Should Plumbers Review Their General Liability Insurance?

Should Plumbers Review Their General Liability Insurance?

Imagine hiring a plumber to do some repair work on pipes in a home, however, due to some negligence on the part of the plumber, the pipes were all damaged and the plumber was not willing to take responsibility.  The plumber claimed limited liability based on the contract that was signed, according to him legally he was not responsible for the damages. The homeowner goes to their insurance company to make a claim for the damages and was told that homeowners insurance does not cover damages caused by plumbers. The homeowner was stuck with a repair job that was poorly done, couldn’t file any claims for it and would have to pay someone else to do it.  While seeking other alternatives and trying to see what other options are available, someone recommended sueing the plumber that did the job since he damaged the pipes and didn’t disclose anything about it.

In the situation above, the homeowner mentioned was also advised when looking for a plumber to make sure it was a registered contractor with the Washington State Department of Labor and Industries, having adequate plumber’s insurance if anything should go wrong. If the client was to sue the plumber mentioned above however, this can damage his practice and his plumbing business depending on the outcome. Plumbers can avoid situations like these by ensuring they are protected from anything that can happen, they need to ensure they have general liability to avoid any claims for financial compensations that can be made against them.

Types of Plumbers

There are two different type of plumbing businesses that will require insurance coverage when doing business. Depending on which one you are, there are different requirements that are needed. This however, depends on your City or State and everyone should check their insurance company for advice

The two types of plumbing contractors are:

  1. Residential Plumbers, GL Class Code 98482.  Many plumbers do work on New Residential Construction projects, Tract Developments, and New Condo Construction Projects.   Ask your broker if your coverage excludes such types of projects if these are in your business plan.  Such plumbers would not install fire sprinklers, liquefied petroleum gas (LPG), septic tank, excavation, swimming pools, process piping, public utilities, hospitals or industrial work, or steam/boiler work. They typically do Water softener installations, break concrete & repair to install pipes, lay sewer line/pipe drain and use ditch witch for underground lines (apartments allowed). Lawn sprinklers installation ok.
  2. Non-resident plumbers, GL Class Code 98483.  Many General Liability policies exclude Residential work, so be careful and ask your broker if your coverage has this exclusion if considering plumbing work such projects.   These plumbers also do Water softener installation, break concrete & repair to install pipes, lay sewer line/pipe drain and use ditch witch for underground lines. Lawn sprinklers installation ok.

Residential and non-residential plumbers generally have to provide certificate of insurance and a contractor license bond when obtaining their contractor license in States like Washington and Oregon.  The Washington State Department of Labor and Industries and the Oregon Construction Contractors Board have different contractor license bond requirements.  If the plumber wants to do work for clients in Washington State and Oregon, then they will need a separate license bond for each of the two States.  Consult your licensed Washington State and Oregon agent/broker for more information.

It is important to note that plumbers need different types of coverage depending on their business operation. Some plumbers may not need certain types of coverage while others may need all. Plumbing contractors need these type of coverage to protect themselves legally and it’s important to have legal liability protection at all cost. They will need:

  • General liability coverage or special plumbers coverage
  • Coverage if they have employees and some sort of workers compensation
  • Commercial auto coverage if they have vehicles in their business
  • Faulty Workmanship Coverage (not available in all States)
  • Umbrella or Excess Liability Insurance
  • Pollution Liability – Most policies exclude mold and fungus, yet most plumbers and their insurance agents overlook this very valuable coverage that can save the plumber’s business in the event of a mold related claim.

The cost of your insurance will depend on many different factors some of which include:

  1. The size of your business- this includes employee payroll
  2. The type of plumbing work performed, whether it be for new construction or repairs, homes, condos, apartments, tract developments, industrial, or commercial buildings
  3. The insurance carrier that the agent or broker quoted.  Is it an Occurrence Form or a Claims Made Form of General Liability Insurance?  Does it have a tract exclusion?  Does it have a water intrusion sublimit?  Does it have a Manifestation Clause or a Sunset Clause?   All of these affect the outcome of some claims made against your business and its future.  Choosing a broker that specializes in contractor’s general liability insurance can give a contractor a more thorough consultation and ask the subtle and often overlooked, yet important questions that can determine which plan makes best serves and protects the business.

As mentioned before, you may think that your General Liability policy protects your business from all potential claims made for the work you’re doing, but getting your coverage reviewed by an agent/broker who specializes in protecting contractors can make the difference between you continuing your business and being successful and having to shut down operation due to a lawsuit.

