of investors/owners who operate the business. Shooting ranges are usually run for a profit and have business customers, while gun clubs may or may not be for-profit. Gun clubs have members and guests, not clients.

General Liability Class Codes - Find the best info about insurance for Gun Clubs and Shooting Ranges at https://www.generalliabilityclasscodes.com/

Assuming that you operate a shooting range for commercial purposes or you are getting ready to start such a business, you are going to need excellent gun club and shooting range insurance that will protect you and your customers from many perils.

First, shooing ranges have the same insurance needs as most businesses including commercial general liability, and workers compensation if you have employees.  Usually these two types of insurance are fundamental for business owners as they are required by law in most states.

Second, you need property insurance to cover damages and repairs to all types of property which the business uses to operate.  You should start by making a list of all commercial property that your business owns, similar to an inventory and include all types of property: e.g.

  1. Real estate,
  2. Buildings and their fixtures,
  3. Office furniture and decorative pieces.
  4. Automobiles, trucks, golf carts, tractors and lawn tractors and any other type of moving vehicles you use to care for the premises or in the business operations
  5. Guns and ammo, gun cleaning equipment, and gunsmiths equipment
  6. All other business equipment for instance: gloves, ear protection, protective glasses, archery
  7. Equipment, or any other related items whether you furnish it rent it or sell it.
  8. Signage not attached to the building needs to be specifically included by a supplement or endorsement.
  9. Books of Account, computer hardware and software,

Depending upon how much and what types of equipment your business owns and operates, you may need an additional inland marine policy.  Along with property coverage you should consider coverage for loss of the data, should a power or equipment failure damage the data or information stored, and additional protection from a security breach or cyber-attack to cover resulting costs for loss of income during an outage, expenses to make notification to those who privacy has been breached and damages to clients privacy.

Other items owned  by the business will depend on what items you offer for sale such as food, drinks, alcoholic beverages, gun supplies, etc.  If you sell food you might need lots of other equipment’s such as cooler, coffee pots, stoves, refrigerator etc.  You may need a rider or supplement for refrigeration as this is a common exclusion on many property policies.

The key factor when purchasing insurance is to make sure the gun clubs shooting ranges obtain coverage for all property.

Shooting ranges should carry  a combination of stand-alone and supplemental policies or a comprehensive business owner’s package with endorsements.

Next you need to consider what liability your business could incur from the operations of a shooting range. First of all you need liability for the use of any type of firearm or other types of sport like archery or clay/skeet.  If your business offers instruction or classes in shooting you will need liability coverage and errors and omissions.   You will need first and third party liability for these matters. You may also participate in competitive shooting and other events which will require event coverage or firearm related events coverage.  If you decide to sell beer or alcohol you will need liquor liability specifically which will usually be an additional endorsement.

You may determine that you want to provide on premises gun repair and, or gunsmith services. In that case you will need products liability and errors and omission or alternately gunsmith insurance which specifically includes these types.  You will need Marine Inland or Bailee’s insurance if you store clients’ guns or keep them while you repair the item.  You will also want to include Crime Coverage to cover theft of your property or you clients by employees if your property insurance does not specifically cover it.

Shooting ranges may have special insurance needs when nearby residential property or businesses expand until they are closely located to your business.  Neighbors and persons who are affected by your activities can sue for nuisance such as noise, pollution, and violation of regulatory and environmental laws and in particular pollution.

Lead pollution is a very serious environmental pollution concern for shooting ranges.

People in close proximity to the lead, which is contained in the bullets and the dust from the bullets when it hits the target, can suffer severe injury especially children.  Lead pollution can cause contamination of adjoining properties and waters downstream from you. Lead exposure can lead to injuries to citizens and clients arising from the exposure to the dust and the bullets, as well as employees being injured by exposure.  An environmental insurance policy or endorsement is an absolute necessity to battle litigation, fees and fines from regulatory and government agencies.  In order to minimize some of your costs you will want to have a safety plan which includes having your ventilation systems monitored, cleaned, maintained and insured as well as your environmental policy.  Your employees should take every safety precaution available while cleaning the facility to shield themselves from exposure to the lead dust. Employees are required to have their lead levels monitored by OSHA periodically, which can lead to warnings, fines, medical expenses, remedial action and closure of the business temporarily.

So if you want a bang up insurance policy  covering all your needs do some homework, meet with your agent, ask lots of questions and make sure the policy you purchase is right for you.

