5 Coverage and Policy Nuances Revealed
Do you ever feel like you’re expected to play the role of a fortune teller?
When it comes to insurance, understanding the nuances of the products you’re selling can be handier than a tarot reading. But, you don’t have to break out your crystal ball today!
Here are five common misconceptions about the policies and coverages we offer and the facts behind them. If you know these, you’ll be able to foresee the scope of coverage available for your construction clients.
Misconception #1: The Builders Risk Plan insured by Zurich covers remodels and renovations, not restorations.
Remodels and renovations are a huge part of the builders risk applications we receive, which makes this point important to note. Our project appetite is broad, ranging from small projects like new kitchen tile or cabinets to enormous undertakings like multimillion-dollar professional football stadiums.
But, what’s the difference between renovation and restoration? After all, the two terms describe very similar things.
Renovations focus on making the old new, replacing outdated fixtures and elements with newer ones. However, restorations aim to bring a space back to its original appearance, including restoring or replacing antique materials which could be considerably more expensive than replacing with new or modern materials. It may also be very difficult to locate and transport antique materials needed in the restoration process.
One of our few “no-nos” when it comes to eligibility is historic structures. This is partly due to the confusion caused by the extensive number of interested parties determining what can or cannot be done with the property. For this reason, and with challenges of insuring antique materials, Zurich does not insure restorations or structures on a historic register.
If you’re not sure whether your client’s project would be categorized as a restoration or a renovation, reach out to our underwriting team.
Misconception #2: We offer premises liability, not general liability.
General liability offers specific protection against third-party lawsuits and covered claims for bodily injury and property damage arising out of business operations. Coverage may also be available for personal and advertising injury.
US Assure offers access to premises liability insurance. Often referred to as slip-and-fall coverage, it offers protection for the expenses associated with injuries arising from owner negligence at the insured premises. Please note: this is not general liability insurance and doesn’t cover construction-related injuries.
Another coverage you may be familiar with is owners and contractors protective liability. This provides liability coverage to the project owner for covered bodily injury or property damage arising from job site operations that a designated contractor performed for them.
Misconception #3: We insure modular homes during the course of construction, not manufactured or mobile homes.
The Zurich builders risk policy offers coverage for a wide variety of construction projects, including new home building. However, while we can cover modular homes, manufactured or mobile homes are not eligible for our program.
What’s the difference between these? First of all, modular homes components are constructed in a factory and are shipped via flatbed truck to the project site and then placed on a permanent foundation to then be finished out by a contractor.
Manufactured or mobile homes are built with a steel chassis running down the length so they can be moved. Even if a manufactured home is placed on a permanent foundation, it has the ability to be moved, so it’s ineligible. In case you were wondering, the difference between manufactured and mobile homes all comes down to timing. If it was built after June 15, 1976, it’s a manufactured home.
Misconception #4: The extra expense endorsement covers additional business costs due to covered causes of loss, not cost overages.
Our optional extra expense coverage is for commercial property or business owners who are protected by the Builders Risk Plan insured by Zurich. It offers reimbursement to cover reasonable and necessary expenses to avoid suspending — or to minimize the need to suspend — business operations.
Bear in mind, these expenses must be over and above normal expenses, and incurred due to a covered cause of loss. It doesn’t include expenses to repair or replace covered property, or for cost overruns. Also, if clients decide to upgrade their building materials mid-project, this coverage would not apply.
If your client is a general contractor and needs similar coverage, take a look at our Expediting Expense Coverage form (HBIS-93).
Misconception #5: Our contractors equipment policy insures mobile construction equipment, not office equipment.
While many contractors from builders to photographers might have equipment that needs protection, Zurich’s contractors equipment insurance is designed to provide business coverage for construction machinery, equipment and tools of a mobile nature used in contracting, installation, erection and repair, moving operations, or projects.
It’s designed to work in tandem with builders risk insurance for contractors who may not have a package policy. But, it can also be written for contractors, general contractors, excavation, municipalities, and more.
Some of the items this coverage typically insures include bulldozers, power shovels, loaders, graders, backhoes, forklifts, excavators, pavers, compressors, pumps, and numerous other items of a mobile or portable nature.
Now that you understand these five nuances, you can set your crystal ball aside as you confidently sell coverage and service your clients.
Want some insights to help you avoid claim problems? Check out our guide, 7 Common Builders Risk Claim Mistakes and How to Avoid Them.
This is intended as a general description of certain types of insurance and services available to qualified customers. Any description of policy provisions is meant to give a broad overview of coverages and does not revise or amend a policy. Refer to the policy coverage form for a complete representation of the scope of coverage, terms, conditions, exclusions and more. The policy is the contract that specifically and fully describes your coverage. Some products may not be available in all states and may only be offered on a non-admitted basis. Product availability is subject to change.
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