Month: September 2017

Concrete Contractors and Silica:

The field of Concrete Construction is extremely complex. This type of construction is subject to the ASTM International Concrete and Construction Standards (The American Section of the International Association for Testing Materials) as well as the American Concrete Institute Standards for Design and Construction.

Each build differs with the type of cement, sand and aggregates used to mix the concrete.  The contractor must consider the moisture content, the strength of the mixture, the chemical reaction abrasion test result, and numerous other factors which go into planning a build. One of those factors is the use of silica in the process of making concrete and removal of silica. This mineral is about to make the job even more complex and  may affect the bottom line due to increased need and costs for insurance coverage which shields you from liability for it’s use.

All concrete contractors need commercial insurance including commercial general liability and worker’s compensation which are required by law in most states. It is important to remember that general liability does not cover all insurance needs. You will also need Commercial Property, Commercial Auto, Inland Marine for tools and equipment and/ or Goods in Transit and Installation.

Additional recommendations not specific to  the installation of concrete, would be Employee Dishonesty, Employee Benefits Liability, Employee Related Practices, Loss of Business Income with Extra Expense, Stop Gap Liability, Umbrella Insurance and Professional Liability for design and installation. You also need Heavy Equipment Insurance if your commercial auto does not cover large vehicles such as a cement mixer truck, dump trucks and other heavy equipment you use.

Specific Industry related recommended insurances would include Contractors E&O, (This is not the same as Professional Liability insurance) E&O covers you when you make a mistake and are negligent during the building process.  Along with E&O you need a custom combination of the three types of insurance below to protect your business from environmental threats.

  • Products Liability
  • Environmental Impairment Liability
  • Pollution Control

The need for these insurance types has come about with the rise in litigation surrounding the construction industry as a whole and regulations  imposed for each specific industry in the field of construction So you may need all of these separately or combined in a BOP depending on what your carrier offers.

Due to health concerns for workers and the public, OSHA recently adopted new rules in regard to airborne (respirable) silica. Silica is one of the varying components contained within the sand, rock and the cement used in the concrete mixture by contractors.   This rule will significantly impact Concrete Contractors. Crystalline silica (SIo2) is the type used to make concrete as opposed to amorphous silica.  All of the 5 types of crystalline silica are listed as known occupational carcinogens by the CDC.  Crystalline silica is hazardous when it is used in construction processes such as blasting, cutting, chipping, drilling and grinding which make the silica “respirable”.  It works much like asbestos which is not hazardous unless disturbed, and then the substance becomes friable. When silica is disturbed by construction processes it becomes “respirable” and workers breathe silica in and it becomes hazardous and can  cause Silicosis and many severe lung related diseases which can be fatal in addition to cancer.

The Insurance and Risk Management Institute (IRMI) has predicted that the litigation surrounding silica will rise and result in increased environmental litigation much like the issues surrounding toxic mold did and points out that as Silica is a known carcinogen while mold is not. Aside from IRMI’s prediction silica seems to be more akin to asbestos than mold in some ways. According to the Department of Labor Construction Workers as a whole have an anticipated death rate of 1.82 as opposed to metal mining where the rate is the highest a 69.51%.  But that figure could be categorically higher for concrete workers ( the study was not broken down to examine different types of construction workers) as their exposure to respirable silica is frequent, due to contact with the components used to make concrete and resulting concrete dust, while it is being mixed, installed, poured, leveled, troweled edged, brushed finished and cut to specifications.  Workers are also exposed to the dust during the removal of old concrete from a construction or demolition site or during remodeling.

As pointed out by IRMI, the growing numbers of silica litigation could cause an exclusion to be carved out by insurance carriers for silica just as one was created in regard to asbestos. So look for an exclusion specifically for silica in your general liability policy to become a reality in the near future throughout the construction industry but particularly in regard to concrete contractors and workers.  Additionally insurance carriers could deny coverage based on the total pollution exclusion if a court finds that silica is a pollutant. It is very likely that silica would be considered a toxin.

Despite these issues, it does not mean that liability coverage will not be available if silica is used during the construction project. It means:

  • Concrete contractor will need to carefully review their existing policies and question your agent whether coverage for silica exposure is specifically excluded or there is a pollutant exclusion. If so,
  • Concrete contractors will have to purchase an endorsement, rider or supplement  that covers silica  either as an environmental hazard or a pollutant and adds coverage in addition to  any exclusion in  their existing CGL policy; or purchase a new BOP designed to cover environmental pollution and  pollutant liability
  • Insurance carriers will want safety plans that comply with specific OSHA regulations and the new silica rule to prevent silica exposure through the use of safety equipment and limiting time of exposure to be part of your everyday operations.
  • Expect higher workers compensation premiums as awareness arises and workers are diagnosed with silicosis or other related diseases.
  • Compliance with OSHA regulations to prevent or minimize exposure will be critical and will hopefully reduce the amount of your premiums.
  • Products liability will be necessary because the concrete mix you are making is actually a product you made or “manufactured” and you would have liability for it; if it is harmful to the public.  You also have liability during the demolition and removal process for old concrete that you encounter as it will become respirable at that point: and you will have liability for any other toxins uncovered during the removal. If you purchase the concrete from an outside source, you may  also still have some liability for using and installing it and recommending it to the client just as asbestos manufactures and installers were liable.

