What You Need To Know
As an artisan contractor doing business locally here in Baldwin Florida,
your unique insurance risks and exposures apply to a number of insurance policies.
This page provides a basic overview of the major coverages and policy forms and how they need to be incorporated into your Florida Contractors Insurance Program.
Commercial General Liability Insurance
For Florida Contractors
General liability insurance is the backbone policy of the contracting industry. General liability insurance
provides protection against financial loss arising out of lawsuit against your company from a covered loss and concerns itself with tort liability.
Part of the policy provides defense coverage. If your contracting company is sued for a covered claim, your insurance company will defend you.
As a contractor, one of the parts of the policy that you will use just by the very nature of
your business is "Products & Completed Operations". You may or may not have
currently have proper insurance coverage, but, as a contractor, you have a "Completed Operations" exposure.
Let's say you build a new deck on my house in Baldwin Florida in
July of 2011. The project goes as planned and you move on to your next project and so on for years to come.
In November of 2012 we are having a party and the deck
collapses. All the guests are hurt and the damage was due to your negligence. A couple of things are now going to
happen - all or most of the injured guests are going to send me certified mail
notifying me of their injuries. Either right before or right after that,
I'll make my problem your problem when I send you the same certified mail.
There is coverage under "Products & Completed Operations", but which policy will pay? The one you had at the time you installed the deck or the one you have now, when the guests got injured?
The policy that was in place when the guests got injured is the answer.
If you have coverage at the time, that insurance company will respond. If you
have no coverage, you are on your own for the damage, the injuries and the cost to defend the lawsuits.
It Gets Worse If You Did The Work In Your Own Name
It gets even worse if you did the work in your own name. In that event, you are personally on the hook with all of your personal assets.
In my opinion, if your agent doesn't explain to you about this problem while you are shopping for coverage - it's called Discontinued operations and the huge liability that never goes away - you have the wrong insurance agent.
A general insurance agent may or may not pass this information along to you. A Florida contractor insurance specialist most certainly would.
Here in Baldwin Florida, Kite Insurance Agency, LLC is the answer to all of your
contractor insurance questions and concerns.
Commercial Auto Insurance
The Second Component of Your Baldwin FL Contractors Insurance Program
As a Baldwin FL artisan contractor, the next policy that many contractors need
is a commercial auto insurance policy or business auto insurance policy.
In insurance terms, this policy includes first-party coverage (you) and third-party (another person)
losses arising out of the contractor's ownership and use of cars, trucks, and trailers.
One of the key areas that start-up contractors often attempt to blend together is
to use their personal vehicle in their contracting business. This is a
bad idea of colossal scale as many personal auto policies have an exclusion that strips away all coverage for Vans, Pickups, and Panel Trucks
used in business or carrying tools for use as a trade contractor.
Let's say you have a contracting business here in Baldwin and keep your pickup truck on your
personal auto policy. You figure you will get around to switching it over later.
What this means is if there is an accident with serious
injury - the other driver is injured, you are injured, and both vehicles are damaged.
With a business auto policy, there is coverage within the correct policies for all of these losses.
Under the scenario where you have a personal auto policy - NO Coverage - the lawsuit that will follow is on you.
The damage to your vehicle and the other vehicle is on you. Your medical bills are on you.
"Don't risk what you can't afford to lose". You have set yourself up to lose everything when you don't properly insure your vehicle as part of your contractor's insurance program.
Insurance risk managers say their smartest clients spend pennies to protect dollars. No matter whether you are
long established or a start up artisan contractor, you should heed this advice as part of your contractor's insurance package.
Insurance industry experts suggest that the commercial auto policy is probably the
largest exposure to loss that you have as a Baldwin contractor.
The good news: Contractor Insurance Specialists not only have many different companies to approach
with these types of risk, but they also know all the rating and coverage parameters to minimize your expense while maximizing your coverage.
Many insurance companies either give substantial policy savings or will create a "package" for combining your
Commercial Auto Policy with a Contractors Commercial General Liability Policy.
Workers Compensation Coverage
The Third Component of a Baldwin FL Contractors Insurance Program
If,in the line of their employment, an employee is injured, workers compensation is the exclusive remedy.
Day after day, my agency receives calls from small contractors asking if they need
Workers Compensation Insurance coverage.
The answer is simple - Yes. There are options as to whether or not owners choose to be included or not, but
the short answer is that Workers Comp applies if an employee is injured in the course of their employment.
There are a number of cost saving measures that can be used to help reduce premiums, as well as industry
accepted practices to control claim frequency and claim severity. Nobody wants an employee to be injured, and proactive
employers use every resource they can to protect their employees, as they are, in a very real sense, the company's lifeblood.
Contractors Workers Compensation coverage scares many insurance companies. The reason is simple. The
frequency and the severity of the claims, but also workers comp claims are long tail claims.
There is no maximum for how long a worker's compensation claim can go or how much it can cost.
That whole idea terrifies the insurance company bean counters.
Don't Let An Uninformed Agent Cost You Thousands
The Answers is Easy For Baldwin FL Contractors
Many agents will tell their clients there is no difference and that Workers Comp is Workers Comp.
