DIFFERENT TYPES OF COMMERCIAL INSURANCE

The most common types of commercial insurance are property, liability and workers’ compensation. In general, property insurance covers damages to your business property; liability insurance covers damages to third parties; and workers’ compensation insurance covers on-the-job injuries to your employees. Depending on your business, you may want additional specialized coverages. Listed below are some of the different types of business insurance.

PROPERTY INSURANCE Property insurance pays for losses and damages to real or personal property. For example, a property insurance policy would cover fire damage to your office space. You can purchase additional coverages for business property, including:

Boiler and Machinery Insurance Boiler and machinery insurance, sometimes referred to as “equipment breakdown” or “mechanical breakdown coverage,” provides coverage for the accidental breakdown of boilers, machinery, and equipment. This type of coverage usually will reimburse you for property damage and business interruption losses. For example, this coverage would cover fire damage to computers.

Debris Removal Insurance Debris removal insurance covers the cost of removing debris after a fire, flood, windstorm, etc. For example, a fire burns your building to the ground. Before you can start rebuilding, the remains of the old building have to be removed. Your property insurance will cover the costs of rebuilding, but not of removing the debris.

Builder’s Risk Insurance Builder’s risk insurance covers buildings while they are being constructed. For example, a Builder’s risk policy would cover losses if a windstorm takes down your partially constructed condominium complex.

Glass Insurance Glass insurance covers broken store windows and plate glass windows.

Inland Marine Insurance Inland marine insurance covers property in transit and other people’s property on your premises. For example, this insurance would cover fire-damage to customers’ clothing from a fire at your dry cleaning business.

Business Interruption Insurance Business interruption insurance covers lost income and expenses resulting from property damage or loss. For example, if a fire forces you to close your doors for two months, this insurance would reimburse you for salaries, taxes, rents, and net profits that would have been earned during the two-month period.

Ordinance or Law Insurance Ordinance or law insurance covers the costs associated with having to demolish and rebuild to code when your building has been partially destroyed (usually 50 percent). For example, your three-story building is 100 years old. A flood destroys the basement and first two stories. Because more than 50 percent of your building has to be rebuilt, a local ordinance requires that the building be completely demolished and rebuilt according to current building codes. Property insurance covers only the replacement value, not the upgrade.

Tenant’s Insurance Commercial leases often require tenants to carry a certain amount of insurance. A renter’s commercial policy covers damages to improvements you make to your rental space and damages to the building caused by the negligence of your employees.

Crime Insurance Crime insurance covers theft, burglary, and robbery of money, securities, stock, and fixtures from employees and outsiders.

Fidelity Bonds A bond company covers losses due to a bonded employee’s theft of business property and money.

LIABILITY INSURANCE Liability insurance covers injuries that you cause to third parties. If someone sues you for personal injuries or property damage, the cost of defending and resolving the suit would be covered by your liability insurance policy. A general liability policy will cover you for common risks, including customer injuries on your premises. More specialized varieties of liability insurance include:

Errors and Omissions Insurance Errors and omissions (“E & O”) insurance covers inadvertent mistakes or failures that cause injury to a third party. The act must actually be an inadvertent error, and not merely poor judgment or intentional acts. For example, an E & O policy would cover damages arising from an insurance agent failing to file policy applications, or a notary forgetting to fill out notarizations properly.

Malpractice Insurance Malpractice insurance, or professional liability insurance, pays for losses resulting from injuries to third parties when a professional’s conduct falls below the profession’s standard of care. For example, if a doctor makes a mistake that other doctors of his specialty would not have made, his patient might sue him. A malpractice policy will pay his defense costs and any judgment or settlement. Malpractice insurance is available for doctors, dentists, accountants, real estate agents, architects, and other professionals.

Automobile Insurance Commercial automobile policies cover the cars, vans, trucks and trailers used in your business. The coverage will reimburse you if your vehicles are damaged or stolen or if the driver injures a person or property.

Directors’ and Officers’ Liability Insurance This type of insurance is generally purchased by corporations and nonprofit organizations to cover the costs of lawsuits against directors and officers.

WORKERS’ COMPENSATION INSURANCE Workers’ compensation insurance covers you for an employee’s on-the-job injuries. Businesses with employees are required by various state laws to carry some type of workers’ compensation insurance. In most cases, workers’ compensation laws prohibit the employee from bringing a negligence lawsuit against an employer for work-related injuries.  

