Grab a Pencil, Trade Contractors

Read four scenarios relating universal life events with trade contractors’ need for insurance.

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Learn a few insurance basics by taking a quiz focused on trade contractors and insurance.

It’s September 2020, and we’re all back to school in one way or another. In the spirit of back-to-school, today’s blog is presented in quiz format. The focus is trade contractors and insurance. Each question begins with a universally-recognized life event or circumstance (represented in bold-lettering), followed by a hypothetical scenario involving a trade contractor and his/her insurance. Grab a pencil, trade contractors. It’s quiz time! Answers are below.*

QUESTIONS:

1. It Happens to Everyone.

Trade Contractor Alan is on the job installing bathroom lighting for a customer. Alan accidentally drops a tool, which falls on the customer’s bathroom countertop and damages the surface. What insurance coverage would protect Alan’s liability for damage to the customer’s bathroom countertop?

2. Kids are Curious.

Carpenter Casey is remodeling a customer’s basement. Casey transports her tools to-and-from the job in a pick-up truck. She brings most of her equipment inside the house, but leaves some items in the pick-up. One of the items left in the bed of the pick-up is a small bowsaw. Neighbor kids are outside playing a game of catch. The ball is overthrown and lands in the bed of the pick-up. One of the kids climbs into the truck to retrieve the ball and picks up the bowsaw, which badly cuts his fingers. Is Casey liable? What type of insurance coverage would Casey need to shield herself and her carpentry business from financial fallout from a claim made against Casey by the kid’s parents?

3. Deer in the Headlights.

Family man Fred hits a deer smack dab in the headlights, while driving home from a plumbing contractor job. Fortunately, Fred is unharmed, and no other people are involved. Also, no other vehicles or property was  damaged. Fred’s work truck, however, is undrivable. What insurance would Fred need for: a) towing his work truck; b) repairing his work truck; and c) replacement vehicle, while his work truck is being repaired?

4. My Kid Borrowed the Van.

Dad Don gave his son permission to borrow Don’s trade contracting work van for the weekend to move furniture and boxes into his son’s first house. Don’s son has an automobile accident for which Don’s son is at fault. Would Don’s commercial auto policy respond?

ANSWERS*:  The following answers are for general information purposes only. Actual policy terms and conditions always apply. Bear in mind that each individual loss or claim is unique and may develop beyond the hypothetical scenarios/circumstances stated herein.

1.  The property damage liability portion of Alan’s Contractor’s Insurance policy would apply to this claim. The cost to repair or replace the customer’s damaged bathroom countertop would be covered, subject to the property damage liability deductible, if any, on Alan’s policy.

2. Casey may be liable. The general liability and medical payments sections of her Contractor’s Insurance policy would respond. This scenario is an example of a claim which could be a once-and-done, or it could potentially develop into a much more costly claim over a long period of time. Injury to the hand and fingers can be very extensive and expensive, possibly resulting in long-term disability. Accidents happen. Trade contractors should be mindful to purchase appropriate insurance limits to protect themselves from being wiped out financially. Something as mundane as a kid’s curiosity could become very consequential, very unexpectedly.

3. Fred’s commercial auto policy would: a) not cover towing cost, unless Fred had specifically purchased it earlier; b) cover repair to Fred’s work truck up to the actual cash value of the truck, subject to the policy deductible. Respects c), rental reimbursement coverage is an add-on coverage that Fred would have had to purchase prior to the loss for coverage to apply. I will add two general caveats under c):

#1 Depending on the size and type of vehicle, rental reimbursement coverage may not be available, and

#2 Rental reimbursement coverage is usually only available up to a maximum of 30 days and is subject to a dollar limit per day, i.e. anything over the time period and dollar limit would be out-of-pocket.

4. Don’s commercial auto policy would cover physical damage to Don’s work van up to the actual cash value of the work van, less the deductible. Respects commercial auto liability, the general rule of thumb is that liability coverage follows the vehicle, rather than the driver. In this scenario, Don’s commercial auto liability policy would apply. However, if liability damages exceed Don’s commercial auto liability policy limits, then Don’s son’s personal auto liability policy limits would be invoked. That said, be aware that policy terms and conditions of the actual policy(ies) would apply.

How did you do on the quiz? Have more questions?

Contact Richey-Barrett Insurance, a Trusted Choice Independent Insurance Agent, for trade contractors’ insurance.

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