Many artisan contractors believe they are fully protected from liability losses for many reasons. But the standard Insurance Service Office (ISO) Commercial General Liability policy does not cover the named insured’s work or products.

Contractors around Northeast Ohio register with many Cuyahoga County municipalities and must provide proof of Liability Insurance to complete the registration process making them believe they are protected from all losses that may occur. However, I am not aware of one city that requires artisan contractors to carry Contractors Errors & Omissions Insurance.

Contractors Errors & Omissions Insurance is designed for artisan contractors to provide them protection from lawsuits and claims arising from; damage to their work, products they install or to impaired property. This coverage should not be confused with Contractor’s Professional Liability. Contractor’s Professional Liability is designed for businesses involved with construction management and design build work.

To better understand Contractors Errors & Omissions Insurance a quick reference to the Commercial General Liability Policy (CGL) may help. The ISO CGL policy typically insures bodily injury and property damage, personal and advertising injury or premise medical payments. This coverage provides no protection for the named insured for the types of losses mentioned above.

Here is a sample loss scenario that could be covered by Contractors Errors & Omissions:

A fence installer misreads the site plan and installs the fence over the property line. The fence must be taken down and reinstalled. Cost of this work may be covered by Contractors Errors & Omissions. Some Contractors Errors & Omissions claims may come into play along with a CGL claim. A contractor does not properly brace a rooftop HVAC unit. The unit falls through the roof damaging the building and the owner’s belongings on the top floor. The CGL policy will pay for the property damage to the building and contents (belongings) that were damaged, but will not replace the unit that is damaged beyond repair. Replacement of the unit would be provided by the insured’s Contractors Errors & Omissions coverage.

This is only a general overview of what is covered by Contractors Errors & Omissions. Each company’s form may differ, so before you renew your Contractors Insurance contact the Trusted Choice Agents at Richey-Barrett Insurance so we can review your insurance needs in detail.