We just came across a strange claim that involved a restoration contractor we felt was worth sharing: a restoration contractor was working at an apartment building and one the employees had a master key set that went to several apartments at the complex. One afternoon when he left for lunch and accidentally left the keys on his ladder; when he returned the keys had been stolen. When he reported the loss, the apartment complex had to replace all of the locks that could be accessed by the stolen keys.
So the question is whether or not a general liability policy will provide coverage for a claim like the scenario above. Part of the issue is because there is not actual physical damage to the locks. However, what most people don’t realize is that the definition of property damage within a general liability policy includes loss of use of tangible property that is not physically injured. So a standard general liability policy would actually pay to have all of the doors locks replaced.
The next part in question would be for the payment for replacement keys for all of the new locks. In the scenario above, a general liability would most likely not provide payment for the new keys. A general liability policy has an exclusion for personal property in the care, custody, and control of the insured. Since the keys were in the possession of the restoration employee, the policy would not provide the coverage.
Please keep in mind that every insurance policy is different. You should talk to your agent about your specific policy, its endorsements, and exclusions to ensure your company would be covered by the scenario above.
Business Income (or business interruption insurance) protects restoration contractors from the loss of income when their facility suffers a disaster that forces it to close. While a property insurance policy covers the physical damage or loss to a restoration contractor’s property, a business income insurance policy will cover the business for lost profits and expense payments.
This type of policy is usually purchased in conjunction with a property insurance policy. An important note is that a business income policy will only pay if the claim is one that is covered by the property policy.
A business income policy can include coverage for the following:
- Profits- Profits that would have been earned.
- Fixed Costs- Operating expenses and other ongoing costs.
- Temporary Location- Some policies provide extra expense coverage to help with moving to and operating from a temporary storage location.
- Extra Expenses- Reimbursement for additional expenses (beyond normal costs) a business incurs to continue operations.
All business income policies will include a specified time period for which the insurance company will provide coverage. Policies may provide coverage for as little as 3 months while some include coverage for up to 2 years.
If you have questions of whether your restoration company should purchase a business income policy, we recommend you speak with one of our experts agents. We can evaluate your company’s operations to determine if a business income policy is right for your company.
If one of your restoration company’s employees were to hit somebody while driving a bobcat or bulldozer do you know if the claim would be covered by general liability or your commercial auto policy?
We have found that many of our clients are unsure of where to find the liability coverage for large pieces of equipment that are typically designed to be driven on the road. So we want to use this post to shed some light on what insurance companies feel is commercial auto and what is covered by the general liability policy.
The general liability policy provides for “mobile equipment.” Mobile equipment as defined in a standard general liability policy consists of the following:
First let’s look at what is not mobile equipment. This will belong on your BAP. The first category is classified as autos. This includes:
- bulldozers, forklifts and other equipment designed primarily for use off public roads, including vehicles on crawler treads.
- vehicles used primarily to give mobility to loaders, diggers, air compressors, and similar equipment.
- vehicles that are self-propelled or not self-propelled. Not self-propelled could be a trailer.
For any of the items described above, an accident where your company is liable will be covered by the general liability policy.
Any “auto” claim will not be covered by the general liability policy, but rather a commercial auto policy. An “auto” as defined by a standard policy as the following:
- self-propelled vehicles with permanently attached equipment, if designed primarily for snow removal, street cleaning, or road maintenance other than construction or resurfacing.
- cherry pickers and similar devices mounted on an auto or a truck chassis.
- air compressors, pumps, generators, welding units, building cleaning units and other similar items.
If you have any additional questions in regards to what is covered by your auto policy and your general liability policy, please feel free to give our office a call.
- Never assume the other business has liability coverage and obtain a certificate of insurance to verify their insurance coverage.
- As a part of a written contract, demand a copy of the additional insured endorsement and review it with your insurance agent and legal representative.
- Understand what your additional insured coverage status covers and look at your liability policy. There may be gaps in coverage that can be easily fixed (before the relationship starts).
- Read the contract requirements and write the contract requirements carefully to make sure your business is not jeopardizing its own coverage in agreeing to add additional insureds and know what you are extending when you agree to add additional insureds. Similarly, know what you are demanding when your business asks for that status from another business on their business insurance policy.
As an agency that only insures restoration contractors, we feel that no one will work harder at understanding the unique exposures of your business.
Some brokers just sell insurance we partner with you to educate and design a comprehensive insurance solution.
39 W. 9000 S.,
Sandy, UT 84070