Roofers Insurance Coverage and Exclusions Explained | Branded Voices
Working with equipment worth hundreds of thousands to millions of dollars, roofers take on an even greater liability by making sure the roof protects the contents of the building.
Obviously, this industry is exposed to risks that can lead to a large number of lawsuits, complaints and other liabilities, especially with regard to other people’s property. On these grounds, a roofer’s policy is a requirement for performing any type of roofing work, primarily to protect the business from huge losses and even extend protection for its customers.
Below is a simplification of the package of policies required for a type of roofing:
First open your toolbox!
Roofing work such as roof advice, basic roof maintenance and repairs and the installation of a new roof should be stated when obtaining your liability policy. Time to check your gears – are you running torchlight or open roof projects? You should inform your insurer of these risks.
While some insurers may not cover these risks, it is imperative that you disclose these operations and be covered for all the risks your business faces on a day-to-day basis – unless you are willing to pay these significantly hefty claims out of pocket because they arise. Failure to disclose these operations will most likely result in denied claims, just like when you need them.
Which policy covers what?
- General liability – this covers damage to third party property and personal injury caused by roofing work. The default limit of a GL policy is $1 million per event, totaling $2 million. 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 has caused damage to a customer’s property while performing roofing work, as this is third party property damage, the roofer’s liability policy will come into effect to cover your claim. On the other hand, if one of your employees is injured on the job, it will be covered by the following main policy:
- Work allowance – this is mandatory in almost every state. It protects the owner and/or employees from work-related injuries. It covers medical expenses, lost wages, and even death benefits can be given to the employee’s beneficiary if the work-related incident results in death. It is important to note, however, that while workplace injuries may be covered by the Employee Compensation Policy, be sure to include which states you work in, as some WC policies only cover specific states. Another great advantage of this policy is that the owners can be included and covered – at a very low cost increase.
Tip: If you work with subcontractors, be sure to collect and verify their WC policies. Otherwise, you or the company are responsible. Why? So many companies fail to renew employee compensation policies because of the hefty fines imposed by the audit of previous years.
Remember to disclose the number of employees and gross annual salary to avoid fines. Failure to collect COIs from 1099s is considered permanent employees and will therefore sum the payroll in the audit. The difference between the actual salary and the declared annual salary at the end of the year results in a refund or an additional premium cost.
- 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 consultancy services and the advice or recommendation results in loss to your client. Most likely they will come back looking for a solution and this policy can help you reduce or even save the possible associated costs.
According to Contractor Liability, this is usually not included in most general liability policies as this is a separate/stand alone cover. This is much needed for consultancy services, such as roofing advice.
Did you know?
- Professional indemnity covers claims against you for negligence, even if you were not at fault.
- It also covers work completed worldwide as long as the suit is brought to the US or Canada.
- This also applies to the coverage of services provided by your employees and temporary workers.
- Commercial Property – This is optional but essential to protect your company’s assets from loss caused by theft, earthquakes, fire and weather-related damage. This covers the property and machinery in the building in which the company is located. Content such as computers and other resources on the property may also be covered, but it is important to note that you may be covered for their contents at their actual cash value and not Replacement Cost. This means that amortization costs are taken into account to replace or reimburse the covered content. An obvious exclusion is damage caused by wear and tear.
- Commercial vehicle – this is highly required for vehicles used for the transportation of materials, tools, workers, or any other purpose associated with the business. While you may be using your personal vehicle for simple business chores, it is still important to purchase commercial auto insurance for broader coverage, as personal auto insurance does not cover claims for incidents caused by business-related activities. This covers extensive and collision damage. Comprehensive coverage includes theft, weather damage and its contents.
A commercial auto policy also covers underinsured drivers in the event of a collision that also comes with limits of liability. If there are multiple drivers, this policy has the option to cover “every driver” at a higher cost compared to the commercial “one driver” car policy.
What are the exclusions?
It’s important to understand the exclusions that apply in a roofer’s business and what most policies don’t cover. Some exclusions may make you ineligible for the type of work you do or the claims you make. Read some of the common insurance policy exclusions before completing any work rather than making a claim and eventually having to accept denials.
- Open roof exclusions – many insurance packages do not cover damage to the contents of the building when the roof is opened. This means that 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 packages will not insure new construction work, especially if most of the work you complete is new roofing. However, specialized agencies have connections ready for when their clients need this coverage. Be sure to contact a reputable insurance company and disclose all operations to cover all bases.
- Subcontractor work – if you hire a subcontractor to perform any type of work that does not have its own insurance package, your insurance company may not insure any of their work or yours. Remember to collect and verify insurance certificates before starting the project to ensure operations run smoothly.
Keep in mind that the exclusions that apply to your roofer’s insurance policy are just as important as getting coverage. Whether you operate as a subcontractor or a contractor, the risks in this industry also require tailored policies depending on whether your business is more involved in residential or commercial work; small companies or industrial projects; and whether you provide services to new construction or repair and refurbishment.
You may not get the benefits of a roofers insurance pack now – but it’s best to have it when you don’t need it instead of NOT having it when you need it most! We hope this article has helped you learn more about the coverages and exclusions.
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