Explanation of Roofers’ Insurance Coverage and Exclusions | Brand voice

Roofers work with equipment worth hundreds of thousands to millions of dollars and take on an even greater responsibility just to make sure the roof will protect the contents of its building.

Naturally, this line of work faces risks that could lead to a large number of lawsuits, complaints and other liabilities, especially in relation to the property of others. For these reasons, a roofing contractor policy is a requirement to perform any type of roofing work primarily to protect the business from huge losses and even extend its protection for its customers.

Below simplifies what constitutes the required set of policies for one type of roof exposure:

First of all, open your toolbox!

Roofing operations such as roofing advice, simple roof maintenance and repair, and the installation of a new roof should be disclosed when obtaining your liability insurance policy. Time to check your gears – are you doing any torch roofing or sunroof projects? You will need to inform your insurer of these risks.

While some insurers may not cover these risks, it is imperative that you disclose these transactions and be covered for all exposures your business faces on a day-to-day basis – unless you are prepared to take on these substantial losses of your business. pocket as they crop up. Failure to disclose these trades will most likely result in denied claims, just like when you need them.

Now, which policy covers what?

  • General civil liability – covers material damage and bodily injury to third parties caused by roofing work. The standard limit for a GL policy is $ 1M per occurrence, $ 2M in total. This means that a single third party claim can be covered up to $ 1 million, while $ 2 million can be covered for all claims accrued per year.

If your employee caused damage to a customer’s property while performing roofing work, since it is damage to a third party property, the liability insurance policy covers your claim. . On the other hand, if any of your employees got injured on the job, it will be covered by the next most important policy –

  • Workers compensation – this is compulsory in almost all states. It protects the owner and / or employees against work-related injuries. It covers medical expenses, lost wages and even death benefits can be paid to the employee’s beneficiary if the work-related incident results in death. However, it is important to note that while injuries sustained on the job may be covered by the workers’ compensation policy, be sure to indicate which states you work in, as some WC policies only cover specific states. Another big advantage of this policy is the ability for homeowners to be included and covered – at a very low cost increment.

Tip: If you are working with contractors, be sure to collect and verify their WC policies. Otherwise, you or the company will be responsible. Why? So many companies do not renew workers’ compensation policies because of the high penalties incurred during the audit of previous years.

To avoid penalties, consider disclosing the number of employees and their gross annual salary. Failure to collect COIs from the 1099s will be considered a regular employee and will therefore total the payroll in the audit. The difference between the actual salary and the declared annual salary by the end of the year will give rise to a refund or overcost of the premium.

  • Professional Liability – this covers legal and professional costs associated with lawsuits and orders caused by third party claims against your professional services. A good example is when you have provided consulting services and the advice or recommendation results in a loss for your client. Most likely, they will come back looking for a resolution and this policy can help mitigate or even save you from possible associated costs.

According to Liability of entrepreneurs, this is usually not included in most general liability policies as it is a separate / stand-alone coverage. This is highly required for consultancy services such as roofing consultancy.

Did you know?

  • Professional liability covers claims against you for negligence, even if you did not make a mistake.
  • It also covers work performed worldwide as long as the lawsuit is filed in the United States or Canada.
  • This includes coverage for services provided by your employees and temporary staff.
  • Commercial property – this is optional but fundamental to protecting your business assets from loss caused by theft, earthquakes, fires and weather damage. This covers the property and machinery inside the building in which the business is located. Content such as computers and other tools inside the premises may also be covered, but it is important to note that you can get coverage for its content at actual cash value and not Replacement cost. This means that depreciation charges will be considered to replace or reimburse the covered content. An obvious exclusion is that of damage caused by wear and tear.
  • Commercial automobile – this is highly required for vehicles used to transport materials, tools, employees, or for any business purpose. Although you can use your personal vehicle for simple business tasks, it is still important to obtain commercial auto insurance for broader coverage, as personal auto insurance will not cover claims for incidents caused by business operations. . This will cover full and collision damage. Comprehensive coverage includes theft, weather damage and its contents.

A commercial automobile policy also covers underinsured drivers in the event of a collision which also comes with limits of liability. If there is more than one driver, this policy has the option of covering “any driver” at a higher cost compared to the “single driver” commercial automobile policy.

What are the exclusions?

It is important to understand the exclusions that apply in a roofing contractor’s business and what most policies do not cover. Certain exclusions may make you ineligible for the type of work you do or the claims you submit. Read some of the common exclusions on insurance policies before you complete any work rather than submitting a claim and having to endure denials at the end.

  • Open Top Exclusions – Many insurance packages do not cover damage to building contents when the top is open. In other words, during repairs, if the roof is open and the interior equipment is damaged by the element, it will not be covered by your insurance.
  • New construction – some insurance plans do not cover new construction, especially if most of the work you do is roof repairs. However, specialist agencies have out-of-the-box connections when their clients need this coverage. Make sure you connect with a reputable insurance provider and disclose all operations to cover all the bases.
  • Subcontractor work – if you hire a subcontractor to do any type of work that does not have their own insurance package, your insurance provider may not insure any of their work or yours . Remember to collect and verify insurance certificates before starting the project to ensure smooth operations.

Note that the exclusions applied to your roofer’s insurance policy are just as important as obtaining coverage. Whether you work as a subcontractor or a contractor, the risks involved in this industry will also require a tailor-made policy depending on whether your company deals more with residential or commercial work; small enterprises or industrial projects; and whether you provide new construction or repair and renovation services.

You cannot benefit from the advantages of a roofer insurance package now – but it’s better to have it when you don’t need it rather than NOT having it when you need it most! We hope this article has helped you better understand the coverages and exclusions.

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Justin D. O'Neill