General Liability Insurance
Construction Insurance for for any kind and type of project. Athena Insurance and Financial Services has been proving insurance services to the United States Construction industry since 1996.
General Liability Insurance for Wrap-Ups
What is a wrap-up? Simply put, a wrap-up changes the way liability and workers compensation insurance is procured for large construction projects. Traditionally subcontractors provide their own insurance as required by the owner for a particular project. In addition the owner may purchase a contingency policy to protect their own interests. This is also accomplished with other “risk transfer” methods such as hold harmless agreements and additional insured provisions on behalf of the owner.
As owners began to:
- identify the cost of insurance the subcontractors were placing in their bids,
- see additional insured endorsements that restricted coverage, and
- review subcontractors policies that were deficient in limits and coverage,
they desired other means to handle insurance for their construction projects.
Wrap-ups became the coverage of choice for these projects. In short, a wrap-up does exactly what it says. It wraps up all the worker compensation and general liability insurance for all onsite contractors (including the general contractor or construction manager) and owners of the project site. The premium for this insurance is paid for by the owner and in return all participating contractors reduce their bid prices by the cost of their own insurance.
Benefits of a Wrap-Up
While it may not always be the primary reason to do a wrap-up, cost savings is a key factor in doing a wrap-up program. As discussed above, contractors always place into their bids an estimated number to reflect the contractors cost of insurance for that project. Depending on certain factors, such as type of work the subcontractor is performing and where the work is being performed, the subcontractor’s insurance cost can range from 2-8 percent of their estimated contract value. Similarly, the general contractor will include a cost for its insurance which may be approximately 1 percent of the project’s construction value.
Add to this the insurance that an owner may purchase as contingency coverage. What we begin to see is that the typical $100 million construction project may have buried in the contract price approximately $6 million in insurance costs. Well, simple logic dictates by using economies of scale and reducing mark-ups alone we should be able to purchase a single insurance program for the entire project for less then $6 million. We do this by emphasizing safety first and a strong claims management program. Rather then paying the contractors a “fixed price” for their insurance, a program is designed whereby the final cost of the wrap-up is a variable based on general liability and workers compensation losses.
Notwithstanding the obvious cost savings, the ability to control the coverage and limits is becoming a popular reason for wrap-ups. This is particularly true in residential construction, where at times the only means to being sure that the contractors have residential construction insurance is through a wrap-up program. Today, many contractors’ insurance policies have residential exclusions and other coverage restrictions. By instituting a wrap-up, the owner now controls the coverage and is able to enhance through “bulk buying” the proper insurance coverage and ability to buy higher levels of protection not otherwise provided by the subcontractors.
An often overlooked reason for a wrap-up is its ability to facilitate Minority Business Enterprise (MBE) and Women Business Enterprise (WBE) requirements. On many public projects where the controlling government authority may require minority participation, a wrap-up may be the only means available to provide consistent coverage to all participating contractors. Without this tool, many minority contractors may not have the depth of coverage required by the public entity and therefore would be unable to bid such jobs.
Critical mass is what actually makes the wrap-up work. Insurance companies generally look for projects with at least $100 million of hard construction cost. By being able to underwrite larger projects, insurance companies can more easily spread their risk among the large numbers. Smaller projects will not yield the level of savings necessary for the owner to consider the “risk” of an upswing in cost arising out of poor safety results.
General Liability Insurance for General Contractors
General Contractor Insurance in it’s “generic” for provides these standard basic coverage. The list of items listed below is not intended to be the “actual” coverage that all policies will contain as each policy has it’s own unique coverage, endorsements, exclusions terms and conditions. In general this is what is covered:
- Bodily Injury
- Property Damage
- Advertising Injury
- Fire Damage
The requirements placed upon the General Contractor are generally “his/her” own but this often changes when the general contractor starts to bid on projects for “other project owners” or municipalities. The need to carefully discuss your risk management is vital.
Risk management takes into consideration all project insurance requirements prior to the commencement of obtaining insurance quotes. Then, if any new projects are contemplated it is vital that the General contractor carefully review the indemnity agreements within any new construction projects and convey those requirements to our brokers so that they can evaluate how the new project insurance requirements will be met.
In addition, surety / bonding are required. And although not part of a general liability insurance policy we can assist you with quality bond rates and services. Contact us now
General Liability Insurance for Artisan Contractors
Artisan Contractors or Specialty Contractors need general liability insurance to protect their assets and to satisfy the requirements of the general contractors or the home owners. Our artisan & specialty contractor general liability policies are the most competitive in the industry.
The insurance quoting process for the Artisan is primarily divided in to two major categories.
- Artisans that provide 100% of their services to one class of operations
- Artisans that provide a variety of services in different classes of operations
An example of an Artisan that provides 100% of their services in one class of operations is a “landscaper.” And example of an Artisan that may have mixed classes of operations is that of a remodeling contractor.
Important! Please make a note to self! You may not operate outside of your listed classes of operation and be covered. Here is an example of operation out of your class:
Hypothetical example 1. – A residential gutter contractor declares 100% of his work in installing rain gutters and declares that he/she do not do “any roofing” when in fact they do in some instances. If a claim were to come in regarding damage to the roof the carrier would deny coverage.
Hypothetical example 2. – A roofing contractor declares 100% residential operations and then decides to work on a commercial project (without adding on the commercial roofing endorsement) There is a severe rain and water enters into the building causing damage to the tenants machinery. Claim is denied because the class of commercial roofing was not included in the declared operations.
The moral to the story is that you either stay within your declared class of operations or make sure that your policy has the class of operations listed. This is a topic of discussion for the person that want to say.. “oh maybe once in a while I may but no now”… In example #2 above the roofing contractor had to write a check for a substantial sum out of their own bank account.
Insurance for New Ventures
We accept new ventures. When we do accept new ventures it is vital that we have your full cooperation and attention. We are looking for relationships that will last many decades. Your success is our success and time is a valuable asset.
We will dedicate our time to educate you and explain to you the nuances of risk and insurance. You have our guarantee that we will do our best to communicate with you whenever you need us. In return we ask you to work with us in times of necessity such as in being cooperative in answering all or our underwriting questions, returning calls and questionnaires.
Also, to carefully review and submit to us any written document regarding a need for an Additional Insured Certificate “prior” to accepting any contract unless you are 100% sure that the insurance you purchased will meet the requirements for the project. There could be “wording” in the “indemnity” part of the contract that requires special endorsements to your policy and they could be costly. If you take on the project and try to add the endorsements later there will be problems.
- General Liability
- Workers Compensation
- Bonds / Surety
- Commercial Auto
- Builders Risk
- Inland Marine/Equipment
Construction Insurance Services
- Review of Contract “indemnity” agreements – no charge if an existing client
- Issuance of Certificates – no charge if not an AI Cert
- Issuance of Certificates with special endorsements
- Review and issuance of Additional Insured Certificates
- Renewal of Additional Insured Certificates – discounted over 50%
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