A Roofing Contractor’s Guide to Controlling Liability Insurance Costs

Why your insurance has become more expensive?

As many of you know from first-hand experience, your insurance became more expensive recently.

You are not alone!

Without delving too deeply into why I summarize here some of the contributing factors for both insurers and insureds:

  1. Competition between insurers for marketplace share between 2005 and 2017 was fierce.
  2. This competition drove premiums downwards to a point that claims costs exceeded written premium, delivering underwriting losses to insurers.
  3.  The poor losses to premium ratio became unsustainable.
  4. Even insurers’ return on investments was insufficient to offset underwriting losses.
  5.  Natural catastrophes peaked in 2017 resulting in the most expensive claims year in insurance history
  6. With cheap insurance available for 15 years, the insurance purchaser in many cases became generally less disciplined with risk management and loss prevention, even with poor claims experience the insurance purchaser could shop and change insurers for a cheaper annual premium
  7. The value proposition of brokers and insurers became less about advice and coverage quality and more about providing a cheap product.

Tips to help control the cost of your Commercial General Liability Insurance

The main purpose of this paper is to deliver some hints you may find useful in keeping your general liability insurance costs under control in this hardening insurance market. The following suggestions are drawn from my own experience and I hope you find them useful.

  1. Keeping an accurate tracking record of gross receipts by each operation/work type.
  2. Tracking your success in negotiating alternatives to specifications requiring the use of open flame.
  3. Recording work involving torch and hot asphalt work vs. less hazardous applications.
  4. Recording how much of this hot work is new roofing work vs. re-roofing work.
  5.  Consider prohibiting smoking on the roof, in the work area and arrange designated smoking areas off the job site.
  6. Tracking your work performed as a subcontractor to a general contractor or another roofing contractor.
  7. When working as a subcontractor insisting on copies of general/prime contractor arranged insurance.
  8. When subcontracting work to others, insisting that you are added to subcontractors’ general liability insurance as an Additional Insured.
  9.  Supplying your insurance broker with a copy of your health and safety Certificate Of Recognition if you have achieved this.
  10.  Try to negotiate a Limitation of Liability in contract indemnification agreements.
  11. When renewing your liability insurance ask all officers and employees to confirm that they are not aware of any situation that could give rise to a claim against your company.
  12. If your company sustains an accident that becomes a claim against your current or prior insurance, communicate any changes you have made to corporate procedures to ensure the situation does not re-occur.
  13. Agreeing to a higher deductible.

Read the full article here for more insight on how to control your general liability insurance costs: https://www.mediaedgemagazines.com/issues/on92/?page=16

professional insurance brokers - simon fenn in toronto, ontario, canada.

professional insurance brokers – Simon Fenn in Toronto, Ontario, Canada.

 

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