Automobile Repair Shops:

Ways to keep your Automobile Shop running like “Greased lightning”

Automobile repair shops are one of the most needed and highly utilized businesses in the car loving culture of America.  Despite the vast popularity of cars, the repair industry has a somewhat tarnished image.  So why do people who love cars or those who just really need a car for transportation have a negative viewpoint about automobile repair shops?

People often feel that they were mistreated and/or deceived,treated rudely, charged unfair prices; or faulty workmanship was performed. They then tend to label the whole industry as bad.  Likewise, repair shops experience all varieties of customers and are subjected to rudeness theft, fraud, disloyal clients who purchase a cheaper product from a competitor while asking you for your advice, and other unpleasant situations.    Unfortunately, this is reality in the car repair business.

Automobile Repair Shop

There are numerous types of automobile repair shops in the industry ranging from one owner with just a few employees to chains stores that feature oil changes and minor repairs to full service garages and huge dealerships. There is no one right formula for success for all.  This article focuses on general auto repair shops which provide a wide range of repairs to the public. Of course customers are vital to the industry, and you are codependent on customers just as they are on you.  What steps can you take to establish or improve the public perception regarding this symbiotic relationship?

People just really want to be treated fairly.  And they want to have their “baby” looking and running like greased lightning.  For non-musical car lovers “Greased Lightning” was the white 1948 Ford Deluxe convertible hot rod emblazoned with shooting silver and gold flames on the fenders which conveyed the image of being fast as lightning in the musical “Grease.” This car became an icon in the movie industry and to the public. It was known as a “chic magnet” by the members of the T-Birds gang led by Danny Zuko (John Travolta) in his famous portrayal of their leader.   “Greased Lightning “was restored in the movie and roared to life after the proper care and attention of the T-Birds and their shop teacher. The rival gang leader drove Hell’s Chariot, a 1949 Mercury, which featured black paint and red shooting flames.  This car was lost for a time after the movie, and later it was also lovingly restored in real life, by its original builder, after setting dormant for many years on the Paramount Lot.

You can take an example from “Grease”  and use the process of restoration to establish or rebuild a favorable image for your automobile repair shop by combining   good old fashioned excellent customer service combined with CYR (Cover your risks). A few suggestions for this are:

Antique automobile repair shop

Set the bar for a pleasant customer experience

  • When a potential client enters, greet and assist them or indicate you will be with them very shortly.
  • Direct them to the waiting area. If you provide coffee or water say so or post the price.
  • Have a play area for kids if possible, with quiet inexpensive activates such as coloring.

Combine aesthetics with customer safety

  • Keep the waiting area in a safe area of the building where no one is exposed to an injury.
  • Keep the public waiting area and restroom clean and visually appealing. Routinely inspect the area for hazards/risks such as puddles on floor and use fall prevention measures.
  • Keep the outside parking lot safe, fix holes in parking lot and sidewalks, provide outdoor  lighting, routinely police the area for broken glass, contraband and contaminants, such as needles, which carry blood borne pathogens.

Learn to appreciate the customer’s input and put it to good use.

  • Ask the client what they feel is the problem, listen and acknowledge their opinion and solicit more information with questions.
  • Explain what else the problem might be and what your procedures are:
  • If you need to run diagnostics tell them upfront whether it’s free or there is a charge and why it needs to be done.
  • Be aware of client’s financial situation: If a client suddenly declines upon learning about the fee, offer them options. (Monetary embarrassment to the customer is a driving factor in their decision making) If they do not have the ability to pay immediately work with them to set a price and a time line for fixing issues one at a time if at all possible. If they cannot proceed immediately due to finances, thank them for their business let them know you will be willing to assist them when they are ready.
  • (Mechanics liens usually prevent the client from being able to simply not pay for your services).  An explanatory brochure on mechanics lien should be available that you can have the customer read.  If they want to proceed having the client sign a contract which says a mechanics lien can be used if they default is s a good risk management practice and puts the client on notice.
  • If you start work on a vehicle and have to revise your estimate let the client know ASAP and get their consent.
  • After service, advise the client of upcoming needed repairs and maintenance. A print out would be great.
  • Be patient with complaints, acknowledge and fix the problem if at all possible.
  • And try to keep calm and carry on!

My Insurance Question - Get the best answers to your Automobile Repair Shop Questions.

