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Discussion Starter · #1 · (Edited)
I'm not RRP certified. The primary reason was my insurance would not have covered any of the work or defended in a law suit.

If you read your policy you will most likely find the there is a hazardous substance clause. It excludes any hazardous substance. It was that clause that lead (pun intended) me to look into whether or not I'd be exposed on my own. My agent did not know so he checked with the company. An underwriter for the company responded that I would not be covered, even if I was RRP certified. He went so far as to state that the clause was part of the standard GL policy. No company would cover anyone under the standard policy he stated.

Today I received an advisory notice from the insurance company. It clearly states that they will cover no claims nor defend against any suits brought due to lead. Even if you do a swab test for lead that operation would not be covered under the exclusions. It also states;

"excluding any coverage for any loss, cost or expense arising out of any request, demand, order or statutory or regulatory requirement"

Tom
 

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My GL policy will only cover damages sustained on the second Tuesday of the week, and only if caused by a stampede of rabid zebras wearing pink tu-tus playing kazoos during a thunderstorm.

There's a reason you get a phone-book sized policy.... it contains all their exclusions. And that pretty much says, "We won't cover you for anything".

Insurance premiums are pretty much money down the drain. I pay them only because I'm required to maintain insurance as a condition of licensing.
 

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I have had the displeasure of walking into an insurance office, which I will leave nameless, and sat down with the agent explaining exactly what I did (at the time as a sub for Sears Home Improvements doing kitchen remodels and cabinet refacing), and the amount of coverage I wanted. There were no problems and the agent was very helpful and seemed knowledgeable.

The problem began when I was assigned a job that involved taking out an old bathroom cabinet in an upstairs bathroom of a 70 year old house. Someone had made modifications to the cast iron plumbing stack in the wall where as they ended up caulking a 1 1/2 inch plastic drain pipe into the cast iron hub within the wall. The budget didn't allow for me to make the necessary modifications to do it properly, so I essentially refused the job in midstream. I was told, however, if I didn't complete the job, and at least put it back the way it was before I touched anything (as there weren't any problems [as defined by Sears management] at the time), I wouldn't be taking out any more work. Anyway, I ended up doing the job under protest.

Sure enough, about a year later, the pipe that was caulked into the hub was knocked about and leaked on the new cabinet and ruined the ceiling below causing about 10 grand in damage. I filed a claim and was told by the adjustor that my policy didn't cover the work that I did! What exactly did I have to explain to the agent when I first sat down with them to get my policy. I depended on them to be the experts and sell me the exact policy that would cover me.
 

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So you're telling me this whole "I give you money for nothing in return" thing is a big scam?
Pretty much. But, if I don't have insurance, I can't maintain my license, and then I can't pull permits, which means no workee.
 

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There is a rider for everything, and everything is extra. Just renewed late Sept. I got a nice letter explaining the unforseen expenses of Hurricane Sandy and then they increased my policy $250 more / year. I guess I have to share the burden.
 

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Jeff G said:
I have had the displeasure of walking into an insurance office, which I will leave nameless, and sat down with the agent explaining exactly what I did (at the time as a sub for Sears Home Improvements doing kitchen remodels and cabinet refacing), and the amount of coverage I wanted. There were no problems and the agent was very helpful and seemed knowledgeable. The problem began when I was assigned a job that involved taking out an old bathroom cabinet in an upstairs bathroom of a 70 year old house. Someone had made modifications to the cast iron plumbing stack in the wall where as they ended up caulking a 1 1/2 inch plastic drain pipe into the cast iron hub within the wall. The budget didn't allow for me to make the necessary modifications to do it properly, so I essentially refused the job in midstream. I was told, however, if I didn't complete the job, and at least put it back the way it was before I touched anything (as there weren't any problems [as defined by Sears management] at the time), I wouldn't be taking out any more work. Anyway, I ended up doing the job under protest. Sure enough, about a year later, the pipe that was caulked into the hub was knocked about and leaked on the new cabinet and ruined the ceiling below causing about 10 grand in damage. I filed a claim and was told by the adjustor that my policy didn't cover the work that I did! What exactly did I have to explain to the agent when I first sat down with them to get my policy. I depended on them to be the experts and sell me the exact policy that would cover me.
Its not suppose to cover your work, it's suppose to cover the damages caused by your work. Thats insurance 101
 

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Discussion Starter · #10 ·
My carrier will not write a hazardous substance rider. The underwriter informed me that there are only 2 companies in Indiana that would insure for lead. It would have to be a full abatement policy.

Tom
 

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480sparky said:
Pretty much. But, if I don't have insurance, I can't maintain my license, and then I can't pull permits, which means no workee.
The amazing thing here in Cali is your not required to have GL insurance. I think it's because it might cause minorities to be mis-proportionally alienated from the market. Got to love Cali.
 

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Discussion Starter · #12 ·
If I don't have GL and workmen's comp I can't license or pull permits either. I don't have employees, in Indiana I can opt out by filling the proper form with the state. Illinois has no way to opt out so I have to pay for WC and it won't cover me.

Tom
 

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I carry lots of insurance plus umbrella insurance. Not to mention my home owners insurance that can help protect your home against lawsuits. It's what you do when you have assets.
 

