Archive for the ‘construction insurance’ Tag

Before you have work done on your home….   Leave a comment

Might be time to call in a repair man!

Might be time to call in a repair man!

Good morning!  Today we have a very simple recommendation for you to consider before having a contractor come to do work on your home.

Before you have a contractor (any type of contractor) come in to your home to work, you should have them provide you with a current certificate of insurance.  A certificate (example below) will reflect the liability coverages that the contractor is carrying.  Liability coverages pay for injury or damages suffered by another – like yourself – for which the contractor is responsible (liable).  Thus, you will want confirmation that your contractor has the appropriate coverage in place!

What is the appropriate coverage, you ask?  Well, there are a few things to look for on the certificate:

  • General Liabilitythis is a catch-all for many types of injuries and damages.  It covers a broad range of incidents, such as someone (including you!) being injured at your home as a result of the contractor’s work, or the damage that’s done to your home if the contractor does the repairs improperly (important note – it does not cover the correction of the original mistake, but it DOES cover the damage that’s done as a result of the mistake.  The contractor is on the hook to pay for the correction).  Pennsylvania law only requires a contractor to carry $50,000 in coverage, but most good agents will not write a GL policy for less than $300,000 in coverage.
  • Voluntary Property Damagethis is a critical coverage for ALL contractors to carry, and it is OFTEN MISSED by both agents and contractors.  Basically, VPD will pay for damage that results from the contractor taking any of your household items into their “possession” – for example, carrying your TV across the room to do work behind it, and the TV is dropped.  This type of incident is NOT covered under general liability; thus the contractor without it would have to pay this claim out of his own pocket!
  • Workers Compensation – this provides protection for the employees of the contractor if they are injured while working.  Why is this coverage important to you?  If an employee is injured while working at your home, and the contractor doesn’t carry WC coverage, YOU could be on the hook to pay for the employee’s lost wages and medical expenses!  The most common scenario is that the contractor would be required to pay these expenses, but if he does not have the means to do so, they will most likely pursue you next.  Even if you aren’t found to be liable, you will have a claim against your homeowners policy to pay your defense expenses.
  • Generation and policy effective datesWhile reviewing the certificate, be certain to review two items of particular importance – the date the certificate was generated, and the policy effective dates!  Make sure, of course, that the policy is within its effective dates and is not expired.  And make sure the date that the certificate was generated (at the top right hand corner of the certificate) is relatively recent (within the past week or two).  Less scrupulous contractors have been known to pass off older certificates, being fully aware that their coverage has cancelled (due to non-payment, for example).

I hope that this information is helpful to you in protecting your home and your claims record!  Be cautious, and if you have questions after receiving a contractor’s certificate – ask your agent to review it with you!  Until next time, I bid you a fond adieu!

ACORD certificate

Example copy of the most common form of a certificate of insurance

 

 

 

 

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3 coverages you’ve never reviewed (but have to have) – Business Edition   1 comment

business insurance

Sammy says these coverages are no joke!

Hi hi!  I’m back this week to see what we can do to help our local business owner’s out.  Last week we went over some basic insurance annoyances.  This week we are going to take a look at how to avoid some of that pain come claims time!  The three main coverages we are going to review apply to virtually every business – but I’m also going to go over a special one just for contractors & one for restaurant owners!  It’s a busy week!

Employment Practices Liability (EPL) – The first coverage I’m going to dig into is quite possibly the most relevant one for any business owner with employees.  It’s also one that many people never heard of!!   Coverage is going to vary from company to company, but I’ll give you a basic break down – if you have employees, and one of them sues you for wrongful termination, sexual harassment, EEOC violations or discrimination, failure to hire/promote, etc, EPL will cover two things – the cost of defending yourself against the suit, and any settlement or award that’s granted (up to policy limits, of course!).  There are other coverages that can be added (such as making wage or overtime errors, or harassment of a client or vendor), but that’s the general idea!  Even with a lower limit, you can at least hire an attorney to protect you with minimal out of pocket cost.

Employee Dishonesty – While we are on the topic of employees, why not look at it from the other direction?  Let’s say that you have an employee who is stealing money or goods from you – how would you cover that loss?  Obvious answer here – Employee Dishonesty!  “Wait a minute,” you might say, “that’s already covered on my policy!”  “Well, yes and no” says Sammy.  You might have policy that includes a throw-in amount of this coverage, but it’s usually minimal – $10,000 or $25,000.  If you have a larger operation, or sell higher valued items (cars, machinery, jewelry etc), it may not be enough!  What if an employee at a jewelry store decides they are quitting, and on their last day walks out with a handful of diamond rings?  Or, consider this – there was a case recently where an employee of an auto dealership had been stealing smaller amounts of money from each sale, and ended up getting caught after stealing MILLIONS!  $10,000 is a drop in the bucket in cases like these – and you have to cover the rest of the loss yourself!  Basically, take a look at what you’ve got and make sure you are comfortable with it!

Business Income & Extra Expense (BI/EE) – Are you running an operation that depends on a building, or the contents within?  Who isn’t!  Virtually everyone could have a BI/EE loss, but not everyone is carrying the coverage.  To make it simple, BI/EE provides you with the income that you lose out on in the event of a covered loss (a fire, theft, etc) that prevents you from operating your business for any length of time.   For example, you run a store that sells widgets, and you have a fire that destroys your location – the building and all your contents are gone.  Not only have you lost those goods, but you are also losing income while the business is rebuilding!  BI/EE protects you against this loss!  It’s complicated to explain, and would take a lot more space to go into in depth.   Basically, business income protects the actual income that’s lost, while extra expense provides you the ability to do what you can to start earning income again ASAP.  It’s the extra expenses you incur to start earning income again – for instance, renting a second location to sell widgets while your original one is being rebuilt.

Phew!  That’s a good start!  Now, on to coverages specifically for contractors or restaurant owners!

Voluntary Property DamagesContractors:  Do you ever find yourself moving a client’s TV, furniture, appliances, etc in order to complete your work?  Happens all the time, right?  Guess what – if you drop or break any of those things, that’s almost never covered by your general liability policy!  Boy, I’m chock full of good news today….!  However, there is a quick and easy remedy for this situation – add Voluntary Property Damages!  For most smaller operations (1-5 employees), $5,000 or $10,000 of this coverage should be sufficient, commonly includes a $250 or $500 deductible, and is relatively inexpensive.  Better to have and not need……

Utility Services Off-Premises Power Failure – Direct Damage & Time ElementWhew, that’s a mouthful, eh restauranteurs?  But make sure you can say it to your agent – it’s a crucial one!  “But I’ve got spoilage coverage” says you.  “Not if the food spoils due to an interruption of power off your premises” says Sammy.  If someone crashes their car into a telephone pole a quarter mile from your building, for instance, that loss would be excluded under your ordinary spoilage coverage – you’d need the coverage above.  Direct Damage provides for the food that’s lost, while time element is for the income you lose while replenishing your stock.

Well, I hope that you made it through all of this information alive and well!  If you have any questions, you can always feel free to comment, email, or call my daddy – he loves telling people about insurance coverages!

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