In conclusion, having the right plumbers insurance and protecting yourself legally and otherwise should not be one of those business decisions that plumbers and contractors neglect to make because they do not think it is necessary. This a rather important aspect of your business success and continued growth. While insurance may not be the only way to protect your business from any unforeseen risk that may occur, it is one of those things that can really save you in the long run. There are many different companies offering these types of coverage and helping plumbers and other contractors cover whatever liabilities that may occur. It is important to see what these people are offering and choose the one that can meet your needs fully.  Marc Perez of All Contractors Insurance and Bonds specializes in listening to the needs and plans of contractors in Washington State and Oregon, including plumbers, and will match the plans that make most sense.  Call Marc Perez at 253-252-2533 for a consultation and quote today.

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Why Your Business May Need Commercial Auto Coverage

Does your business need commercial auto coverage? Like many small business owners, you may assume that your personal auto policy affords all the coverage you need. You may also assume that your policy will protect you if you are involved in an accident while driving a vehicle you use for business. Neither assumption may be true.

For one thing, most personal auto policies exclude certain business-related risks.

Business Exclusions

Here are some business-related exclusionsthat are commonly found in personal auto policies:

  • Commercial Auto Exclusion Many policies exclude the use of a vehicle by someone employed or engaged in a business other than farming or ranching. This exclusion doesn’t apply to a private passenger vehicle or to a small pickup or van not used for delivering or transporting goods and materials. Generally, a truck or van is “small” if it has a gross vehicle weight under 10,000 pounds.  The “commercial auto” exclusion is open to interpretation. However, if you use a small truck or van for making deliveries to customers or for hauling tools to a job site you should seriously consider purchasing a commercial policy.
  • Auto Business Exclusion This exclusion applies to autos used in a business that involves selling, repairing, parking, storing or servicing autos. Examples are a dealership and a repair shop.
  • Livery Exclusion Virtually all personal policies exclude the use of an auto (truck or private passenger type) for transporting people or property for a charge. Examples are taxis and vehicles used to deliver pizza or packages.

Inadequate Limits

Most personal auto policies do not provide a liability limit that is adequate for a business. The maximum limit available from a personal auto insurer is typically $500,000. Commercial auto insurers, on the other hand, readily provide a $1,000,000 auto liability limits. Don’t skimp on liability insurance! It is money well spent. A single accident involving a serious bodily injury could result in a huge liability claim against you. If you don’t have adequate liability insurance, one claim could put your firm out of business.

Sole Proprietorship

Suppose your business is a sole proprietorship and you need to purchase a commercial auto policy.   Note that most personal auto insurers will not issue a policy covering autos registered to a business (other than a sole proprietorship).   If your vehicles are registered in the name of a corporation, partnership or other type of business entity you will need to purchase commercial auto coverage.  Can your family members be insured under your business policy? The answer is yes, they can be insured under a commercial policy via the Named Individual Insured Endorsement.

Commercial (Business) Auto Insurance rates are lower than most may think.   Marc Perez at All Contractors Insurance and Bonds has decades of experience in providing affordable commercial auto insurance to businesses in Washington State, Oregon, and Utah.  Call Marc Perez at 253-252-2533 for a quote today.

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What are Contractor License Bonds?

The Washington Contractor’s Registration Act (RCW 18.27) requires electrical, specialty, and general contractors to post surety bonds to legally work within the state. These bonds are put in place to ensure that principals (contractors) do the following:

  • pay all wages and benefits to any person furnishing labor to him or her
  • pay all amounts that become due as a result of the principal’s breach of contract including negligent or improper work in the conduct of contracting business
  • pay any person who furnishes labor or materials or who rents or supplies equipment to the principal
  • pay all taxes and contributions due to the state
  • generally comply with the rules and regulations of RCW 18.27.040

Contractor license bonds in Washington State remain continuous until canceled by the surety company that issued the bond. The surety company can cancel the bond at any time by giving written notice of its intent to cancel to the Director of Labor and Industries. A cancellation or revocation of the bond or withdrawal of the bond suspends the contractor registration issued to the registrant until a new bond or reinstatement notice has been filed and approved. All Contractors Insurance and Bonds can issue these bonds for as low as $100, subject to qualification.  Good rates for contractor license bonds are easier to qualify for than ever.  We issue bonds daily for contractors with good credit, average credit, and poor credit.  We can even issue contractor license bonds for immigrants with a Tax ID Number (TIN).  Call Marc Perez at All Contractors Insurance and Bonds for a quote today at 253-252-2533.

