Tag Archives: Contractor Insurance

Subcontractor’s Warranty Endorsement

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Those who are contractors, construction companies, maintenance companies, or other companies that use subcontractors may encounter “Subcontractors’ Warranty Endorsement” on their Commercial General Liability policies. This endorsement requires contractors to obtain additional insured status on the CGL policy of their subcontractors and to make their policies secondary to their subcontractor’s. In addition, contractors may face significant consequences if they do not meet the endorsement’s requirements.

The language of the “Subcontractors’ Warranty Endorsement” can differ among insurance providers, but the main terms of an endorsement mostly remain the same. A subcontractor’s policy must list the contractor as an additional insured and as a requirement for coverage for any insured under this policy the insured must ensure that all subcontractors maintain Commercial General Liability insurance from a company with a “A” rating and minimum liability limits of  $1,000,000 per occurrence and $2,000,000 general aggregate and  $2,000,000 products and completed operations aggregate. Additionally, the insured must be listed as an additional insured on all such subcontractors’ commercial general liability policies.

The endorsement may also require the contractor to secure an indemnity agreement from the subcontractor in addition to having additional insured status on the subcontractor’s policy.

Loss Exposure of Contractors

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Contractors are subject to some unique loss exposures. When a prospective client needs certain types of construction work done, contractors either bid for the job or negotiate a contract. Due to this, the customer specifies what should be done in the job specification. It is common for contracting businesses to have multiple locations. There are frequent changes to the job site. There may be a contractor who controls one job site while the employees or subcontractors control other job sites simultaneously or sequentially. As a contractor, you are exposed to a unique range of loss exposures. It is imperative for any contractor to evaluate and analyze their risks before obtaining contractors insurance.  

In the construction industry, what does an “Additional Insured” do and what is the “Additional Insured Endorsement”?

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Many construction contracts require contractors to sign pages containing detailed insurance requirements, coverages, and minimum dollar amounts.  Review any contract’s insurance requirements carefully before signing to ensure that your current insurance complies with the contract’s requirements, including coverage types and financial limits.  Your contractor insurance specialist is a great resource for help in this regard, if you are in doubt.

A common request is for owners to be added to a general contractor’s policy covering commercial general liability (CGL).  Subcontractors are often required to name their general contractors as additional insureds on their general liability, business auto, workers compensation and umbrella and or excess policies.

So, what is an “additional insured”?  Additional insureds are anyone who is covered by the primary insured’s insurance policy, but not the primary insured.  If someone wants to be added to someone else’s policy, how does that work?

To obtain additional insured status, the insurance company must issue an endorsement to the primary named insured’s policy.

It is the wording of the endorsement that determines the scope of an additional insured’s coverage.  A certificate of insurance cannot grant additional insured status, although certificates are often presented as proof of additional insured status. As proof of coverage, an additional insured endorsement must be attached to the certificate of liability insurance.

In the event that additional insured status is properly obtained, the additional insured is entitled to a wide range of important rights.  A claim may be filed directly against an insurance company by an additional insured.  This right entitles an individual to either legal defense against third-party claims, or to coverage for damages caused.  Furthermore, by retaining the loss off of their own loss history, the additional insured may be able to prevent price increases in the future.

Please check with your contractor insurance specialist if you receive a request to add someone else as an additional insured on one of your policies. The status of additional insured is important for the construction industry, but care must be taken to ensure that this status is granted correctly.

Liability insurance for contractors is an essential coverage, but what does it cover?

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However cautious you may be when carrying out your projects, mishaps and accidents can still occur. This is an indeterminate situation that is beyond your control. You can’t always rely on your people and equipment to perform perfectly. If you are legally obligated to cover accident and machine expenses, it will cause delays and income reduction for you as the contractor. Liability insurance for contractors is undoubtedly the safest way to prevent financial ruin. In a nutshell, an insurance policy for contractors covers all third-party claims. Any damages or accidents that occur on your business site can also lead to lawsuits and complaints from clients and other parties. You and employees under your supervision are covered when claims are made against the insurance. A contractor is a business manager and a  contractor. The construction site requires many employees to work. Some of these individuals are also expected to commute and work across multiple job sites. The possibility of these people being involved in an accident or causing one to a passerby is thus high. Typically, contractors have liability insurance to cover Property damage and bodily injury. A person may sue a contractor if he or she suffers an injury or damage to their property. Completing operations and  products and Advertising injuries and personal injuries: Libel, slander, and false claims may result in damages. In addition to other types of insurance coverage, contractor liability insurance is a must-have for any contractor.

To obtain a contractor liability insurance quote, please contact www.safeproins.com

Additional Insured Endorsements for Contractors

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Contractors can’t ignore the importance of financial protection, no matter what sector they work in. You will also be protected from lawsuits and damages if you have a contractor’s insurance policy.

Here’s how it works

The purpose of contractor insurance is to provide financial protection to your business if it is involved in an accident or a peril that causes financial loss. An insurance policy is an agreement between a firm/individual and an insurer. A specific premium amount will be charged as the price of insurance coverage, which you will receive from the insurer if damages occur. In essence, you’ll be able to choose what kinds of coverage you want to protect, which will depend on your preferences, budget, and needs. Depending on the terms outlined by the signed contract, financial coverage will be provided.

Contractors are sometimes required to show proof of insurance and enlist the client as additional insured on their commercial general liability policies. It is common for a certificate of insurance to accompany an endorsement as evidence of coverage.

An additional insured endorsement can be obtained by contractors

Aside from the requirements, restrictions and complexities that come with every insurance policy, getting an additional endorsement also has its own peculiarities.

As a first step, you need to define who you want to include in the endorsements. You can add an additional insured either as an individual or as an organization. Depending on the purpose of the additional endorsement, the wording may differ. It can be obtained for ongoing or completed operations.

ONGOING OPERATIONS

COMPLETED OPERATIONS

BLANKET ADDITIONAL INSURED ENDORSEMENT

A blanket additional insured endorsement, also called an automatic endorsement, allows for a contract to automatically include those entities and individuals as AIs.