Source: Findlaw.com

Contractors insurance: A survey of markets

Clapp, Wallace L Jr

Complete insurance for contractors constitutes a wide variety of coverages not originally perceived as needed by contractors a few years ago. Pollution exposures have complicated the picture because of various federal laws governing liabilities and cleanup of our environment by the Environmental Protection Agency.

Many contractors have also taken on design capabilities which introduces an element of professional liability to the client if the design as well as workmanship becomes subject to liability. To those contractors who advise or are consultants for cleanup of asbestos or other environmental wastes on properties they are working on there is also a pollution exposure.

Because there are many different types of contractors, every insurance agent has an opportunity to write contractors insurance programs. Not all are large general contractors doing heavy construction, requiring large complex insurance programs. Some are small artisan contractors or roofers that do single tasks in residences or small commercial buildings.

Agents who solicit contractors who are just starting out prosper when the contractors business begins to expand. Liability insurance and bonds are the first needs for the young contractor. As business grows, there is a greater need for workers compensation and property insurance for construction equipment.

Artisan contractors

represent the greatest number of contractor prospects. A wide number of classes, including plumbers, electrical contractors, painting contractors, dry wall and plasterers, paper hangers, carpenters, ornamental iron workers, bricklayers and masons, tilers and floor covering contractors, work as artisans, usually on an independent basis or under subcontract of a general contractor. These artisans are mostly involved with residential property but also work as subs in larger risks and commercial buildings.

General contractors handle the bulk of heavy construction. They may be involved in building large commercial buildings, or offer a service but do not build. Examples of general and specialty contractors in this class include general contractors, demolition contractors, land graders, HVAC contractors, steel erectors, excavation contractors, bridge and tunnel construction, marine contractors, railroad construction, concrete construction, asphalt paving, street, road and highway construction, structural metal and fabrication work, scaffolding and hoisting and sprinkler contractors.

Contractors involved in environmental cleanup, such as asbestos abatement, lead abatement, petroleum tank removal, and environmental contractors represent a third group of prospects.

Markets

We have identified a number of markets for contractors insurance that have specific programs for roofers, artisan and general contractors and environmental specialists. While we realize that most contractors can purchase coverage to protect their needs through standard companies, sometimes certain classes of specialty contractors, artisans and some general contractors can be fit into special programs available in the specialty market. We are providing information to you that we have received about specialty markets in alphabetical order.

Arrowhead General Insurance Agency, Inc., 6055 Lusk Blvd., P.O. Box 85320, San Diego, CA 921865320; (619) 677-5214; fax (619) 6775222; Web site: www.arrowhead.org (Andrew Barile, CPCU, president, commercial division). This managing general agency has introduced a program through its commercial division for artisan and service contractors offering general liability, inland marine and commercial auto insurance.

Over 50 classes are eligible for coverage under this program.

The maximum

limits for general liability are $1 million/$2 million. Inland marine limits are $100,000 for scheduled equipment and $10,000 for unscheduled. Commercial auto limit is $1 million csl. The general liability, inland marine and commercial auto is written through the Clarendon Insurance Group (A-), and the standalone auto is written through Generali-U.S Branch (A).

The agency solicits risks in the entire state of California. Expansion is being researched and developed in AZ, NV, OR, TX and WA.

Atlantic Star Intermediaries, Inc., 390 N. Broadway, Jericho, NY 11753-2110; (516) 733-7400; fax (516) 681-7488 (Lynne Kensler). This underwriting manager specializes in general liability and umbrella coverage for all types of contractors. The firm has written most of the types of contractors mentioned in the above description of contractors. The firm focuses on heavy construction contractors. It writes joint ventures and owner and contractor-controlled wrap-ups also. Heavy contractors that have been written under this program include: street, road and highway construction, bridge construction, conduit contractors, railroad construction, utility construction, marine contractors, steel erectors, grading and paving construction, concrete construction, excavation and tunneling.

There are virtually no excluded risks because each risk is based on its own merits. Limits for contractors equipment/property/builders risk coverage range up to $150 million.

The firm writes in all states, Puerto Rico and Hawaii. General liability is written by Gerling America (A-VIII) and Commercial Underwriters Insurance Co. (A-X). Gerling writes the property package in conjunction with the general liability. The firm uses many umbrella companies with TIG and Gerling America being the feature markets.

Burns & Wilcox Ltd., 30833 Northwestern Hwy., Ste. 220, Farmington Hills, MI 48334; (248) 932-9000; (800) 521-1918; fax (248) 932-9046 (Steve Allen, senior vice president). This national underwriting manager and specialty broker offers coverage for all types of contractors. Few markets are available for the residential general contractors in California.

