Restoration firms play an important role in helping communities recover from disasters and accidents. They assist with everything from water damage to fire damage repairs and even mold remediation. In the course of their business, restoration contractors face a variety of risks that can threaten their operations, but contractors professional liability insurance can help. Understanding the importance of professional liability insurance as well as the traditional exclusions will help contractors protect their interests.
Understanding Professional Exclusions
Professional exclusions in liability insurance policies are clauses that specify activities not covered by the policy. Every restoration firm should understand the exclusions of any policy to determine which risk exposures they might still face. This is particularly important because restoration firms often engage in activities that fall under these exclusions such as those below.
Preparing or Approving Documents
The documents related to contractors’ roles include things such as reports, work plans, surveys, change orders, or specifications. Any errors or omissions in these documents may result in financial liabilities.
Supervisory and Inspection Activities
Oversight and inspection of restoration projects are essential, but they can also lead to professional liability claims.
Claim-Related Services
Handling insurance claims and assisting clients with claim-related matters can expose restoration contractors to potential claims in the event of a dispute.
Testing and Evaluation
Detecting errors, omissions, defects, or deficiencies in testing processes can be complex and may lead to liability risks.
Providing Consultations and Advice
Offering expert advice or evaluations in the course of a project can lead to claims if the advice turns out to be inaccurate or if the recommendations lead to problems.
Without proper contractors professional liability coverage, restoration contractors may face costly legal battles and potential financial ruin.
The Impact on Restoration Contractors
Restoration contractors are often deeply involved in activities covered by professional exclusions. When a claim arises due to damages related to these excluded activities, it can have far-reaching consequences. Legal fees, settlement costs, and damage payouts can put a strain on a restoration firm’s finances and reputation.
Additionally, it’s essential to note that similar exclusions are prevalent in contractors’ pollution liability insurance policies, which are specifically designed to address environmental liabilities. Restoration contractors may have to navigate a complex web of exclusions that could expose them to various risks.
Professional Liability Is a Must
The professional exclusions in general liability policies can leave these firms vulnerable to substantial risks and financial hardships. Given the potential risks and liabilities associated with restoration work, professional liability insurance is more important than you might think.
This specialized insurance fills the gaps left by professional exclusions in general liability policies. It offers protection against claims arising from the contractor’s professional activities, including errors, omissions, and providing faulty advice.
Professional liability insurance provides peace of mind to restoration firms, ensuring they can continue their vital work without fear of financial ruin due to unforeseen claims.
To ensure the longevity and success of their businesses, restoration contractors should prioritize professional liability insurance. To learn more about contractors professional liability insurance and how it can benefit your restoration firm, contact Western Republic for more information.
Western Republic
Locally owned and operated since 2009, Gabe Stubin of Western Republic Insurance Services has delivered quality insurance solutions to individuals in Huntington Beach, California, for over 17 years. Specializing in Commercial Business insurance coverage, our team of knowledgeable insurance professionals is committed to helping you find a policy that fits your needs. We focus on providing individualized attention and quality customer service to create an experience that’s difficult to find in today’s market. At Western Republic Insurance Services, we’ll work with you to ensure that you and those you care about most are protected.