That is completely wrong. Contractors Workers Compensation Insurance is expensive - and in no
line of insurance do you, the insured, share in the loss the way you do in Workers Compensation.
I have seen actuarial estimates that show that, on anything other than what insurance professionals call
a large loss or "shock loss", you as the consumer are going to pay back
not only the cost of the claim, but probably 3-5 times the entire claim due to poor loss experience modification.
If, in the line of their employment, an employee is injured, workers compensation is the exclusive remedy.
Day after day, my agency receives calls from small contractors asking if they need
Workers Comp Insurance coverage.
The answer is simple - Yes. There are options as to whether or not
owners choose to be included or not, but the short answer is that
Workers Comp applies if an employee is injured in the course of their employment. sub-contractors, or seasonal or casual labor without the correct documentation, you will have
their payroll and exposure added to your workers compensation policy. As an agency, we provide
our contractors with a proprietary audit package to do everything possible to bulletproof your
contracting business from what - for other contractors - is an absolute nightmare.
With the proper knowledgeable and informed agent, Workers Compensation for Baldwin Florida can go a smooth, hassle free path.
Increased Limits - An Umbrella or Excess Liability Policy is the Answer
If you are an artisan contractor here in Baldwin Florida and are dealing with
General Contractors, Risk Managers, or state or local municipalities, chances are very good that
you will need to provide higher limits of liability.
It is not at all unusual that you would be required to provide $3 million worth of bodily injury
coverage or more - $5 million limits are not at all uncommon.
The insurance industry uses an Umbrella or Excess Liability policy to achieve these limits.
An Umbrella policy provides excess or increased liability over your primary business policies, your
Commercial Auto, Employers Liability and Contractors Commercial General Liability policy
Umbrella policies are purchased in increments of $1 million and the insurance
company will quote a price per million and then allow you to increase your
liability coverage up to those required by contract.
Inland Marine Coverage - Baldwin
Inland Marine policies cover your contractor's equipment. This includes something as simple as your hand
tools to larger equipment like backhoes, booms and cranes, skid steers, etc. Depending on how the insurance company files their product, this coverage can either be
standalone or added to your General Liability policy. Given the examples, the norm would be that you would have your hand tools
"unscheduled". You would not have to enumerate each and every
tool. Instead, you would take a limit of insurance - say $5,000 - with no
tool individual covered for more than $500.
You will move from unscheduled to scheduled coverage when you get into larger equipment.
You and the insurance company will agree to a specific amount of coverage for each piece of
equipment. For instance, 2008 Kubota Skid Steer Serial #4879452 with a value of $20,000 and a $500
deductible.
One of the benefits to this line of insurance is that it creates a package or multi line policy when
combined with your commercial general liability. Generally, this means that a credit will apply and
your premiums should be reduced.
Builder's Risk Insurance - Baldwin Florida
Construction projects involve unique risks not covered by other insurance coverage forms which are designed to insure existing buildings and contents.
Structures under construction are more likely to suffer damage from the elements - wind, rain, snow, hail etc. - than completed structures.
These structures are much more apt to sustain vandalism and theft of unsecured contents than an from
an existing structure.
Another issue that must be addressed with a builders risk policy is that the values change
dramatically throughout. They do not remain stable as they would with an existing building.
The value of the building as it is coming out of the ground is very
slight, but as time progresses the value continues to
increase. Often the increase is well beyond the original contemplated value.
Another issue which the builders risk policy addresses that others don't address well is that during
the project, property to be used in the construction may be owned by many different parties.
The general contractor, subcontractors, and the owner. And, just to add to the issue, property can be
in transit, at the job site, or at off-site locations.
Baldwin Employment Practices Liability Insurance
Employment practices lawsuits have become an accepted part of the workplace in America. These
lawsuits are based on allegations of wrongful termination, discrimination, sexual harassment,
invasion of privacy, slander as well as a host of others.
The truth is insurance companies lose these lawsuits with alarming frequency and the financial hits are beyond steep.
As of this writing, the average plaintiff's verdict in employment practices lawsuits exceeds $250,000 with 15% of
all verdicts breaking the $1 million barrier.
A good chance of losing with huge dollars at risk is a perfect storm for financial disaster as well as
people chasing this and, in reality, your participation in their pursuit of the pot of gold.
Contractors' unique business model compounds this problem with the use of temporary and seasonal
workers, lack of centralized managerial control and less formalized control on harassment and
discrimination.
As a professional contractors' insurance specialist, I can tell you without hesitation this is an
area many insurance agents aren't telling their contracting clients about. As the economy flip flops
this makes for far more disgruntled employees or, worse yet, former employees.
Simply put, if you decide to self insure this risk that is certainly your option. Our job is to
present you with your options and provide you with ability to make the most informed decision possible.
More bluntly put, this is one area where many contractors have a bright "bulls-eye painted on your
back" and if your agent isn't talking to you about the real world issues - find another
agent. Find an agent who specializes in protecting businesses like yours.
For Baldwin Florida contractors, this coverage is not being discussed with you often enough.
We are the definitive answer for contractor's Employment Practices Liability.
If you are interested in obtaining competitive quotes for any or all of your contracting business,
call us at (904) 525-8860 or
contact us for answers to your contractors insurance questions.
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