LadyBroker wrote:You can write a premises liability policy to protect the owner's interests, should someone become injured on the premises during construction, not due to construction activities. (kids climb fence at night, fall down in lot; passer-by slips and falls on the sidewalk, etc).
I don't know if the Contractor can sue for injury, since that would be a work comp issue that he should handle.
Any other thoughts?
pita3333 wrote:OCP (Owners Contractors Protective) policy for the GL/Premises and COC/Builders Risk/Installation Floater for the materials.
That is if he is NOT acting as his own general...if he is...then standard GL for general will do the job. So long as the entities are the same.
lfarringer wrote:Most small business and residential construction in our area is now conducted with a GC acting as a central figure using 100% subbed labor for the actual work. Your building owner may have a large amount of coverage under the AI endorsement (if it is the right one) of the GC. That is, provided that the GC pays the subs and the owner does not. He still needs his own GL policy though, either way.
The only difference is going to be at audit and who gets to pay for these insured and uninsured subs, him or the GC? Your best option is to run all of the subs costs through the GC's books and let him pay the insurance charges under his policy and let him worry about the audit. That way your owner will not appear to be acting as his own General Contractor. Otherwise, he and the GC that he hires will be splitting the insurance bill on the project.
Beware of the ISO GC2294 endorsement which excludes the subcontractor's "Your Work" from the exception to the "Your Work Exclusion" on the GL policy. Yes, it is a bit tricky the way it is worded. The basic GL policy says that "Your Work" is not covered and then it excepts work done by subs at the named insured's direction. The GC2294 removes the exception so that the entire project is considered "Your Work" and is not covered under the GL. The intent is to not allow the GL policy to be used as a warranty of the work done.
Many companies who write GL on GC's without the CG 2294 will require a written subcontract agreement with a good transfer of risk in it and other points of interest such as making the sub's policy primary, and naming the GC as AI under specific endorsement ISO numbers and possibly requiring a per project aggregate instead of per policy year. It is so complicated that the owners and contractors need insurance professionals to help them figure it out. People like us!
My opinion is that your Building owner still needs his own GL policy. Whether he uses insured subs or contracts with them direct merely goes to who pays the most premium for the exposures.
LadyBroker wrote:Hi Rob,
while I love your posts, I find too often we get way out into the realm of what if...and lose track of the actual issue.
If I could summarize, you have a client risk that May or May Not be a GC, for a renovation of a small business from something into a Yogurt shop. My guess is going to be that if tyour client reads the contract with the Building Owners, he will find that the renovations have to be done by a licensed GC, which would clear up the first point. If your client isn't a licensed GC, then he has to hire one. That would then push the Construction liability onto the GC. Your client would be named as an AI on their policy, as well as would be the building owner. Then your client would get an OCP to cover the premises liability during the build. If your client is in fact a GC, then he would have to provide the insurance for the build itself, and also secure an OCP for his exposures as the tenant of the property in question.
The GC would be responsible for ensuring that all his subs, as well as his employees, are properly insured, and that would mean work comp if warranted. If the sub or the GC does not have work comp, then that can be it's own issue. If they don't have it because they have no employees, that's one thing. If they don't have work comp because they chose not to, then perhaps let's not hire them.
Does this help at all? I am just envisioning your client getting OCP quotes from other retailer with ease while we debate these really fine points, and i would like to see you write this account!
lfarringer wrote:In Tennessee, one does not have to be a licensed contractor to hire subs to remodel different aspects of their own building. The problem comes in underwriting such a risk. No standard company wants to take on the BI & PD long term exposures of a non licensed owner acting like a GC. OCP insurance in a standard company does not get enough money to offset the presumed higher risk and most companies will not issue a GL policy with contractor codes on it to an unlicensed person or organization. Thus the reliance on a surplus lines market.
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