Chicago Artisan Contractors: Definitions, Coverage Needed and Factors Affecting Rates & Eligibility
by Ed Sneineh
Chicago Insurance Agent
An Artisan Contractor is one who performs work on customer's premises and during that process some or all of customer's property is deemed under the care, custody, and control of the contractor.
Coverage Needed by Artisan Contractor
- Commercial General Liability, including Business Premises & Operations, Products and Completed Works, Fire Legal, Personal and Advertising Injury, Contractual Liability and Medical Payment. Additional liability may include coverage such as Hired and Non Owned Auto. Certain policies provide exclusions to the damages occurring to customer's property during installation even if they seem to be " under the care, custody, and control of the contractor". In this case the "Installation Floater Coverage" listed below becomes very important.
- Contractors Equipment is a coverage that provide protection for valuable equipment of the contractor, normally items over $1,000 per item. Tools and Equipment Floater provides coverage for unscheduled items under $1,000 of value. Also, materials, supplies, machinery, and fixtures to be installed at installation sites are normally covered under the Installation Floater Coverage.
- Property Coverage. Policies may include coverages on Buildings and Business Personal Property. Loss of income riders may also be purchased if it is not included automatically in coverage. Additional coverage may be requested such as crime, signs, employees dishonesty, etc.
- Business Auto. The coverage provide primary auto liability on all scheduled autos of the artisan contractor. Policies may be issued with or without Hired and Non Owned Auto. Also, the coverage may be issued with or without physical damage (comprehensive and collision coverage).
- Workers Compensation is a mandatory coverage required from each wage paying employer in most states.
- Umbrella Coverage. An Umbrella policy may be used to boost liability coverages provided under the Commercial General Liability, Auto Liability and Workers Compensation.
Main Factors Affecting Rates And Eligibility for Artisan Contractors Insurance:
- Limits and Amounts of Coverages Listed Above. It is logical to say that more coverage means higher premiums.
- Size of Operations. The size of the artisan contractors is determined by either the amount of annual payroll or numbers of partners, part time, and full time employees. Other contractors are evaluated based on their annual receipts. Some insurance companies take all of these factors in account. Any monies paid to work subcontracted to other subcontractors will count as payroll unless the hired subcontractor provides documents supporting that the subcontractor had insurance for the work provided.
- Classifications of Contractor. Contractors who are involved in higher risk activities (roofing, excavations, etc.) have higher risk tag than those who are involved in less risky operations such as painters and dry wall installers. Misclassifying your business will surely lead to either overpayment or underpayment of your premiums, which, in either case, is not good for the clients. Overpayment is spending money for no reason, and underpayment could be used as a ground for misrepresentation (canceling your policy for not disclosing all operations).
- For medium to large size contractors certain Liability Controls may enter in the determination and eligibility of rates and coverages. These control include the existence of written contracts with customers and subcontractors as well as the language of the written contract, involvement in architectural or engineering design and if so, existence of errors and omission coverage for such operations, if the contractor is acting as a consultant or manager for other projects etc,
- Scope of Operations. Certain contractors with comparable size and classifications may be charged different premiums based on the scope of their operations.
Being involved in more of the following activities may cause higher premiums or simply declination of coverage in some instances: Airports, Earthquake Retrofitting or Reinforcing Marinas, Residential Home (New Construction), Ammonia Refrigeration Systems, Electrical Fence, Maritime, Roofing, Asbestos Removal Excavating Mining Sand/Gravel Automatic or Power Doors, Farm Equipment Repair, Mold and Spore Treatment or Remediation, Sand Blasting, Blasting, Fire and Water Restoration, Oil and Gas Fields, Soil Testing, Boilers, Framing (Residential), Over the Hole, Soil Stabilzation, Bridge Work, Foundations, Petrochemical Plants, Surveying, Conveyers, Grain Elevators, Pile Driving, Synethetic Stucco, Cranes, Hazardous Waste, Prisons, Trailer Hitches, Demolition, Home Inspections, Railroads, Underpinning, Design, LPG, Refineries, Waterproofing, and Drilling.
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