Tag: Environmental Liability

Carpet Cleaning

Upholstery and carpet cleaning: Insurance challenges in water remediation and storm damage cleanup

Cleaning carpet and upholstery, while unpleasant at times, is generally a safe business activity for both the owner of the business and the employees of the carpet cleaning business. Some personal safety considerations exist while on a job site, and injuries do occur, but it is not a routinely dangerous or risky type of work.  However, this factor can significantly change when companies engage in water related disaster remediation and storm cleanup. This occupational field is fraught with insurance land mines which could leave you little or no coverage.

Upholstry and Carpet Cleaning Businesses need insurance.

The risk for an upholstery and carpet cleaning business engaging in storm cleanup is heightened for several reasons:

  • Workers are subjected to numerous dangerous conditions while doing cleanup which results in higher workers comp premiums for the business.
  • The property owner may not be covered under their insurance due to pollution exclusions for Category 3 Water damages related to flooding and storm damage which may make them incapable of paying for the cleanup;
  • Workers are dealing with the emotional turmoil experienced by their clients who are already suffering horrific losses from flood and water damage which can be compounded by lack of insurance coverage due to exclusions.
  • Your commercial general liability or business owner’s policy has absolute pollution exclusion which may nullify your general liability coverage.

Storm cleanup can lead to exposure to many toxins and environmental pollutants, including parasites, pesticides, sewage, fungi, bacteria, mud, sludge, toxic chemicals, residue, animal and human bodies, body parts, mold, mildew, rot and, of course; contaminated sea, ground and flood waters from oceans, rivers and lakes.  Additionally, workers can be exposed to rodents, reptiles and animals in the water that all carry diseases transmitted by biting or injecting venom, causing injury and sometimes death.  Employees can also be traumatized by these experiences. This environment leaves the employees in the direct path to acquire related illnesses and injuries.  This factor can influence the rate of workers compensation premium that the business will have to pay in the future and raises the costs for protective equipment that needs to be provided for the health and safety of the employees.  See OSHA Fact Sheets for safety measures to protect employees during water remediation work.

Not only the employees’ health may be affected, but the company’s financial health can be impacted when undertaking storm cleanup or remediation even when it pertains to just floors and upholstered furniture if there is or has been exposure to flood waters. Flood or storm water is by definition Category 3 water previously referred to as black water which is automatically defined as a pollutant.  The company’s Commercial General Liability policy undoubtedly contains numerous exclusions related to Class 3 water, mold and other pollutants. These are pollution exclusions.

Homeowners have policy exclusions for pollutants as well. They may affect the property owner’s coverage for any water damage especially if mold is present, unless they have purchase additional coverage by endorsements which covers the exclusions. You should verify coverage with the Homeowners insurance carrier if you are depending on them for payment for your services.

As a result of the exclusions for both parties, insurance coverage for this occupation is rife with issues and problems for the business owner.  In order to adequately protect the business three areas must be carefully covered.

 

First, all business insurance is categorized by class codes for general liability, standard industry classification and/or workers compensation.  All of these codes for a standard carpet and upholstery cleaning business change when a company performs storm cleanup and water remediation activities and falls under different class codes. So if your business undertakes water remediation as a new business activity you will need to add additional coverage for these activities by class codes or they may otherwise be excluded. If you proceed without changing your class codes you and you employees may not be covered for any water remediation jobs, so this is a critically necessary step. Many insurer do not cover water remediation firms at all and if you have not clear indicated you are doing that type of work, the carrier may not have to cover you.

Next you should determine what type of pollution exclusions are in your general liability policy, e.g. mold, fungus or bacteria that might prevent coverage. You may encounter any number of pollutants while performing storm water remediation.

Third, after examining your policy, you may need to obtain one or several more types of coverage for items that are excluded. In the past it was extremely difficult to obtain comprehensive coverage for remediation contractors.  Contractor’s pollution liability was thought to be the answer, but the mold exclusion became a huge issue prior to 2006 which could void your entire CGL policy and any contractor’s pollution policy.  See General Liability Insurance & Mold. April, 2008 http://www.restorationindustry.org for an in-depth history.

Refinements were made continuously to contractor’s liability policies and in today’s market CPL’s, together with endorsements are available covering most pollutants but it is up to you and your agent to ensure you purchase coverage for all conceivable risks.  Endorsements are generally available on a claims made or completed operations basis.  Additionally. In order to perform water remediation your business should comply with the ANSI/IICRC S 500 and S 520. Standards for Water Restoration to protect yourself from Professional Liability and purchase insurance covering that risk.

Water remediation is a very complex field and protection from liability is absolutely vital.  Before undertaking this venture be sure you have researched your insurance options carefully. Other material which may be helpful are: 1.  Mold Risk Management by Restoration Contractors http://www.armr.net  2. Contractor’s Pollution Liability Update;  and 3.. Environmental Insurance: Just the Facts,http://www.irmi.com.