Liability limits are $1 million/$2 million/$1 million plus $10 million excess or umbrella. For property and inland marine (contractors equipment floaters), there is no maximum on limits available depending on area of country (some restrictions on wind and earthquake in certain areas). The firm serves agents in all states except AK, HI, ME and NY. Various underwriters are used; all rated A- or better. ECS

Underwriting (Environmental Compliance Services Inc.), 520 Eagleview Blvd, P.O. Box 636, Exton, PA 19341-0636; (610) 458-0570; (800) 327-1414; fax (610) 4588667; Web site: www.ecsunderwriting.com (Christine Weirsky). ECS Underwritings Construction Business Unit provides insurance to a variety of contractors including general, street and road, utility, industrial plumbing, rigging, mechanical, electrical, civil, drilling/geotechnical, paving, renovation, demolition, excavation/grading.

Coverages available include: commercial auto liability and physical damage, commercial general liability, general contractor’s contingent professional and environmental liability, general contractor’s pollution legal liability, pollution and remediation legal liability, property and inland marine, umbrella liability and workers compensation.

For commercial auto, coverage limits are up to $10 million. The policy includes sudden and accidental pollution coverage and attachment of the MCS-90 endorsement. Limits of liability for commercial general liability are $40 million occurrence/aggregate in-house for claims-made coverage and $5 million per occurrence/aggregate for occurrence coverage. Umbrella limits are $10 million in-house with higher limits available. Minimum underlying limits are $1 million/$2 million/$2 million products aggregate. Workers compensation limits are established by statute. Employers liability is included with limits of $500,000. Limits for pollution legal liability are $40 million per loss/aggregate. Limits for property and business interruption are $10 million, with $1 million for pollutant and contamination cleanup. Inland marine limits are $10 million.

Policies are available on a brokerage basis in all states. Coverage is underwritten by Reliance National Insurance Co.

Excess & Surplus Lines Insurance Brokers, Inc., 13848 Ventura Blvd., Ste. A., Sherman Oaks, CA 91423; (818) 9908860; fax (818) 990-4580 (Wayne E. Bernstein, director of marketing). This excess and surplus lines broker provides insurance for artisans, general contractors, roofers and environmental contractors. The firm serves agents in California only. Property and contractors equipment floaters are available. Underwriters include: First Financial, United Capitol, Reliance, Navigators, Century Surety, NIC Insurance and Preferred National.

FIRM, Inc., 385 Clinton Ave., Wyckoff, NJ 07481; (201) 891-8222; fax (201) 891-7931 (Stephen K. Bommer). This excess and surplus lines broker has a program sponsored by the Steel Erectors Association of America open to qualified risks: erectors of structural steel, steel joists, prefabricated buildings or siding, metal stairs and ornamental iron, precast concrete-structural and architectural, and metal decking; fabricators of structural steel, steel joists, metal decking, reinforcing wire/mesh, prefab/precast building, and miscellaneous ornamental iron works; crane sales, wire rope, slings, accessories, equipment, tools and fasteners; crane and equipment rentals, certified welding, millwrights, heavy equipment moving and rigging, and shear stud installation.

General liability limits are available to $1 million/$2 million. Included in coverage is sudden and accidental pollution for hydraulic spills. On-hook riggers liability is a separate policy with $1 million limit. Property, inland marine and equipment coverage is available. Auto coverage and workers compensation included with incidental USL&H coverage are also available. Railroad protective liability and umbrella limits to $5 million or $10 million.

Coverage is available in all states. The SEAA program is written by four regional brokers throughout the U.S.

Hanover Excess & Surplus, Inc., P.O. Box 1411, Wilmington, NC 28402; (800) 672-9006; fax (800) 4265566 (David L. Parker, vice president). This excess and surplus lines broker provides various markets for contractor-related risks. Types of contractors included are general and paper contractors, subcontractors. Coverage is available under preestablished programs for roofers, artisan contractors, landscapers, swimming pool contractors, electrical and plumbing contractors, excavation contractors and contractors equipment rentals.

Limits are established on a risk-byrisk basis. Policies are available in North Carolina, South Carolina and Virginia. Markets used are Scottsdale, Acceptance, Colonia, Jefferson and Preferred National.

Independent Insurance Wholesalers, Inc., 722 S.W 2nd Ave., Ste. 340, Portland, OR 97204; (503) 224-1956; fax (503) 224-3010; email: iiw@iww.com (Bob Stahl, president). This specialty broker writes insurance for environmental contractors, oil/gas contractors, paper contractors, general contractors, roofers. Liability and property coverages are available. Limits are available to $5 million or higher. Unlimited coverage for equipment floaters. Territory served is AK, CA, OR and WA. Underwriters include General Star, Admiral, Agricultural E&S, American Equity, Western World, Nautilus and AIG companies.

