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Nail Down Quality Roofing Contractors Insurance
According to the Bureau of Labor Statistics, roofers have some of the highest rates of occupational injury, illness and death compared to other jobs. Roofers must also contend with property damage, both at job sites and during supply deliveries.
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If you’re an experienced roofer, you know that insurance is key to managing risk and protecting against financial losses from property damage, liability claims and work-related accidents. Some states even require contractors to submit proof of workers’ compensation, property and general liability insurance in order to obtain a license.
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Whether you’re a seasoned contractor or just getting started, it’s important to work with an insurance professional who knows your business and can help you choose the right coverage for your company. This article highlights some of the most important coverages you’ll need.
Commercial General Liability
As a contractor, you can be held liable for any property damage or injuries that occur in the course of your work at someone’s house or on a job site. For example, if a customer trips on a ladder, a bundle of shingles falls off a roof or improper installation results in damages, you could face costly claims.
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Commercial general liability (CGL) insurance protects you against financial losses for property damage, bodily injury, medical expenses, and advertising and personal injury stemming from the operation of your business. It covers your work on someone else’s property or on your company’s premises. CGL also protects you against personal injury such as copyright infringement, misleading advertising, libel, slander and use of another’s intellectual property.
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CGL coverage has various limits, depending on your risk and the size of your business. A policy with a $1 million limit would pay up to $1 million in legal expenses and damages during the period of coverage (usually one year).
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However, CGL won’t cover bodily injury if one of your employees is injured on the job. For that, you’ll need workers’ compensation insurance.
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CGL also doesn’t cover professional liability or employment practices liability claims. Professional liability refers to bodily injury and property damage claims arising from your professional errors, omissions or negligence. Employment practices liability refers to employment-related claims against your business, such as discrimination, wrongful termination, sexual harassment and retaliation. These additional liability coverages can be purchased separately or may be included in a bundled policy.
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Even if your state doesn’t require you to carry CGL, most general contractors and project owners will ask for proof of coverage before signing a contract. CGL coverage is also usually required if you want to open a bank line of credit, qualify for a loan or rent a space. It’s often thought of as the single most important coverage for business owners because one expensive lawsuit could spell the end of your company if you aren’t adequately insured.
Workers’ compensation
As you might imagine, workers’ compensation is an important coverage for roofers. Workers’ comp helps your employees if they get sick or are injured on the job. It pays for lost wages and covers medical and rehabilitation expenses while the employee recovers. Unless you’re a sole proprietor, your state probably requires you to carry it. You may also be required to furnish proof of workers’ comp coverage in order to maintain your license.
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The type of industry you work in, the number of employees you have and your claims experience will determine availability and coverage costs. High-risk trades such as roofing are often hard to insure, especially if you’ve had a recent claim or you’re just starting your business.
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If you’re having trouble finding coverage in the standard workers’ compensation market, you may need to buy insurance through an assigned risk pool. These government-run pools were set up as an alternative source of coverage for employers who have been declined because of high risk or too many claims. An insurance professional who specializes in workers’ comp will be able to help you find coverage in the assigned risk market.
Property insurance
Your business property, vehicles, equipment and tools need to be insured as well. This includes any building materials you store on your premises or deliver to customers’ homes or job sites.
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Commercial property insurance covers the property located at your business address. It protects against fires, theft, vandalism and various weather-related perils (except floods and earthquakes, which are largely sold separately). Note that most commercial property policies will not cover property being transported or stored off site. For that, you’ll need inland marine insurance.
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Inland marine insurance is designed for contractors who transport equipment, tools and materials to job sites and store them there. This is especially true for roofers, who have shingles and other roofing material delivered to job sites and transport everything they need for the job on their truck.
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Commercial auto insurance is a must for company-owned vehicles. Much like a personal auto policy, it provides liability, bodily injury and property damage coverage. If your workers use their own vehicles for jobs, you should also look into nonowned commercial auto coverage.
BOPs bundle the coverage you need
Business owners' policies (BOPs) bundle many of the individual coverages you need into one standard policy. Most BOPs include CGL, commercial property and business interruption insurance. Another type of bundled policy, called a commercial package policy (CPP), gives you more flexibility in designing the coverage you want. An insurance professional can help you decide if it’s better to bundle your insurance or purchase the policies you need separately.
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Large construction projects involving multiple subcontractors may have a controlled insurance program, known as a wrap-up. These policies are purchased by the project owner or general contractor and wrap up into one policy all of the insurance needed by everyone working on the job. They usually include CGL and workers’ compensation insurance. You may be able to add other coverage as well. Your agent or broker can review those policies and your contracts to help you avoid insurance gaps.
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With construction booming, there’s no lack of work for roofers, but that brings its own set of challenges: scheduling work, supervising crews, securing materials and meeting deadlines. In the rush to get everything done, don’t neglect your insurance needs. Roofing is a risky business, but you can manage those risks by following proper safety requirements and making sure your business is adequately insured.