CNA Insurance offers a Subcontractors Errors and Omissions Policy with Pollution Liability which is endorsed by the America Society of Concrete Contractors.  Their Pollution Liability Coverage includes asbestos, mold and respirable dust or Silica. Travelers also offer Contractor’s Edge policies.  Many other carriers have policies that you can purchase additional supplements and endorsements for which can provide for coverage of these hazards for silica and/or other toxins which have exclusion in your CGL policy.

Handyman Insurance Exclusions

Handyman Insurance Exclusions and how to address them.

Read the best information about handyman insurance at myinsurancequestion.com

Handyman services fill a market niche that seems a miracle to some of us who just aren’t handy at all; or those who have reasons why they can’t do certain household projects on their own. If one finds a handyman (or handyman service) that is reliable, reasonable, thorough and knowledgeable; it is a treasured find and people want to keep using their services in the future.   Smart and savvy Handymen or businesses can capitalize on this public sentiment.  One way to build trust with your client base is to be prepared in case something does go wrong by having insurance that covers you, the insured, and the customer who is considered the third party.  Accidents happen inevitably, even when you take all safety precautions possible so you need to be covered for all possibilities that you might incur liability for.

Business Liability Category: Artisan Contractor

SIC Business Insurance Codes:

  •   1521- General Contractor- Single Family Homes
    •   1522- Residential Builders- Other Than Single Family
    •   1799- Special Trade Contractor

NAICS Liability Classifications:

  •   236118- Residential Remodelers
    •   238350- Finish Carpentry Contractor
    •   238990- All Other Specialty Trade Contractors

Business ISO General Liability:

  •   Code: 95625- Handyperson

Common Workers Compensation Class Codes:

  •   5645- Carpentry and Construction- Residential

A handyman business may fall into any of these classifications.

Just as in any other type of construction business, General Commercial liability is your starting point or foundation and is normally required by state law.

Each Commercial General Liability Policy has its own exclusions based on the type of work you specifically perform.

Three exclusions are commonly a part of a Commercial General Liability Policy for construction based industries and handyman businesses These exclusions are of concern and can cause you to lose clients and gain a bad reputation in the community because clients can be left with a financial burden if your insurance does not cover their third party claim based on one of these exclusions listed below:

  • Completed Operation
  • Excluded operations
  • Residential operations

 

Most General Liability policies are considered claims made or completed operations policy.  Completed operations basically means that once a job is done if no claim is filed  while the work is being performed, then  there is no coverage after the jobs completion.  Alternately, in  a claims made insurance policy a claim can be made at any time while a policy is in force and the policy coverage can be retroactive at renewal each year. Completed operations are less expensive than a claims made policy but in the event of an injury to your client, their family or a guest in the home after the job is over, it will be money well spent rather than paying third party claims out of pocket and having an irate client who can affect your bottom line and tarnish your reputation for backing your work. Even when the insurance carrier does not provide coverage due to an exclusion you are still liable for a third party negligence claim judgment if one is entered against you.

Excluded operations is where a specific  type of activity is excluded such as roofing or plumbing and you have contracted for a handy man job repairing one of the excluded activities, thus leaving you with no coverage at all under this policy for this activity.  Again if liability arises, you or the business will usually be liable not the insurance carrier.  If you have such and exclusion you either need to purchase a supplement or have a new BOP policy written which includes this type of activity.

Residential operations  exclusion.  Most handyman jobs historically were for homeowners but that has changed as trades become more specialized and licensing more regulated. So this exclusion specifically means there is no coverage for any work performed on residential property.   So it is baffling why any handyman policy would include such an exclusion, but they do. This exclusion can sneak up on you as the exclusion is sometimes listed in the section under excluded operations which can contain a number of exclusions rather than as a separate exclusion. In actuality it will still preclude  coverage all work or repairs performed on on a residence. If you don not work on residence it will not be relevant.

A diligent handyman owner should thoroughly inspect the GLC policy to determine if there are any references to any exclusion of any sort and make sure you understand the exclusion and what that means to your business.   Sometimes the exclusions   listed in the policy are referenced only by the ISO form number. The ISO form for each exclusion should be specifically attached to your policy.  If not, make sure you obtain a written copy of each  separate exclusion form listed as a  number and examine it until you understand what is excluded before you proceed.

For each exclusion you do not want in place you will need to obtain an endorsement, rider or supplement to cover that liability. Or you can have your whole BOP rewritten, which is advisable if you are entering into a new aspect of construction;  and make sure you inspect the policy after revisions are made and determine that they include everything you want covered versus excluded.

Remember an insurance policy is a contract and you are presumed to have read it before signing.  The Insurance Carrier specifically advises you of this when you enter into a an Insurance contract.

While you are reflecting on the nuances of your policy take the time to consider new products which might be beneficial such as, electronic data/ cyber security/data intelligence plan, or pollutant /environmental endorsement, and/ or drone coverage if you are using the technology in your business.

Taking preventative steps can save you a lot of money in the long run and will help cement your relationships with your clients.