Artisan contractors form the backbone of our communities. Unlike general contractors, these highly skilled tradespeople are called upon to perform specific, specialized jobs. Due to the mobile nature of their work, they often have little to no premises liability in their contractors insurance coverage. This leaves them exposed to a wide range of risks and making them particularly challenging to insure.
This gap in available and affordable coverage creates a significant opportunity for brokers, not only to expand their book of business but also to protect an essential trade that is often left vulnerable due to limited options. In this article, we’ll explore the top risk factors artisan contractors face and the specialized insurance solutions designed to safeguard their livelihoods.
Risk Factor #1: Property Damage
Even the most careful artisan can have an off day. Picture Joe installing a custom window frame, only to misjudge a measurement and crack the client’s expensive bay window. Property damage is a real concern for anyone working in clients’ homes or on their property.
Property damage insurance covers the costs of repairing or replacing damaged property, whether it’s the client’s or someone else’s. This coverage intends to protect Joe’s finances and reputation, allowing him to address issues swiftly without affecting his bottom line.
Risk Factor #2: Faulty Workmanship
Despite Joe’s best efforts, sometimes work doesn’t meet the desired standards. A client might demand a fix or refund, leading to a faulty workmanship claim. Construction defect claims are particularly challenging because they can be filed up to 10 years after a project is completed. This long tail on claims adds to artisan contractors’ financial risk, making robust solutions essential for their protection.
Errors & omissions (E&O) insurance, also known as professional liability insurance, protects Joe against the financial repercussions of faulty workmanship claims. This coverage steps in when claims arise from faulty workmanship, defects, or negligence in the services Joe provides. It provides coverage for the costs associated with fixing the problem as well as legal fees if the dispute escalates.
Risk Factor #3: Tools and Equipment Theft
Joe’s tools are the backbone of his business, but they’re also a prime target for theft. Every time he parks his truck at a job site, there’s a risk that his tools might be gone when he returns. The tools’ small size and high value, combined with the ease of selling them online, have unfortunately made tool theft a big business for criminals.
Inland marine insurance protects Joe’s equipment wherever his tools are — whether in transit, at a job site, or in storage. This policy reimburses Joe for the value of his stolen items, allowing him to replace them quickly and get back to work without significant downtime or financial strain.
Risk Factor #4: Liability for Subcontractors
Sometimes, Joe hires a subcontractor, and when he does, he risks being held liable for their mistakes. For example, let’s say a subcontractor working on a cabinet accidentally damages the client’s plumbing, causing water damage throughout the home. Because Joe hired the subcontractor, he could be held liable for the damage, even though he didn’t cause it directly.
General liability insurance with subcontractor coverage is designed specifically to protect Joe against liabilities caused by subcontractors on the job. Requiring subcontractors to carry their own liability insurance adds an extra layer of protection for Joe’s business.
Be a Champion for Underserved Artisans With Contractors Insurance Coverage
Artisan businesses like Joe’s may struggle to secure contractors insurance coverage due to their unique risks. When standard markets overlook these needs, brokers have a powerful opportunity to step in with tailored solutions. By doing so, they not only protect these essential businesses but also address a significant gap in the market.
Servicing insurance policies for businesses like Joe’s has traditionally been challenging due to cumbersome processes and a lack of options. Cochrane & Company has streamlined the process with contractors insurance programs to serve this market. We make it efficient and profitable for brokers to support this vital segment.
About Cochrane & Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.
