by Ed Sneneh, Chicago, Illinois Insurance Agent
Roofing is one of the classes of artisan contractors that has special needs. The risky nature of the business, exposure to high morale and moral risks, and amount of potential damages that can result from improper workmanship make insuring roofing contractors little more complicated that other classes of artisan contractors.
Common Factors With Other Artisan Contractors. Like all other artisan contractors roofers need certain commercial general liability insurance to cover them for any property damage or bodily injury that their operations may cause to others. It should be noted that damages to the roofs or any other equipment that are meant to be permanently part of the installation, during the installation process is not covered by the contractors commercial general liability. Installation Floater is a coverage that covers the installing artisan contractor against losses to construction materials, tools, machinery, equipment, and other fixtures which will become permanent parts of an installation. Property is covered while in transit, at a storage facility awaiting installation, at the jobsite, or during the actual installation process.
Depending on the size of the contractors and equipment used, roofers may need building coverage if they own the building where they are located, business personal property and inland marine coverage to cover their installation office and/ or installation equipment and tools. They also need business auto insurance for their autos and trucks, if they own and use ones in business.
Workers Compensation for Roofers. This coverage is mandatory by law for all wage paying businesses. Workers compensation will cover all W-2 employees and any 1099 "independent subcontractor" that does not have workers compensation policies. For that reason, all compensation paid to employees and independent contractors will count in the final audit of the workers compensation, unless payees prove they had workers compensation elsewhere. In such a case, the artisan contractor will not be liable for any additional premium to cover those who already have workers compensation coverage.
Some roofers may choose to get an umbrella policy either because of their extensive exposure or to meet certain legal/ contractual obligations. An umbrella policy will provide extra liability coverage above and beyond what's offered by the underlining policies of commercial general liability, auto liability, and workers compensation.
Rating and Qualifications: Pricing and eligibility of roofing contractors depend on several factors including the following:
- Size of Operation: This is perhaps the number one criterion for all contractors. Size of contractors is measured by total annual receipt/ payroll of the contractor operation. Larger size contractors pay more insurance premium money. Payments made to other subcontractors will be included unless other contractors have similar insurance with certificate of insurance provided. This applies to both commercial general liability and workers compensation where annual cost/ payroll are essential questions that determine pricing and eligibility. If subcontractors are used, insurance companies want to know the length of time certificates of insurance are held (preferably 3 years or more), type of subcontract work performed (ie Waterproofing, Siding, Hot tar, Rain gutters, Carpentry, Insulation, etc.)
- Amounts of Insurance. Roofers pay more for higher limits of insurance. This is pretty much normal with all insurance coverage.
- Insurance companies want to know the maximum height of constructions worked on (preferably no more than 3), warranties offered (better warranties means less insurance claims), methods of disposing waste (improper methods mean high risk).
- Experience of the Contractor. Experience of contractors plays important role in determining the acceptability of the contractors. Larger contractors with bad insurance experience (claims) may face difficulty obtaining insurance at reasonable rates.
Roofing contractors may also need license/ permit bonds. Bond requirements vary bas on local authority requirement. Rates for bonds are based on size of the project and amount of bond.
For more information or if you need a fast quotes please complete the roofing contractor insurance rate quote form or call our office at (708) 233-4848 and ask to speak with a commercial insurance agent.
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