As an owner, you are responsible for knowing and understanding the requirements and other local regulations that must be incorporated into your construction project or the maintenance of your property. Therefore, it is crucial to have an insurance broker to help you obtain the insurance policies that will meet your insurance needs to face possible eventualities typical of this type of construction business, especially in the context of the Scaffold Law in force in the State of New York, which gives absolute responsibility to construction owners for any incident within the construction site.
In addition to this context, it is becoming increasingly common for insurers to attach exclusions to umbrella policies to avoid paying large claims (e.g., Labor Law claims), it is critical to know whether your general liability and umbrella policies contain any such exclusions. The state of the underwriting market has made it exceedingly difficult for insurance brokers to convince underwriters to remove such exclusions, and it may not be possible in some cases.
As such, it is increasingly important to implement sound risk management and risk transfer procedures, such as reviewing contracts for appropriate indemnification and hold harmless language, as well as responding with urgency to the insurer’s loss control recommendations and reviewing the insurance policies of contractors performing work on their buildings.
You should make sure that the contract lists the building, the board and the property manager as additional insureds. You will want to obtain a certificate of insurance and, depending on the situation, you may need to obtain even more. Often the certificate will say something along the lines of “The certificate holder is an additional insured under the written contract.”
Should you file a claim with my builder’s risk coverage and my general liability insurance?
It depends.
Both general liability and builder’s risk insurance can cover property damage caused by a subcontractor.
In cases where coverage overlaps, filing a claim on a builder’s risk policy to pay for property damage can help keep your general liability claims history clean with your insurer. A clean claims history helps keep the policyholder’s insurance premiums low.
General liability coverage is an ongoing expense. Clients are likely to require you to carry general liability insurance to pay for damages if a client is injured on a construction site or if you damage a third party’s property. After all, a construction site is a risky place.
If you are sued for property damage occurring on a covered site (usually the construction site), your general liability policy will cover attorney’s fees, court costs and any settlement.
Main coverages you should have
The two main ones are general liability and workers’ compensation. Aside from these, it is wise to have an umbrella policy, as well as construction risk coverage.
Having these coverages and policies is convenient, but making sure there are no exclusions that apply is what makes the right broker make the difference. You want your broker to review these things and make sure you are being protected.
The contract and contract language are crucial.
