Contractor Liability - Caution

artinall

After paying for and obtaining Contractors Liability coverage, there came the question of care, custody and control. The agent was unclear, though at first he mentioned items being moved would be covered and he thought care custody and control would be attached to the policy. Later I decided to contact the carriers office who said they thought it was excluded from the policy, but to check with my agent to be sure, who then suggested we wait until a copy of the policy is received to verify it. Question marks then arose as to the agents integrity - should'nt he know if he represents the carrier and deals in contactor liability which he told me he does?

At any rate, after reviewing the policy myself I found personal property (care, custody and control) to be excluded from the policy, as is, and get this; any real property damage or loss resulting from my operations. Why else would I have the policy? This is ridiculous in the extreme.

At this point I'm trying to figure what rare circumstance would be covered, aside from someone tripping over one of my tools.

This to me has started to smack of a racket, or at least fraud. Aside from the idea that nobody ever gets (to my knowledge) a copy of coverage prior to paying for it at which time it is already in effect? Contractors (and everyone) are basicallly agreeing to terms they aren't aware prior to receiving policies in writing. You must rely on what the agent tells you.

Consulting another insurance agent I hear that it 'appears rather biased in favor of the carrier' and that 'most policy holders don't read their own policies and insurance companies know this'. And as if that weren't enough, read on ... the carrier may cancel the policy in which event the refund is pro-rata ... if the policy holder cancels, the refund may be less than pro-rata.

So my suggestion, is to take and hour or two and review the actual terms of your contractors liability policy. And don't rely on what your agent tells you. It may seem natural but don't. This could end up costing you everything and then some, if you don't win in court where the burden may be heaved on you.

- Now considering whether to contact the state insurance commisioner about this (discrepency between what agent says and actual policy terms)

Our society has strayed in the wrong direction. Too often, it seems to be what ever can be gotten away with.

Double-A

Thanks for posting this.

BTW, where are you located (and would you put that in your profile, so others may know also, without asking)?

There are four relationships that every new business person should foster and seek out as soon as possible. Knowing a good accountant, lawyer, insurance agent and mentor are imperative, unless you like reinventing the wheel.

I'd say its time to go shopping for a new agent. One that will actually find answers to your questions before you buy a policy through them.

When you do find a new one, talk to him about this before you renew your GL and ask what you can do to cover these situations.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

tnt specialty

Insurance is a racket.....

The agent ought to be held accountable....Here's just a couple of experience's off the top of my head....

Only been involveed a couple of times with claims over thr past 20 odd years....

Once had a claim, only to find out our GL did not cover us while working on the job....Only "completed operations".....Was many years ago.....I believe the insurance ended up paying for some, or all when the dust finally settled....

Another thing is this "minnimum earned premium" thing they'll sneak in on you....Or just plain old fail to tell you about.....You may purchase a policy figuring the rate as you go throughout the year and get whallopped for a "minimum earned premium" at the end....Some of these can be $ 50,0000 or more.....Say your a small contractor, and only accumulated $ 10,000 or so in premiums, (according to your premiium base); An extra $40k would be devastating....

artinall

This is not only for new business people, Double-A, while over the past 20 yrs or so virtually nobody has asked for insurance credentials. I would not rely on an agent, period. It will likely come down to what is in writing, unless you can prove otherwise.

When someone says 'contractors liability (property)' what does that mean?

Only to find it looks to be excluded in two simple strokes in the policy (including personal property)? What there should be is minimum amounts by law when a policy is stated to be of such a type.

It is common sense that it is not excluded. Especially if the agent makes no mention of it. But rather says 'covers property damage'

Obviously someone just wanted to sell a policy. Everything else, taking a back seat.

Grumpy

I made a similair mistake of going with a guy who's specialty is auto home life. That's like hiring a residential interior specialist to install some exterior commercial fixtures. No good can come of it.

Double-A

Art, there are good folks in the business that sell insurance. You need to find them. Won't be easy. I'd start by talking with others in business in your area. Especially the ones that need liability insurance and have been in business for a while.

Nothing worth having in this life is easy to obtain. This is no exception. Just keep looking and talking to them. It sounds like you've gotten your education on this subject the hard way, now put it to some good use with some direct questions.

I went through several agents before I found one that didn't squirm when I told him he's gonna earn his fees or I'm gonna fire him. Now I have to call him to discuss this whole mess you've found once I finish reading through our policies again.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Floordude

No sheet! I have to go thoroughly read my policy.

__________________
**Education is the key to success. Learn more, earn more.**
http://www.AustinFloorguy.com

threaderman

It's like any other insurance you buy.You usually have to buy extra riders to get the complete protection.Sad but true.Upselling.

__________________
Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

artinall

Didn't want to cause anyone extra work with the read time, but the fact is, even with my auto policy I've had to PUSH PUSH PUSH to get answers.

One thing I've discovered is that owners within the same household are excluded from my auto policy - buried in the fine print. While others outside of the household may not be, strange as it appears.

And the rate? While going with the same carrier for two years/same agent, he claimed he was giving me the best rate I could get -- through another agent I found much lower rates (more than 30%). A company my agent had dealt with all along. No matter what they say or lead you to believe, you have to monitor these agents.

But the contractors liability is so important -- certainly the exclusions section.
Well, that's their bread and butter.