Liability Insurance Covered or Not?

Ever notice when buying some products that the container or quantity is noticeably smaller, but the price is about the same or has gone up?  Pay more and get less. General liability insurance is kind of like that too. Aside from just another irritating bill to pay, liability insurance is supposed to represent a promise of help if something goes wrong.

The container, or policies in this case, are getting thicker, having grown to the size of a small book, which at first glance may make one assume that there is additional coverage. Aaannt! (Or some other buzzer sound). It is the opposite, almost always fatter policies indicate less coverage. There are pages, almost chapters, of exceptions and qualifications that keep lawyer teams busy documenting ways for the insurance carrier to wiggle out of or limit paying for occurrences.

Think about the term pay the “premium” and it connotes the potential of a higher fee than what may be necessary to maintain reasonable coverage. Maybe that is how some insurance companies have grown so enormous and rake in over stuffed barrels of cash. In addition, many indemnity carriers build a series of entities to insulate themselves from colossal claims in the unlikely event that the lawyers forgot to exclude something. After 911, terrorism endorsement modifications were added to general liability policies. Now, we may find separate limits/coverage for hurricanes or “named” storms, which may include additional or higher deductibles. Asbestos, mold, pollution and not guarding customer or employee privacy information may not be covered or at best, marginal protection may be contained in the indemnity coverage.

Added to the burdensome compliance costs and all the other negative ramifications of the RRP regulation, our insurance carrier friends grabbed the opportunity to beef up lead liability exclusions. Today, there is less or zero coverage for the average paint professional on certain buildings and homes, whether a company is RRP certified or not. Older policies talked about lead abatement and removal, while the new insurance booklets read in part something like, “This insurance does not apply to Lead Liability: exposure to or existence of lead, paint containing lead, or any other material or substance containing lead; or the manufacture, distribution, sale, resale, rebranding, installation, repair, removal, encapsulation, abatement, replacement, or any other material or substance containing lead…”

Basically, working on buildings (some post 1977 commercial, public, and structures have steel, which may contain lead based primer or paint) and pre 1978 homes are at the contractor’s risk. Unless specifically stated otherwise, most liability insurance will not cover paint professionals for any property damage or personal injury resulting from any type of lead claim. It is a best business practice to review liability policies in detail and to ask questions before the commencement or any payment of coverage.

Ideally, start shopping three months prior to a policy’s anniversary date to allow enough time to achieve a balance of reasonable coverage at a fair price. If possible, take the time to interview several independent agents, who like contracting companies, are not created equal. Select a reliable agent to gain a clearer picture of exactly how your work performance and daily practices mesh with potential carrier coverage. Paint professionals should understand the limits (limitations) rather than working too busy and not realizing what the irritating bills actual include or naively trusting an insurance carrier to keep an assumed promise.

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