- Certificate of Insurance – A certificate is essentially a two page insurance summary that is meant for “informational purposes only”. First off, most people have no idea that there is a second page of the document. This page simply lets you know a bunch of other disclaimers. Secondly, while the document is still somewhat useful, should not be relied upon as the last word regarding another companies insurance coverage. Whenever you hire a subcontractor, be sure you obtain one of these documents before work begins and keep it on file. Also see the Certificate Management Section.
- General Liability – General is a very accurate term in that this policy “may” cover a lot of your general exposures. This policy will write a check to someone else (3rd party). It will also have lots of exclusions. Make sure you read the exclusions of your policy very carefully. Most contractors will automatically have work like EIFS, Demolition, Underground Excavation, and work with explosives automatically excluded. If you have an operation that is doing this kind of work PLEASE MAKE SURE it is not excluded. I have personally seen silly things like a demolition contractor who had a “demolition exclusion” on his policy. I suspect the price was really cheap! Also note that General Liability policies specifically exclude “your work.”
- Inland Marine coverage – Inland marine has nothing to do with boats. Yes, the name makes you think of boats. That is because centuries ago (and still today) Inland Marine “forms” were used to cover cargo being shipped between cities via ship. This same “form” is used to cover items like your tools, and equipment that may move from job site to job site. You can have “scheduled” and “unscheduled” tools. Scheduled means you have a detailed list or inventory. Unscheduled does not require a detailed list but is slightly more expensive. An installation floater is also a type of inland marine policy.
- Installation Floater – The installation floater is purchased by the contractor (you) and is generally designed to cover equipment, supplies, materials, etc. that have been purchased, sent to the job site, but have not been installed or accepted by the GC or project owner. Think of a large boiler or HVAC compressor that you are going to install that is sitting on the job site. Should something happen to any of these materials, such as a large crane was to fall on them, you may be able to file a claim and receive a check to replace the damaged items. Also see Builders Risk.
- Builders Risk – This is usually purchased by the project owner that will cover the building and equipment that has already been installed and accepted. This policy usually pays the property owner. Many times the owner will ask the contractor or GC to be a “nice guy” and to purchase the policy directly. This works great until there is a claim. If a claim occurs, the owner may not like the coverage that was purchased or suddenly feels the amount was too low resulting in you, the contractor having a very bad day. Kindly point out this detail to the owner and ask them to call an agent (yours for example) to obtain the Builders Risk coverage. This way the owner signs off on the policy, not you. Also note there is a HUGE difference between new construction and renovations when obtaining a builders risk policy. Make sure if you are performing renovations, that the agent is aware. Also see Installation Floater
- Occurrence – This is typically what “triggers” a commercial general liability policy in construction. It is said to be an accident “including continuous or repeated exposure to substantially the same general harmful conditions.” In construction, it can take weeks or even years for a problem to be discovered. This is why you have an “occurrence” rather than an “accident” that will usually trigger the policy to respond. This is also a common homeowners provision.