M. J. Kelly Co.,4415 E. Sunshine, P.O. Box 231, Springfield, MO 65809; (417) 883-2688; (800) 725-7211; fax (417) 883-7103 (Mike Kram). This excess and surplus lines broker specializes in the small to mediumsized contractor. Limits of liability run from $100,000 to $1 million with umbrellas available up to $100 million. The agency has several markets writing contractors equipment floaters, but excludes hand tools.

The firm operates in Arkansas, Florida, Kansas, Missouri, Oklahoma, Utah and Washington. Major carriers include Aegis, First Financial, Colony, Western World, Guaranty National, Lloyds. John Deere, Essex, Clarendon and American Equity.

Montgomery & Collins, Inc., 5 Forest Park Dr., Farmington, CT 06032-1475; (860) 674-3720; (800) 228-1072; fax (860) 674-3725 (Scott Polley, vice president). This underwriting manager writes a program targeting selected classes of specialty contractors. Types of contractors eligible are: grading, excavation, roofers, utility, plumbing, conduit, dry wall, electrical, pile driving, pipeline, marine, demolition, street and road, sewer, concrete, paving, mechanical and carpentry.

Policy limits for occurrence general liability are available to $1 million/$2 million/$1 million. Umbrella coverage is available up to $10 million inhouse. Higher limits are available from other markets. Agents may access this program through any Montgomery & Collins office. The coverage is written by United National Insurance Co. in all states except AK, CA, HI and NJ.

National Environmental Coverage Corp., 747 Chestnut Ridge Rd., Ste. 305, Chestnut Ridge, NY 10977; (914) 425-2333; (800) 5520230; fax (914) 425-2853; Web site: www.necc.com (Chris Holmes, president). This underwriting manager writes occurrence and claims-made commercial general liability coverage for the following types of contractors: blasting, bridge, crane, demolition, drilling, shoring, equipment rental, under pinning, tunneling and caisson. It also has programs for asbestos abatement, lead abatement, underground storage tank removers and environmental contractors.

Limits are available to $10 million or higher. The coverage is available in all states. Underwriters are various A-rated companies.

Regis Insurance Co., 1031 Old Cassatt Rd., Ste. 201, Berwyn, PA 19312-1151; (800) 355-1280; fax (610) 647-4630 (Joe Burrows, marketing director). This insurer writes tree trimmers, landscaping, residential roofing and siding contractors. The program excludes commercial roofers.

Property and liability limits are available to $1 million per occurrence/$2 million aggregate. Coverage is available in the following states: AL, DE, DC, FL, GA, IL, IN, KY, MD, MA, NC, OH, PA, TN and WV.

Sherwood Insurance Services, 201 California St., Ste. 1000, San Francisco, CA 94111; (415) 956-3236; fax (415) 956-1204 (Phil Mazur or Jim Barnes). This specialty general agent writes all types of contractors: residential, commercial, general, artisans, roofers, crane and rigging and wrap-ups.

Primary, excess and umbrella limits are available. The policies are available in all states and in other countries. Various underwriters are represented including: AIG, Admiral, American Dynasty, Agricultural, American Equity, American National, Century Surety, Chubb Custom, Clarendon, Gerling, Kemper, Legion, Mt Hawley (RLI), Markel (Essex), Monticello, Pacific, Reliance, Royal, Scottsdale, Steadfast, TIG, Tamarack, Tudor, United Coastal, United Capital and Westchester.

Stewart Smith West, Inc., 550 N. Brand Blvd., Ste. 250, Glendale, CA 91203; (818) 265-1959; fax (818) 2650841. This specialty E&S broker writes both general and subcontractors under separate programs. Limits are available for CGL up to $5 million each occurrence/$5 million general aggregate per location/project/$5 million products aggregate. There is a limit of $5 million each claim for the employee benefit liability and $1 million for non-owned and hired auto coverage. The subcontractors program also provides general liability and non-owned and hired auto coverage. Excluded classes in the subcontractors program include: residential graders in California and wood based roofing.

Programs are underwritten by Legion Insurance/Indemnity Co. (Rated A-VIII). The program is offered in all states through any Stewart Smith office.

