US housing starts jumped by nearly 17 percent this past December to their highest level in 13 years, according to a recent press release from the Census Bureau. This is great news for the housing market, including for those involved in it such as artisan contractor businesses.
But as history has taught us, an increasingly growing market and speedy work can lead to potential exposures, such as electrical fires, burst pipes, and other defects in construction. And while homeowners would be at risk for losses related to these risks, it’s the artisan contractor who worked on the project who could be held liable.
Artisan Contractors’ Important Insurance Considerations
Before these professionals take on more work and before they head into an increasingly busy housing market, it’s the perfect time for artisan contractors to go over important insurance subjects to make sure they understand their liability and that they are properly covered.
Get Covered First
The general contractor of a project is required by law to review the certificate of insurance, or COI, for every subcontractor on a worksite and make sure everyone is covered. Whether it’s the pipe fitter or the window framer, liabilities have no prejudice.
For example, some plumbers may also be involved in welding pipes. Since this can be a common exclusion on commercial insurance coverage, it’s better to go over the current policy before starting a job than to end up with a major loss down the road.
Insurance agents who represent artisan contractor professionals should make sure there is no gap in coverage, even if the contractor is closing up shop. This is due to construction-related defect claims that can be brought up five years or more after work is completed.
Always Keep Records
When a construction defect claim is made, an artisan contractor will need to be able to explain their role in the project, and fast. Having adequate and complete records, including any finished work or any work some subcontractors have begun, can help assist the process in the event that a claim is made. Contractors should be able to hold up to 10 years of records past a completed project.
Communicate Claims Quickly
An artisan contractor should be sure to alert their insurance broker or agent quickly when they receive any word that a claim has been filed against them. Waiting too long can create challenges and end up complicating an insured’s defense during a lawsuit. Any construction defect claims can catch an artisan contractor off-guard. Having a solid working relationship between contractor and agent will help to keep the chances of incurring major losses lower.
About Tangram Insurance Services
Located across the Golden Gate Bridge, just outside of San Francisco, Tangram Insurance Services is a full-service Managing General Underwriter and Program Manager offering specialty programs. We focus on industry-relevant coverage, competitive pricing, and practical business and risk management solutions for your clients. Since we are not all things to all people, we make sure to create outstanding custom-built solutions that matter to those businesses, and the brokers who serve those industries. Contact us at (888) 744-9810.