Flooring Contractor Insurance: How To Get The Right Coverage

What are the specific nuanced coverages to flooring contractor’s insurance that have to do with installation and repair?

How do you get the most competitive rate on your flooring contractor insurance?

We’re going to answer these questions and more…

 

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Flooring Contractor Insurance

The first thing we need to do is define a flooring contractor according to how insurance carriers view flooring contractors:

Floor installers and refinishers cut and lay subflooring in new structures and strip, sand, and paint, stain or varnish existing wood floors in residential or commercial buildings.

This type of operation does not include the installation of floor coverings such as linoleum, tile or carpeting. For new structures, installers cut and lay subflooring over a structural frame, install hardwood flooring, and apply layers of paint and/or varnish. 

Property exposures

Property exposures for a flooring contractor are usually limited to an office and storage for supplies, tools, and vehicles.

The storage of lumber, paints, finishes, varnishes and shellac combined with the dust from the cutting of the lumber or wood can create a high fire and explosion exposure. Labeling, separation, proper storage of flammable, and adequate aisle space reduce the exposure.

Crime exposures 

Crime coverage exposures are from employee dishonesty.

Background checks, including criminal history, should be performed on all employees providing services to customers or handling money. All ordering, billing, and disbursement should be handled as separate duties with reconciliations occurring regularly. 

Inland marine exposures 

Inland marine insurance exposures include accounts receivable if the floorer offers credit to customers, contractors’ tools, goods in transit, installation floater and valuable papers and records for customers’ and suppliers’ information.

Equipment at a job site can be damaged by drops from heights, weather damage, or being struck by vehicles. Equipment and supplies left at job sites are subject to theft and vandalism.

Flooring in transit is vulnerable to damage from dropping, breakage, shifting and collision and overturn. Improper loading or inadequate tie-down poses a serious loss potential. Oversized loads can be damaged by collision with stationary structures or other vehicles.

The installation floater exposure varies depending on whether the contractor delivers the flooring or has them drop shipped to the job site. The contract with the client should state who is responsible for the flooring during transit and storage. 

General Liability Insurance

General liability insurance actually covers multiple exposures in one policy form: Premises liability and Products/Completed Operations.

Premises liability exposures

Premises liability exposure at the contractor’s shop or office are generally limited due to lack of public access. Fires or fumes from woodworking and/or lumber storage operations can spread to neighboring businesses or homes.

Outdoor storage may create vandalism and attractive nuisance hazards. Off-site exposures are moderate. Jobsite operations include the potential for bodily injury to the public and to other contractors’ employees and damage to their property or completed work.

Tools, power cords, building materials and scrap all pose trip hazards even when not in use. The use of saws and other power or hand tools is inherently hazardous due to sharp edges and moving parts. The area of operation should be restricted. In enclosed structures, the buildup of dust and scraps can result in catastrophic fire and explosion.

Disposal of waste materials (dust, scrap, varnishes or paints) could create an environmental hazard. There may be significant subcontractor and other contractual liability exposures. 

Completed operations

Completed operations liability exposures are high if the flooring contractor builds the floors on which the customer’s operations take place due to the potential for collapse.

Quality control and full compliance with all construction, material, and design specifications are necessary. Inadequate monitoring of work orders and change orders may be a concern.

Poor record-keeping may necessitate payment of otherwise questionable claims. Inspection and written acceptance of the work by the owner or general contractor is critical. 

Automobile exposures

Commercial auto insurance exposures are limited unless lumber and pre-made items are transported by the installer. MVRs must be run on a regular basis.

Random drug and alcohol testing should be conducted. Vehicles must be well maintained with records kept in a central location.

Hazards of transport include failure to secure the load properly and equipment failure, especially tie-downs and hitches. If oversized items are transported, vehicles should be clearly marked. 

Workers compensation exposures

Worker’s compensation insurance exposures vary based on the size and nature of the job. Work with hand tools and sharp objects such as saws and nails can result in cuts, piercings, and accidental amputation.

Back injuries, hernias, strains, and sprains can result from lifting.

Working at floor level for extended periods of time can result in injuries to the knees. Minor injuries may be frequent even when the severity exposure is controlled.

The absence of basic safety equipment, such as properly installed guards, steel-toed shoes, and eye protection may indicate a morale hazard. Employees must be carefully selected, trained and supervised. Occupational diseases can result from exposure to noise, dust, and chemicals used in the finishing process. 

The Rub

Too often these coverages are not fully explained to flooring contractors when they’re purchasing commercial insurance.

That’s what we do here at Rogue Risk, transparent communication.

The key to getting the most competitive rate is working with an agent or brokerage who understands the market. A broker who knows the insurance companies that want to write with flooring contractors and is able to get you the most competitive rate for your business.

We work with contractors to help them get the insurance coverage they need on their own terms at a price they can afford, making sure they’re properly covered, and explaining everything along the way.

That is why we focus on contractors, and for you, making sure that you have the best insurance program possible for your business.

If this is the kind of relationship that you would like with your insurance provider, we would love to talk to you.

I look forward to introducing you to a new way of viewing your insurance program.

Thank you,

Ryan Hanley

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