 Show off your talent:

  • Display large pictures of cars you have lovingly restored or fixed with their happy owner’s as well as showcasing automotive industry awards and Certificates of Membership from  industry associations which address customer excellence.
  • Display testimonials or thank you letters from clients
  • Use miniature cameras to record your employees work to prevent mistakes and complaints. Then furnish a complimentary picture for the client showing them with their car smiling.

There are many other things you can do to feature your company in a positive light and focus attention on the quality of your work.

At the same time you want to take every step possible to protect your business from any bad apples while also protecting your valued clients and employees with comprehensive insurance coverage.

  • General Auto repair shops are in the business liability category of Automotive Services and Sales.
  • The SIC Business Code would most likely be the General Automotive Repair Shops-7538.
  • The NAICS Liability Classification would be 811111-General Automotive Repair.
  • The ISO General Liability is 10073 Auto Sales, Repair and Service and the Worker’s Compensation Class code is 8380 Auto Repair.

Various types of insurance will be necessary. All automobile repair businesses will  need worker’s compensation which is mandatory if they have employees and do not have the ability to self-insure.

Employers Insurance Company has created this great video about the Workers’ Compensation Insurance needs of Automobile Repair Shops.

You will need General Liability (slips and fall) and business property.  You may want a BOP with the following:  Business income and extra expense, Hired and non-owned auto, Commercial Crime,  and Umbrella.  Be aware that some business property policies do not cover signs which are not attached to the building, so you would need a rider.

Automobile repair shops also need to determine whether they need Garage Liability, or a Garage keeper’s policy. These two types are not identical. They address different needs.  Generally speaking Garage Liability is more useful for a dealership that does auto repairs than a stand-alone auto repair shop.  Many times a dealer will need both garage liability and garage keepers if they do auto repairs.

Garage keeper’s is best for a non dealer auto repair shop which may combine legal liability, direct primary and direct excess for customer’s automobiles.  Commercial General Liability has an exclusion for client’s cars which are in the care, custody and control of an auto repair  shop  including test drives. Garage keepers covers what would be missed under the exclusionary language of the GLC policy and function much like Bailee’s insurance.

If your repairs fleets  of autos for government, large corporations or schools; most of them will require Garage keeper’s with direct primary coverage and a Certificate of Insurance.  Some may require that they be listed as an additional insured.

Cyber insurance is also highly recommended in light of the Payment Card Industry Standards and threat of data breach. You could be liable for the invasion of privacy, notification costs and damages should a customer’s data or identity be stolen.

Other types of insurance worth considering: Employment Related Practices, Moneys and securities, Accounts Receivable, Computers, Goods in transit, Valuable Papers and Records, Employee Benefit, Environmental Impairment and or sewer back up.

With all of the clients concerns and safety addressed and insured you can focus on your main priority. Making cars run like greased lightning!

Concrete Contractors and Silica:

The field of Concrete Construction is extremely complex. This type of construction is subject to the ASTM International Concrete and Construction Standards (The American Section of the International Association for Testing Materials) as well as the American Concrete Institute Standards for Design and Construction.

Each build differs with the type of cement, sand and aggregates used to mix the concrete.  The contractor must consider the moisture content, the strength of the mixture, the chemical reaction abrasion test result, and numerous other factors which go into planning a build. One of those factors is the use of silica in the process of making concrete and removal of silica. This mineral is about to make the job even more complex and  may affect the bottom line due to increased need and costs for insurance coverage which shields you from liability for it’s use.

All concrete contractors need commercial insurance including commercial general liability and worker’s compensation which are required by law in most states. It is important to remember that general liability does not cover all insurance needs. You will also need Commercial Property, Commercial Auto, Inland Marine for tools and equipment and/ or Goods in Transit and Installation.

Additional recommendations not specific to  the installation of concrete, would be Employee Dishonesty, Employee Benefits Liability, Employee Related Practices, Loss of Business Income with Extra Expense, Stop Gap Liability, Umbrella Insurance and Professional Liability for design and installation. You also need Heavy Equipment Insurance if your commercial auto does not cover large vehicles such as a cement mixer truck, dump trucks and other heavy equipment you use.

Specific Industry related recommended insurances would include Contractors E&O, (This is not the same as Professional Liability insurance) E&O covers you when you make a mistake and are negligent during the building process.  Along with E&O you need a custom combination of the three types of insurance below to protect your business from environmental threats.

