The 2016 Atlantic hurricane season begins Wednesday, and meteorologists are expecting a near-normal period with 12 named storms, six hurricanes and three major ones. It’s a change in pace for the East Coast, which has enjoyed three relatively slow years with little activity and relatively property damage.
It also promises a busy season for contractors, both general and sub, who work with home and business owners to prepare for and recover from hurricanes and tropical storms.
And if insurance agents haven’t already done so, now is the time to revisit coverage options for those commercial clients.
According to Providence, Rhode Island-based DeCotis Insurance Associates, general contractors often push as much liability as possible down to the subcontractors they hire to complete a project. On average, general contractors require subcontractors to have insurance providing them with the following: additional insured status; primary and non-contributory wording making the subcontractor’s coverage primary; waiver of subrogation wording that insures the subcontractor’s insurance carrier will not file suit for reimbursement of loss payments made by the carrier; and possibly a “hold harmless” clause in the contract relieving the general contractor from any liability claims arising out of the work of a subcontractor.
The latter requirement – the “hold harmless” agreement – can vary state to state, based on individual laws, DeCotis said.
“For example, Massachusetts and Rhode Island do not allow broad indemnity, which makes the subcontractor at fault regardless of who is at fault,” the agency said.
The best solution for subcontractors, then, is to find general liability coverage that provides all of the insurance requirements dictated through the contract between the GC and the subcontractor.
Specifically recommended are: a blanket additional insured endorsement with primary and non-contributory wording; a blanket waiver of subrogation endorsement; and a per project general aggregate endorsement.
“Buying a general liability policy with these makes a subcontractor’s life easier,” DeCotis said. “An artisan contractor who has affordable coverage with needed endorsements up front is prepared to accept a job knowing there will be no last minute scramble to meet a GC’s contractual demands.”