 

Common Flooring Contractors Business Liability Classification Codes

SIC Business Insurance Codes:

  • 1752: Floor Laying And Other Floor Work
  • 3253: Tile Floor Installers
  • 2273: Carpet Installation
  • 3996: Linoleum and Hard Surface Installation

NAICS Liability Classifications:

  • 238330: Flooring Contractors

Business ISO General Liability:

  • 91341: Interior Carpentry
  • 94569: Floor Covering Installation—Not Ceramic, Tile or Stone
Common Workers Compensation Class Codes:
  • 5478: Carpet, Linoleum, Vinyl Installation
  • 5438: Tile Floor Installation
  • 5437: Hardwood Floor Installation and Refinishing
  • 5645: Residential Construction
  • 5651: Commercial Carpentry
  • 5436: California—Hardwood Floor Installation

 

 

 

Image Credit: Pixabay.com, CCO Creative Commons: No attribution required.

Shooting for Optimal Commercial Insurance!

Gun Clubs or Shooting Ranges have many similarities, but are really two very different types of facilities. A gun club is usually operated by the membership which pays dues or fees to belong, while a shooting range is operated by the business owner or a group of investors/owners who operate the business. Shooting ranges are usually run for a profit and have business customers, while gun clubs may or may not be for-profit. Gun clubs have members and guests, not clients.

General Liability Class Codes - Find the best info about insurance for Gun Clubs and Shooting Ranges at https://www.generalliabilityclasscodes.com/

Assuming that you operate a shooting range for commercial purposes or you are getting ready to start such a business, you are going to need excellent gun club and shooting range insurance that will protect you and your customers from many perils.

First, shooing ranges have the same insurance needs as most businesses including commercial general liability, and workers compensation if you have employees.  Usually these two types of insurance are fundamental for business owners as they are required by law in most states.

Second, you need property insurance to cover damages and repairs to all types of property which the business uses to operate.  You should start by making a list of all commercial property that your business owns, similar to an inventory and include all types of property: e.g.

  1. Real estate,
  2. Buildings and their fixtures,
  3. Office furniture and decorative pieces.
  4. Automobiles, trucks, golf carts, tractors and lawn tractors and any other type of moving vehicles you use to care for the premises or in the business operations
  5. Guns and ammo, gun cleaning equipment, and gunsmiths equipment
  6. All other business equipment for instance: gloves, ear protection, protective glasses, archery
  7. Equipment, or any other related items whether you furnish it rent it or sell it.
  8. Signage not attached to the building needs to be specifically included by a supplement or endorsement.
  9. Books of Account, computer hardware and software,

Depending upon how much and what types of equipment your business owns and operates, you may need an additional inland marine policy.  Along with property coverage you should consider coverage for loss of the data, should a power or equipment failure damage the data or information stored, and additional protection from a security breach or cyber-attack to cover resulting costs for loss of income during an outage, expenses to make notification to those who privacy has been breached and damages to clients privacy.

Other items owned  by the business will depend on what items you offer for sale such as food, drinks, alcoholic beverages, gun supplies, etc.  If you sell food you might need lots of other equipment’s such as cooler, coffee pots, stoves, refrigerator etc.  You may need a rider or supplement for refrigeration as this is a common exclusion on many property policies.

The key factor when purchasing insurance is to make sure the gun clubs shooting ranges obtain coverage for all property.

Shooting ranges should carry  a combination of stand-alone and supplemental policies or a comprehensive business owner’s package with endorsements.

Next you need to consider what liability your business could incur from the operations of a shooting range. First of all you need liability for the use of any type of firearm or other types of sport like archery or clay/skeet.  If your business offers instruction or classes in shooting you will need liability coverage and errors and omissions.   You will need first and third party liability for these matters. You may also participate in competitive shooting and other events which will require event coverage or firearm related events coverage.  If you decide to sell beer or alcohol you will need liquor liability specifically which will usually be an additional endorsement.

You may determine that you want to provide on premises gun repair and, or gunsmith services. In that case you will need products liability and errors and omission or alternately gunsmith insurance which specifically includes these types.  You will need Marine Inland or Bailee’s insurance if you store clients’ guns or keep them while you repair the item.  You will also want to include Crime Coverage to cover theft of your property or you clients by employees if your property insurance does not specifically cover it.

Shooting ranges may have special insurance needs when nearby residential property or businesses expand until they are closely located to your business.  Neighbors and persons who are affected by your activities can sue for nuisance such as noise, pollution, and violation of regulatory and environmental laws and in particular pollution.

Lead pollution is a very serious environmental pollution concern for shooting ranges.

People in close proximity to the lead, which is contained in the bullets and the dust from the bullets when it hits the target, can suffer severe injury especially children.  Lead pollution can cause contamination of adjoining properties and waters downstream from you. Lead exposure can lead to injuries to citizens and clients arising from the exposure to the dust and the bullets, as well as employees being injured by exposure.  An environmental insurance policy or endorsement is an absolute necessity to battle litigation, fees and fines from regulatory and government agencies.  In order to minimize some of your costs you will want to have a safety plan which includes having your ventilation systems monitored, cleaned, maintained and insured as well as your environmental policy.  Your employees should take every safety precaution available while cleaning the facility to shield themselves from exposure to the lead dust. Employees are required to have their lead levels monitored by OSHA periodically, which can lead to warnings, fines, medical expenses, remedial action and closure of the business temporarily.

So if you want a bang up insurance policy  covering all your needs do some homework, meet with your agent, ask lots of questions and make sure the policy you purchase is right for you.