When it comes to insurance policies for general contractors, it’s important to understand that different types of specialized work require different types of coverage. A general contractor insurance policy may not provide adequate coverage for certain types of specialized work, such as artistic work involving marble or high-end woodwork, or even more structural work. This is because specialized work often creates additional risk and exposure that may not be covered by a more general professional liability policy or even a bond with certain exclusions. If you’re a contractor or builder branching out into specialized contract projects, it’s important to check with your insurance broker to ensure that your overall policy still covers these activities. Although you may think that a broad policy covers everything, it’s often the case that you need deeper coverage in a more specific area.
We worked with a client who primarily installed granite and marble countertops but eventually expanded to more artistic work using their existing equipment and materials. They started building vertical walls, fireplaces, and other outdoor landscape items, which required more engineering such as support braces or small rebar pieces to hold it all together. Unfortunately, one of their projects collapsed due to water erosion underneath the piece, causing damage to the exterior structure of the house and water lines. Although the contractor had done everything right, they didn’t have coverage for this type of work, and their general contractor insurance didn’t pay for the damages or the defense.
This is a reminder to review your coverage if you’re branching out into different areas to ensure that you don’t have gaps in coverage and unexpected exposure that won’t be paid for in case of a loss.
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