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Minimize Your Business Risks with Commercial Liability Insurance

Everyone makes mistakes, and unintentional accidents in your business may lead to injuries that can be physical, financial, or psychological. Anyone who comes in contact with you or your employees can file a claim or lawsuit against you for many reasons, from funds needed for ongoing medical attention to unfulfilled promises stated in a business contract.

Business Liability insurance helps your business stand strong through challenging situations by covering the associated cost of legal defense and legal damages you are obligated to pay, up to the policy limits selected. Connect with a Marc Perez at All Contractors Insurance and Bonds, who’s an expert in working with business owners, and select from a wide range of options that fit your individual business insurance needs.

Many scenarios, one solid, customized solution

Your unique business faces a wide range of unpredictability, and Business Liability insurance can help businesses mitigate potentially devastating lawsuits. Coverage examples include:

  • Premises and Operations

    A customer at the store you own trips over a fixture and sustains a significant injury from the fall. Bills for the hospital visits are submitted to you for payment.  Business Liability Insurance can cover these charges, as well as the business owner, should he be sued by the customer for negligence.

  • Products and Completed Operations

    The deck you built a year ago was flawed, causing a new building owner fiscal disaster. A legal notice appears in the mail informing you of a lawsuit. The case goes to court and your former client wins.  Business Liability insurance can handle the defense costs and, if it comes to it, the legal damages for which the policyholder is responsible.

  • Cyber Liability and Data Breach

    You don’t know why or how, but your computer system has been hacked. And now all your confidential business and customer data could be online, free to trade and impersonate. The least of your worries is finding the source of the data breach and repairing exposed computers. Your focus is now on damage control and possibly recovering stolen data. Fortunately, your Cyber Liability insurance coverage can help provide you with legal and forensic assistance, as well as free data security risk management services for your customers.

  • Employment Practices Liability

    If you’ve been in business for a few years or operate in an industry with high turnover rates, you’ve likely hired many employees, whether temporary or full-time. The truth of the matter is that any of these employees can bring legal action against your business at any time. Employment Practices Liability insurance can help cover your business entity, directors, officers and employees if you are accused of wrongful termination, harassment, discrimination, and other employment-related offenses.

    Not only do we offer some of the best, personalized service and fast, expert claims handling in the business, but it also makes help available to your business to prevent incidents from recurring and/or mitigate potential future losses.  We’ll provide highly trained loss-prevention experts on staff who can guide you through educational safety programs and provide supporting materials designed to help improve employee awareness. Contact Marc Perez at All Contractors Insurance and Bonds at 253-252-2533 or 253-219-3012 for more details today.

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Insurance requirements of home-based businesses

Are you among the increasing numbers that are finding opportunities running a business from home? The benefits are attractive: you can be your own boss, set your own hours and don’t have to worry about getting laid off … but you need to make sure you and your valuable property are protected. So, if you’ve recently become an entrepreneur running a home-based business or sell home products like makeup or candle arrangements for extra income, getting to know the gaps that may be hiding in your insurance coverage is very important.

Home Business insurance policies and eliminating coverage gaps
Most homeowners policies limit the amount of coverage available for property on the insured premises used primarily for business purposes. However, a Home Business insurance policy may help protect you, your income and give you security and peace of mind while you grow your business.

Coverage for your home business
The coverage under most Home Business insurance policies is similar to that of most Small Business insurance policies:

  • Property Coverage — Includes coverage for losses to your building and premises, business personal property and contents.
  • Liability — Covers damages to your business for losses to third parties from:
    • Bodily Injury — People injured on your premises or by a product you manufacture or sell.
    • Personal Injury — Violations of privacy, false imprisonment, wrongful eviction, etc.
    • Advertising Injury — For losses due to alleged slander, libel, or copyright infringement by you or your employees.

If you telecommute or work remotely for an employer, the insurance issues for a home office may be even more complicated. For example, you may be covered under your homeowners policy for property you own, such as your desk and filing cabinets, but your employer may be covered for loss to company-owned property such as your computer or smartphone. If a delivery person slips on wet steps at your home while making a business-related delivery, your employer’s policy might cover, your homeowners policy might cover, or you could find yourself in the middle between the two carriers, both of which may initially deny the claim. Bottom line: If you work remotely, be sure to check your homeowners policy and ask your employer to confirm what the terms and conditions of its policies are, to avoid finding that neither policy covers a loss after it’s too late.

A new opportunity
Many of us are re-evaluating our lifestyles and for some of us, operating a home-based business provides a new opportunity. Let’s get together — I can help make sure you have the information you need to select coverage you feel is appropriate for your situation. Call me today at 253-252-2533 to set up an appointment.

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