  • Products Liability
  • Environmental Impairment Liability
  • Pollution Control

The need for these insurance types has come about with the rise in litigation surrounding the construction industry as a whole and regulations  imposed for each specific industry in the field of construction So you may need all of these separately or combined in a BOP depending on what your carrier offers.

Due to health concerns for workers and the public, OSHA recently adopted new rules in regard to airborne (respirable) silica. Silica is one of the varying components contained within the sand, rock and the cement used in the concrete mixture by contractors.   This rule will significantly impact Concrete Contractors. Crystalline silica (SIo2) is the type used to make concrete as opposed to amorphous silica.  All of the 5 types of crystalline silica are listed as known occupational carcinogens by the CDC.  Crystalline silica is hazardous when it is used in construction processes such as blasting, cutting, chipping, drilling and grinding which make the silica “respirable”.  It works much like asbestos which is not hazardous unless disturbed, and then the substance becomes friable. When silica is disturbed by construction processes it becomes “respirable” and workers breathe silica in and it becomes hazardous and can  cause Silicosis and many severe lung related diseases which can be fatal in addition to cancer.

The Insurance and Risk Management Institute (IRMI) has predicted that the litigation surrounding silica will rise and result in increased environmental litigation much like the issues surrounding toxic mold did and points out that as Silica is a known carcinogen while mold is not. Aside from IRMI’s prediction silica seems to be more akin to asbestos than mold in some ways. According to the Department of Labor Construction Workers as a whole have an anticipated death rate of 1.82 as opposed to metal mining where the rate is the highest a 69.51%.  But that figure could be categorically higher for concrete workers ( the study was not broken down to examine different types of construction workers) as their exposure to respirable silica is frequent, due to contact with the components used to make concrete and resulting concrete dust, while it is being mixed, installed, poured, leveled, troweled edged, brushed finished and cut to specifications.  Workers are also exposed to the dust during the removal of old concrete from a construction or demolition site or during remodeling.

As pointed out by IRMI, the growing numbers of silica litigation could cause an exclusion to be carved out by insurance carriers for silica just as one was created in regard to asbestos. So look for an exclusion specifically for silica in your general liability policy to become a reality in the near future throughout the construction industry but particularly in regard to concrete contractors and workers.  Additionally insurance carriers could deny coverage based on the total pollution exclusion if a court finds that silica is a pollutant. It is very likely that silica would be considered a toxin.

Despite these issues, it does not mean that liability coverage will not be available if silica is used during the construction project. It means:

  • Concrete contractor will need to carefully review their existing policies and question your agent whether coverage for silica exposure is specifically excluded or there is a pollutant exclusion. If so,
  • Concrete contractors will have to purchase an endorsement, rider or supplement  that covers silica  either as an environmental hazard or a pollutant and adds coverage in addition to  any exclusion in  their existing CGL policy; or purchase a new BOP designed to cover environmental pollution and  pollutant liability
  • Insurance carriers will want safety plans that comply with specific OSHA regulations and the new silica rule to prevent silica exposure through the use of safety equipment and limiting time of exposure to be part of your everyday operations.
  • Expect higher workers compensation premiums as awareness arises and workers are diagnosed with silicosis or other related diseases.
  • Compliance with OSHA regulations to prevent or minimize exposure will be critical and will hopefully reduce the amount of your premiums.
  • Products liability will be necessary because the concrete mix you are making is actually a product you made or “manufactured” and you would have liability for it; if it is harmful to the public.  You also have liability during the demolition and removal process for old concrete that you encounter as it will become respirable at that point: and you will have liability for any other toxins uncovered during the removal. If you purchase the concrete from an outside source, you may  also still have some liability for using and installing it and recommending it to the client just as asbestos manufactures and installers were liable.

CNA Insurance offers a Subcontractors Errors and Omissions Policy with Pollution Liability which is endorsed by the America Society of Concrete Contractors.  Their Pollution Liability Coverage includes asbestos, mold and respirable dust or Silica. Travelers also offer Contractor’s Edge policies.  Many other carriers have policies that you can purchase additional supplements and endorsements for which can provide for coverage of these hazards for silica and/or other toxins which have exclusion in your CGL policy.

Handyman Insurance Exclusions

Handyman Insurance Exclusions and how to address them.

