Commercial building owner with renovation

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Shagster12
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Posts: 78
Joined: Mon Feb 04, 2008 11:44 am

Re: Commercial building owner with renovation

Post by Shagster12 »

It will need to stay as-is since I'm sure it's already haunted anyway.....;)
LadyBroker
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Location: Southern California

Re: Commercial building owner with renovation

Post by LadyBroker »

Rob wrote:
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!
Hi! Thanks for your input. Let me clarify: He IS the building owner. He is not a contractor. He wants to protect himself should one of the contractors sue him should they get hurt while on his property.

He was saying he might hire all the subs himself to save some money or hire a GC and asked for my advice on that as well. He has other lines with me and he, as far as I know, hasn't talked to any other brokers and is relying on me to come up with a solution.

Also if you check out my post about a commercial building with paranormal activity it is related to this. His yogurt shop might be turning into something else that I "fear" may not be insurable.

Again, we are getting lost on the May or May Nots of this Risk.

If your client is NOT a GC, then again, check the contract. He doesn't want to, nor should he even consider, acting as the GC. Hire a GC, buy an OCP. If the GC trips on the property, he either has work comp or is self insured if he has no work comp.

As far as the paranormal exposures, why is that even in this post? We're discussing the CGL versus an OCP deal, whether you need one or both. I can tell you I write the CGL on several paranormal risks, including a tour of a ship that is supposedly haunted. It's not a tough write, so when you get to that point, call me!
"It's a typical day, on the road to Utopia.."
Rob
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Joined: Fri Mar 02, 2001 11:01 pm
Location: Sacramento
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Re: Commercial building owner with renovation

Post by Rob »

LadyBroker wrote:
Rob wrote:
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!
Hi! Thanks for your input. Let me clarify: He IS the building owner. He is not a contractor. He wants to protect himself should one of the contractors sue him should they get hurt while on his property.

He was saying he might hire all the subs himself to save some money or hire a GC and asked for my advice on that as well. He has other lines with me and he, as far as I know, hasn't talked to any other brokers and is relying on me to come up with a solution.

Also if you check out my post about a commercial building with paranormal activity it is related to this. His yogurt shop might be turning into something else that I "fear" may not be insurable.

Again, we are getting lost on the May or May Nots of this Risk.

If your client is NOT a GC, then again, check the contract. He doesn't want to, nor should he even consider, acting as the GC. Hire a GC, buy an OCP. If the GC trips on the property, he either has work comp or is self insured if he has no work comp.

As far as the paranormal exposures, why is that even in this post? We're discussing the CGL versus an OCP deal, whether you need one or both. I can tell you I write the CGL on several paranormal risks, including a tour of a ship that is supposedly haunted. It's not a tough write, so when you get to that point, call me!

Not a GC, just a guy who owns a building and wants to hire a plumber and someone to build a small closet for a water heater. So he is hiring those guys himself, despite what I recommended, and not hiring a GC. This is if he goes the way of the yogurt shop idea.

I brought up the paranormal stuff in this post because the yogurt shop idea was his first plan and so I started this post and then he came to me with the paranormal idea which would only happen if the Center for Paranormal Studies agrees to send people his way. So when he came to me with that Idea, I started a different thread and then referenced that here. The thing is, if he goes the paranormal route, no renovations will be necessary.

But back to the GC getting injured and you saying he would be self insured. Are you saying that the GC could not sue the building owner? If the building owner goes the yogurt route, hires a GC, gets an OCP and then is sued by the GC, the building owner has no money for defense costs.

This is what everybody is missing. It's simple: The insured is asking how to protect himself from a lawsuit by one of the contractors on the property if they get injured. There is only one answer as far as I can tell and that would be to have his own GL policy in place.

Ladybroker, can you pm me, I don't have your current contact info. Thanks.

Rob
lfarringer
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Posts: 7
Joined: Thu May 28, 2009 1:34 pm

Re: Commercial building owner with renovation

Post by lfarringer »

Shagster has it right... if the building owner will go along with it.

If not, then he needs to either buy GL/OCP coverage or he will have to rely on the subs to have insurance and specify the correct AI endorsements to properly cover himelf. Better be sure he is a good recordkeeper and uses reputable subs who pay their insurance bills and hope that the subs buy insurance from agents who are careful about sending those notices to COI holders when a policy cancels mid-term and hope he has a lucky charm or two up his sleeve to be sure it all goes his way. If any of these ands is not done correctly, he could have a problem. Properly explained, you MAY be able to avoid the E & O fallout when he tries to blame you for the mess he may get into.
shanecw33
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Posts: 7
Joined: Mon Jun 15, 2009 11:57 am

Re: Commercial building owner with renovation

Post by shanecw33 »

Hi Rob -

I may be too late to the party but, assuming we're talking minor renovations (under $250,000), Mt Vernon Fire (a Berkshire company) has a Vacant Building GL policy that will cover the risk. The renovation guideline is as follows:

**Buildings undergoing interior renovations up to 50% of the existing bldg value not to exceed $250,000 by insured contractors are eligible**
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