Our local building department requires that a contractor furnish certificates of insurance when obtaining a building permit. The required types are general liability, WC, and disability.
If you are knowledgeable about general liablity insurance, please chime in here.
Legitimate GCs, with general liability coverage that includes contractual liability coverage, are being underbid on large jobs by small operators who are in fact carpentry subcontractors and who provide only artisan type liability coverage certificates.
We are in New York, where a GC policy premium is in the $32K to $39K range, and a small carpenter sub can pick up an artisan GL package for about $5K.
What factual information can we provide the building department, so that they know the difference between the two types of coverage, and can spot it when reviewing certificates?
Replies
Gene,
Your permitting requirements must not be as stringent as they are here in Florida as a sub like a carpenter (no matter how large the frim) would not be able to obtain the permit for the project that a GC could.
i.e. the carpentry sub cannot pull a permit for say..a whole house or commercial building while the GC can.
I know that info doesn't help you a darn bit but it sounds like your might be a problem specific to your area? Maybe some guys local to you will chime in?
Mike
Is disability separate from WC?? Never heard of such a thing, aside from private disability insurance, which would be absurd to require as almost no one has it.
As far as insurance levels go, what your building department is doing is simply asking for insurance--they are not asking how comprehensive it is, what it covers, or whether it's really even the right insurance for the project being permitted.
Who cares, anyway. Your job is to sell the project to the client... your firm, your services, your price. In most places anyone with a contractor's license can pull a permit for a new home, and in many places there isn't even licensing. Everyone's premiums are tied to their volume, their payroll, their subbed volume, etc. An artisan doing a $1M home should pay about the same premium that you would, for that project.
Maybe there's something I'm not getting.
Contractual liability. Never seen it in a sub's insurance package.
Contractual liability... that's not a term that my 1" thick policy uses. Covers personal injury and property damage, that's it. Are you required to have more than that?
Gene, as I am are in the fine empire state, which has some fine nutso "scaffold laws".
The way it has been explained to me is, if I hire a sub, no matter how well insured he is, as the GC my liability is the policy that covers all his employees if they are injured,cause injury,or damage.
Rates are based on volume, but in most other states an insured sub will not be counted in that volume- they are already insured. NY insurers get to double dip, but there is only a couple of companys that will even write a GCs policy in NY.
I don't know how different the laws are in other states, everything I've said may be wrong or dated, but I do live about a strong 5 iron from the CT line, and GCs across the line pay a fraction of what I do for liability.
As to Genes ?, the difference in cost of insurance shouldn't be enough to make or break a sale of any job I would want, let the hackers and the people who hire them take their chances.
From an insurance website, here is a cheap little explanation. Every kind of "packaged" (read AIA, AGC, JLC Contractor Legal Kit) kind of agreement I have ever seen used between owner and contractor calls out this "contractual" stipulation in its insurance requirements.
Outside the context of insurance, contractual liability (or liability because of a contract) has a very broad meaning—a promise that may be enforced by a court. Consider the following simple example. I agree to paint your house for $1,000 and collect $500 prior to the job. After I accept the $500, I obtain a more lucrative offer and never show up to paint your house. You can go to court and claim the $500 you paid me, as I have breached the contract. Your claim is a contractual liability claim.
If I have a savvy client, or maybe just some dummy that hired herself a lawyer to review my contract and insurances, they are gonna see to it that I have contractual coverage.
The typical artisan policy covers neither contractual incidents, nor deals in any way with subcontractors.