If you are a roofer and are engaged in remodel/repair work or new construction, you owe it to yourself to become familiar with the ins and outs of commercial general liability insurance that is specifically designed for roofers.
Commercial general liability (CGL) insurance is a basic necessity for any competent construction operation and in many cases it is required, either by law or by virtue of the fact that many desirable contracts require such coverage.
If you are sincere in your desire to do the best work possible and avail yourself of the best jobs available, CGL will factor into your business planning.
Roofers are a particularly high risk in any insurance venue and CGL is no different. Working in an environment that has a history of high yield claims. Roofers face some of the highest CGL insurance premiums in the construction professions.
The heightened risk profile for roofers is twofold.
First, roofers work in an elevated environment that makes the likelihood of materials, tools or individuals falling from a height more likely. This aggravates the risk profile of the insured to a degree that requires a commensurate increase in insurance premiums.
Second, a roofer’s job is all about keeping water out of a building in order to protect the contents therein. Should those efforts fail in some way, the roofer and his company will likely be held to account.
This places the professional roofing contractor in the unenviable position of being forced to purchase general liability insurance for a higher risk operation when other artisan builders can expect more affordable terms.
But given these realities, roofers, more than many other construction operators, need to seriously consider purchasing a quality commercial general liability policy that is specific to their needs in order to avoid exposure to these well-known higher risks. After all the increased cost of these policies reflects the increased likelihood of something going wrong and any prudent business person would opt to protect themselves from the consequences of that possibility.
So what is general liability insurance?
…and, more specifically, how can it be designed to provide the best protection for your roofing operation?
Commercial general liability insurance is in many ways the foundation of a comprehensive risk mitigation strategy for any business. It provides basic protection from a variety of potentially catastrophic risks that any building contractor can face. When you engage in a contract to build or remodel a structure there are a number of hazards put into play that can easily result in property damage or personal injury on the job.
CGL does not cover injuries to workers employed by the company, that would be covered under another form of liability insurance, worker’s compensation, which should be used to augment CGL in a comprehensive business insurance plan.
Modern CGL policies are essentially split into three parts, coverage A, B, and C.
Premises and Operations (Coverage A)
As we all should know, the owner or tenant of a building may be held liable for damages if a member of the public is injured, or if property of others is damaged because of a condition in or arising out of the premises. The same is true for your location of operations, meaning a job site.
Job sites are often populated with people who are not working specifically on site. Realtors, bank inspectors, neighborhood kids can all wonder onto a job site, placing themselves at risk before anyone can prevent it. Should their vehicle be damaged or should they become injured in some way, the liability will flow to the person or persons who have the contracts to perform work there.
One area of interest in Coverage A to roofers is open roof water damage. During tear-off and re-roof operations efforts to keep water out of a building can fail and having coverage for that possibility should be considered.
Also if you are involved in torch-down or hot tar operations be sure your policy covers you for those risks.
Coverage A is designed to provide coverage for these types of exposures.
Products/Completed Operations (Coverage B)
In construction, products don’t play as big a role since these aren’t manufacturing operations, but completed operations can be a big risk. This coverage comes into play after you have completed the job and something goes wrong. The classic for a roofer occurs when a few months after the job, the owner calls to tell you that the roof you put on is leaking and it destroyed his antique stamp collection that is worth $150,000. The completed operations portion of Coverage B can help protect you in this situation.
Also included in Coverage B is often what is called Personal/Advertising Injury. What this covers are slander and libel claims that may be made based on advertising or even worker conversations that cause perceived harm to any individual or company that may file a claim. Unauthorized use of another’s advertising ideas, copyright infringement and malicious prosecution are other obscure areas of risk that may arise and would be covered.
Medical Payments (Coverage C)
This provides limited coverage for medical payments and includes payments for injuries sustained by a non-employee that is caused by an accident that takes place on the insured’s premises or on a job site. This type of coverage can be triggered without legal action and therefore provides for prompt settlement of smaller medical claims without litigation. It pays for any necessary and reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations.
It should be noted there is no defense or legal liability coverage in Coverage C—as there is with Premises and Operations (Coverage A) and Products and Completed Operations (Coverage B) —since coverage is provided on a no-fault basis.
These are some basics that should be understood by roofing contractors looking for CGL coverage. Remember that general liability is only part of the insurance plan you should have in place for your business. Other elements include worker’s compensation and commercial automotive insurance at a minimum.
Talk with an insurance professional that is well versed in general liability in addition to having a strong understanding of the building trades in order to get the best coverage possible for the most reasonable price.