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There is a rider for everything, and everything is extra. Just renewed late Sept. I got a nice letter explaining the unforseen expenses of Hurricane Sandy and then they increased my policy $250 more / year. I guess I have to share the burden.
They increased mine $250 for no real reason just because they could.
 

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Discussion Starter · #15 ·
I carry lots of insurance plus umbrella insurance. Not to mention my home owners insurance that can help protect your home against lawsuits. It's what you do when you have assets.
Do you know if any of them cover hazardous substances? Might be worth a phone call to find out.

Tom
 

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I’m always frustrated when I hear/read these types of comments, because I feel like I have to defend my reputation. I imagine that is how reputable contractors feel when “hacks” do a lousy job and then customers complain about all construction work in general. I believe the main problem is the insurance agent/broker you are dealing with. Either they are not taking the time to properly explain to their clients what coverage is provided and what is excluded; or they don’t have the expertise in construction insurance risks and therefore don’t know what riders, endorsements, etc. they need to customize on your commercial policy to make sure you are properly insured.

GL policies cover claims for property damage and bodily injury (usually acute, such as a broken leg from a trip & fall).

“Lead” claims are pollution claims, so you need a Pollution Liability policy. If someone claims bodily injury because of lead dust, it is more likely a chronic condition that has taken many years to manifest itself; the same like lung cancers from silica dust, asbestos or other pollutants. These are very difficult claims to settle and are quite different from the standard type GL claims; so the underwriters, adjusters and policy coverage are specialized. (Think of a framer trying to do a cabinetmaker’s work; they are both carpenters but are still very different from each other.)

Another exposure is “clean up costs”. Again, a GL policy is not designed to cover Ministry of Environment mandated testing, clean-up, monitoring, etc., but a Pollution Liability policy is.

There are many different levels of Pollution Liability insurance. You usually start with a pollution policy that excludes lead, mould, silica, asbestos, etc. but these pollutants can be added by endorsement for an extra charge. Yes, it can get expensive, and that is because it is expensive to settle these types of claims.

Back to the GL policy: There are different types of pollution exclusions in the GL policy and depending on how your specific policy is written, there might be limited coverage for fumes in a building, work done by sub-contractors, and more. I won’t get into it all in detail here because I would be writing a book on the subject. Your broker can advise and explain on your specific policy wordings.

The crux of the issue is that you pay your broker/agent to arrange a customized commercial insurance program for you; and it should not be based solely on price, but based mainly on the coverages you need. Yes, it is true that most of the major domestic insurers don’t write the specialized insurance coverages such as lead, mould, asbestos. It might mean getting two policies; one for your standard GL coverage written with a standard insurer; and a second policy written with a specialty insurer or Lloyds of London for the hazardous substances coverage. No one is saying you have to buy it. But your broker should be clearly explaining:

- that “lead”, "mould", "asbestos" claims are not covered under a GL policy;
- and what it would cost to buy specialty insurance for those risks;
- then you can make an informed decision on whether you want to be insured or uninsured for the different pollution perils.

If your current broker isn’t able to provide this advice and guidance, then you need to find another broker.
 

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tjbnwi said:
Do you know if any of them cover hazardous substances? Might be worth a phone call to find out. Tom
Yep, I'm checking that first thing in the morning after the heads up from this post. Thanks Tom
 

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Discussion Starter · #18 ·
Astrix,

My agent was up front and told me with the RRP rules he was not certain how the company would handle the lead issue. He did tell me as far as he knew it wold not be covered. He did verify that it would not be covered under the GL policy and forwarded the email from the underwriter to me. As I stated, the company I'm with does not offer any coverage for this risk.

Tom
 

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Astrix,

My agent was up front and told me with the RRP rules he was not certain how the company would handle the lead issue. He did tell me as far as he knew it wold not be covered. He did verify that it would not be covered under the GL policy and forwarded the email from the underwriter to me. As I stated, the company I'm with does not offer any coverage for this risk.

Tom
Tom,

In your situation, I agree that your agent did their job. They double-checked and got you a clear answer, in writing, so that you know exactly that lead ops are not covered under a GL policy.

It was the comments that followed your OP that caused me concern. Jeff G, for example, was under the impression that he had coverage only to find out after there was a claim that he was uninsured. Yes, it is standard that "own work" is not covered, but he did not have to know that on his own; his broker should have explained that to him. His broker should have helped mediate with the insurance company and/or offered a satisfactory explanation to him why certain parts of a claim are not covered.
 

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Its not suppose to cover your work, it's suppose to cover the damages caused by your work. Thats insurance 101
My point was: it didn't! The claim was denied because "I didn't have the right coverage." (btw, this was the first, and only, time I've had to file a claim)

Even after I went in the insurance office and explained everything I did in lieu of getting the right policy for me. I was no insurance professional, and I depended upon them to sell me the right policy. Further, I had paid the policy premiums for this coverage for over 6 years, all the while never knowing it wasn't what I needed.

This happened many years ago, and I have since been educated about GL policies.

I made the post as a warning to anyone that may not be aware of such a problem.
 
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