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Construction Insurance Bulletin


By July 1, 2013No Comments

A difficult economy is squeezing small contractors to do more jobs within narrower margins, exposing them to costly errors Customers are more demanding and quick to claim negligence when they aren’t satisfied with the results.

When a small contractor makes a mistake that results in a loss, he must often spend the time and his own money to fix the work – usually costing thousands of dollars. Expensive mishaps happen every day on jobs such as these:

  • Carpet Installer: A contractor picks up the wrong carpet at the dealer and mistakenly installs it in a customer’s home. The installer has to remove the incorrect carpet and replace it with the correct product. Total contractor loss: $3,000.
  • HVAC Contractor: When installing a new cooling unit on the roof of a commercial building, a contractor fails to complete the foundation support. The unit breaks through the roof, destroys the equipment, and causes significant damage to the building and personal property, costing the contractor: $25,000.
  • Fence Erection: A contractor misreads the site plan while installing a fence. As a result, the fence is installed significantly over the property line and has to be removed and reinstalled. Total contractor loss: $35,000.

The General Liability policies of these contractors would not cover these losses. However, Contractors Errors & Omissions (E&O) insurance can pick up the tab for claims of negligence, providing financial protection and peace of mind for contractors in today’s “litigation society.” Insurance companies have tailored policies for small contractors in a wide variety of specialties – everything from HVAC dealer/ distributors, janitorial contractors, and locksmiths, to septic-tank cleaners, masonry contractors, and interior-tile and stone artisans.

To learn how Contractors E&O coverage can help protect your business, feel free to get in touch with us.