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Posted on: July 20, 2023 by Huntersure
Construction professionals face extensive risk exposure in their industry. Any clients you have in the construction industry should carry errors & omissions coverage in addition to their general liability policies. This additional coverage provides protection for mistakes in their work, conflict with their clients, and potentially costly professional claims. Understanding how these policies help your construction clients makes it easier for you to help them get the coverage that they need.
The construction industry is one of vision — that is, the construction process brings an individual’s vision from their perception beyond the blueprints and into reality. Therefore, workers need to envision the site correctly. Sometimes, that reality does not reflect the image closely enough. It could occur due to miscommunications, planning errors, or logistics.
Contractors invest a lot of time, money, and resources into these projects and stand to lose even more if mistakes lead to conflict or disputes. The right E&O insurance can help cover those losses when mistakes in construction, translation, or vision create unhappy clients. Not only that, but many states require construction contractors to carry some level of professional coverage for omissions to obtain permits for a project.
Helping your construction clients understand the coverage is a crucial step for them to appreciate the value of these policies. There are a few critical situations where construction E&O insurance is beneficial.
Making mistakes during construction can prove costly for your clients. Whether they inadvertently damage flooring during a remodel, forget additional reinforcement and support for cabinets, or install the wrong countertops, the policy may cover those losses.
The unexpected can sometimes lead to claims of professional negligence in construction. Unfortunately, some contractors might attempt to circumvent supply delays by ordering materials from a less reputable supplier. They do this even when they know these building materials could be harmful. Thus, this shows negligence. E&O coverage can help offset those costs.
Few industries face as much unpredictability as construction. When a client signs a contract to complete a project by a certain date and weather, staffing issues, or logistical challenges delay that completion, they might face breach of contract claims. The right omissions coverage can cover any penalties for the breach.
When you explain this coverage to your clients, ensure they understand that this policy differs from their liability coverage. Many construction clients assume that general liability is sufficient, but professional liability policies cover specific losses that general liability umbrellas may exclude. The right policy can provide a comprehensive supplement for a general liability umbrella and will provide protections specific to their industry risks.
Construction clients need adequate protection against many potential losses, but some are easier to overlook. The more information you provide to your clients about the value of errors & omissions coverage, the easier it is for them to understand its importance. Professional mistakes, breach of contract, and negligence put construction businesses at risk of significant losses, so educate your clients about omissions coverage to help protect their financial security.
Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.
Posted in: E & O E & O Insurance Errors & Omissions Errors & Omissions Insurance