Is your liability coverage short circuiting?

Is your liability coverage short circuiting?

Contractors Need Errors & Omissions Insurance

You’ve built your business through professional service and thorough work. Electrical contractors offer a wide range of services: low voltage or high voltage, inside wiring or traffic signalization, industrial or institutional. But occasionally things go wrong. Working with Enders to review your business insurance program can help you to move forward during the most challenging claims. 

If you are relying solely on the General Liability of your Commercial Package or Businessowners Policy to respond in the event of a loss, you’re rolling the dice. This might not be enough given the complexity of your work. While General Liability will typically respond for damage that you cause to person, or property, it is not broad enough to protect against Errors & Omissions. 

Fortunately, Contractors Errors & Omissions Coverage can be incorporated into your insurance program to protect you after you complete a job and you are held responsible for faulty: installation, workmanship, materials and design. Beyond payment of claims, Contractors Errors & Omissions Coverage could include legal fees to defend you in addition to your policy limit.  

Even with a  spotless claims history, mistakes can happen. One uncovered loss could change the entire trajectory of your business. 

Imagine that you design and install an electrical system with wiring under the concrete ground floor for a new store. After the store opens, the owner asks you to correct wiring that can’t handle the power load. General Liability will not respond. Consider the installation of a circuit breaker that was recalled, but used in a job because it was already on your truck. If the load is too great and the breaker fails and causes a catastrophic fire, your General Liability will not respond.  

Simply put, your Contractors Errors & Omissions carrier will pay sums that you become legally obligated to pay as damages because of a covered claim. The damages must have resulted from: 

  • A negligent act, error or omission while acting in the business capacity described in the declarations of the policy  
  • A defect in material or in a product sold or installed by the insured while acting in that capacity