Surplex Underwriters, Inc., P O. Box 998, Portland, ME 04104; (207) 856-0261; (800) 441-1799; fax (207) 856-0260 (Denise Joy). This managing general agency writes the following types of contracting risks: roofers, including hot tar, welders, excavation, artisans, general and paper contractors and environmental contractors.

Limits for general liability are $1 million/$2 million or higher; property coverage is available to $1 million inhouse; higher limits available. Umbrellas and excess liability and commercial auto coverages are also available.

Territory covered is CT, ME, MA, NH, RI and VT. Coverage is accessed through the firm’s principal office and affiliates in Bedford, NH; Warwick, RI; and Weymouth, MA. Underwriters include Penn-America, United National, American Equity, Nautilus, Great American and First State.

Travelers Property Casualty Cos., One Tower Sq., Hartford, CT 06183; (860) 277-7329; fax (860) 2777301 (Steve Senott, director, construction division). This insurer provides insurance for all areas of construction, except artisan or smaller trade contractors. The latter classes are available through the Select Accounts Department. General liability, property, auto, workers compensation, and umbrella coverages are written. The company writes in all states.

U. S. Risk Underwriters, Inc., Environmental Division, 925-B Capital of Texas Hwy. S., Ste. 235, Austin, TX 78746; (512) 328-3888; (800) 926-9155; (512) 328-9710 (Greg Johnson, director of underwriting). This excess and surplus lines broker writes a program for contractors professional and pollution liability insurance.

The following classes are written: general contractors-design using inhouse architects, engineers or design professionals; design using out-ofhouse design professionals; construction managers and overall project management.

Specialty contractors, such as mechanical, electrical, plumbing, road and bridge, paving, concrete, painting, excavation and tunneling, building, demolition, utility, drilling, and landscape/irrigation with in-house orout-of house design capabilities.

Environmental contractors with inhouse or out-of-house design capabilities, including asbestos and lead abatement, remediation (soil, surface water and ground water), emergency response, indoor air quality, and UST/AST removal and installation.

Limits available are up to $5 million/$5 million. Coverage is available in all states. Underwriter is Zurich Re (U.K.)(A- rated).

Whitcomb Insurance Services, 109 W. Torrance Blvd., P.O. Box 7000919, Redondo Beach, CA 90277; (310) 798-6212; fax (310) 374-8171 (Rudolph Whitcomb, president). This surplus lines broker targets large contractors of all classes, doing residential, commercial and infrastructure construction, both on and offshore. The firm writes general liability and excess/umbrella coverages. It also has markets for equipment floater/property and auto insurance. The office uses various underwriters and operates worldwide.

Copyright Rough Notes Co., Inc. Jan 1998
Provided by ProQuest Information and Learning Company. All rights Reserved

Artisan Contractor

Whether you own a landscaping, janitorial, plumbing, or electrical company, Farmers has insurance solutions that can be tailored to provide full protection for your operation.Loss Control professionals work with you to prevent or to mitigate potential losses.

Farmers can provide you with one-stop, comprehensive insurance protection for all your coverage needs which may help you to have peace of mind.

Our highly dedicated, top-tier Claims professionals are here to get you back where you belong. Let our

 

The Coverages

Here are some of the coverage options that are available to you to help you with your insurance needs:

 

Property and Inland Marine

·      Buildings at Extended Replacement Costs or Actual Cash Values

·      Separate limit for Specified Property (such as Pools, Fences, etc.)

·      Automatic Increase in Building Amount (inflation guard)

·      Contents at Replacement Costs or Actual Cash Values

·      Condominium Unit Owners Coverage

·      Loss of Association Fees and Extra Expense

·      Loss in value of undamaged building portion, demolition or increased construction cost to meet ordinance or law requirement

·      Comprehensive equipment breakdown coverage

·      Coverage extension to newly acquired buildings

·      Fire department service charge and Extinguisher recharge cost

·      Outdoor signs

·      Debris removal or clean up cost

·      Pollutant clean up cost

·      Back up of sewers or drains or appliances

·      Accounts Receivables and Valuable Papers coverage

·      Computer equipment including Media & Records

·      Earthquake or Earthquake Sprinkler Leakage

Crime

·      Employee Dishonesty

·      Money & Securities – from both inside and outside the premises

·      Forgery & Alteration

·      Money Orders & Counterfeit Currency

 

General and Other Liability

·      Operations and Premise liability including parking lot liability

·      Personal and Advertising injury liability

·      Products and Completed Operations liability

·      Contractual and Owners Protective liability

·      Hired and Non-owned automobile liability

·      Employee Benefits Liability

·      Medical payments and Tenant’s Legal Liability

·      Per location aggregate limits