Read the best information about handyman insurance at myinsurancequestion.com

Handyman services fill a market niche that seems a miracle to some of us who just aren’t handy at all; or those who have reasons why they can’t do certain household projects on their own. If one finds a handyman (or handyman service) that is reliable, reasonable, thorough and knowledgeable; it is a treasured find and people want to keep using their services in the future.   Smart and savvy Handymen or businesses can capitalize on this public sentiment.  One way to build trust with your client base is to be prepared in case something does go wrong by having insurance that covers you, the insured, and the customer who is considered the third party.  Accidents happen inevitably, even when you take all safety precautions possible so you need to be covered for all possibilities that you might incur liability for.

Business Liability Category: Artisan Contractor

SIC Business Insurance Codes:

  •   1521- General Contractor- Single Family Homes
    •   1522- Residential Builders- Other Than Single Family
    •   1799- Special Trade Contractor

NAICS Liability Classifications:

  •   236118- Residential Remodelers
    •   238350- Finish Carpentry Contractor
    •   238990- All Other Specialty Trade Contractors

Business ISO General Liability:

  •   Code: 95625- Handyperson

Common Workers Compensation Class Codes:

  •   5645- Carpentry and Construction- Residential

A handyman business may fall into any of these classifications.

Just as in any other type of construction business, General Commercial liability is your starting point or foundation and is normally required by state law.

Each Commercial General Liability Policy has its own exclusions based on the type of work you specifically perform.

Three exclusions are commonly a part of a Commercial General Liability Policy for construction based industries and handyman businesses These exclusions are of concern and can cause you to lose clients and gain a bad reputation in the community because clients can be left with a financial burden if your insurance does not cover their third party claim based on one of these exclusions listed below:

  • Completed Operation
  • Excluded operations
  • Residential operations

 

Most General Liability policies are considered claims made or completed operations policy.  Completed operations basically means that once a job is done if no claim is filed  while the work is being performed, then  there is no coverage after the jobs completion.  Alternately, in  a claims made insurance policy a claim can be made at any time while a policy is in force and the policy coverage can be retroactive at renewal each year. Completed operations are less expensive than a claims made policy but in the event of an injury to your client, their family or a guest in the home after the job is over, it will be money well spent rather than paying third party claims out of pocket and having an irate client who can affect your bottom line and tarnish your reputation for backing your work. Even when the insurance carrier does not provide coverage due to an exclusion you are still liable for a third party negligence claim judgment if one is entered against you.

Excluded operations is where a specific  type of activity is excluded such as roofing or plumbing and you have contracted for a handy man job repairing one of the excluded activities, thus leaving you with no coverage at all under this policy for this activity.  Again if liability arises, you or the business will usually be liable not the insurance carrier.  If you have such and exclusion you either need to purchase a supplement or have a new BOP policy written which includes this type of activity.

Residential operations  exclusion.  Most handyman jobs historically were for homeowners but that has changed as trades become more specialized and licensing more regulated. So this exclusion specifically means there is no coverage for any work performed on residential property.   So it is baffling why any handyman policy would include such an exclusion, but they do. This exclusion can sneak up on you as the exclusion is sometimes listed in the section under excluded operations which can contain a number of exclusions rather than as a separate exclusion. In actuality it will still preclude  coverage all work or repairs performed on on a residence. If you don not work on residence it will not be relevant.

A diligent handyman owner should thoroughly inspect the GLC policy to determine if there are any references to any exclusion of any sort and make sure you understand the exclusion and what that means to your business.   Sometimes the exclusions   listed in the policy are referenced only by the ISO form number. The ISO form for each exclusion should be specifically attached to your policy.  If not, make sure you obtain a written copy of each  separate exclusion form listed as a  number and examine it until you understand what is excluded before you proceed.

For each exclusion you do not want in place you will need to obtain an endorsement, rider or supplement to cover that liability. Or you can have your whole BOP rewritten, which is advisable if you are entering into a new aspect of construction;  and make sure you inspect the policy after revisions are made and determine that they include everything you want covered versus excluded.

Remember an insurance policy is a contract and you are presumed to have read it before signing.  The Insurance Carrier specifically advises you of this when you enter into a an Insurance contract.

While you are reflecting on the nuances of your policy take the time to consider new products which might be beneficial such as, electronic data/ cyber security/data intelligence plan, or pollutant /environmental endorsement, and/ or drone coverage if you are using the technology in your business.

Taking preventative steps can save you a lot of money in the long run and will help cement your relationships with your clients.