Why offering your client a combo CPL/Professional policy is better than standalone CPL:
- Professional exposures are generally excluded from General Liability and monoline Contractors Pollution Liability policies.
- In the course of their normal operations, contractors face all types of professional exposures. They may make slight adjustments on the provided plans to get the job done properly, they may supervise subcontractors, or provide other recommendations which could potentially be questioned in the event of a claim.
- Coverage starts as low as $5,000 and there are several product enhancements available.
Claim scenarios involving professional claims for contractors:
- General Contractor/Construction Manager was overseeing the construction of a new retail facility. The in-house engineer called for the removal of a nearby billboard sign; however upon further review, the engineer realized the sign could stay intact. This information was not relayed fast enough to the contractor onsite and the sign had already been removed. When our insured tried to replace the sign, they were told by the city that zoning provisions had been changed, and the sign could not be reconstructed in its original location. The billboard owner sued for damages and payment is in excess of $100,000.
- While installing new overhead electrical lines, a utility contractor had a subcontractor sinking the new utility poles. The subcontractor hit an underground sewer line with an auger while installing the new poles. Through contractual liability, the utility contractor was responsible for the actions of the subcontractor. Cleanup of spilled sewage and repair of the sewer line amounted to $190,000.
- A remediation contractor excavated a small underground diesel tank near a distribution warehouse and noted that stained soil surrounded the tank. The project manager advised the firm to continue excavating around the tank, which pulled up the contaminated soil. Because of the foundation’s proximity to the distribution center, the excavation of contaminated material without proper shoring equipment caused the building’s wall to collapse. The distribution center’s walls and roof also collapsed. Reconstruction costs, business interruption, lost profits and additional remediation expenses totaled $1.2 million.
- A general contractor retained an architect in a design/build delivery system to design, procure materials and construct a structural retaining wall at a residential subdivision. Because the design lacked a drainage system behind the wall, the wall settled and cracked as a result of hydrostatic pressure. The owner sued for damages in excess of $500,000 due to necessary underpinning for structural correction of the residential foundation system. The general contractor was responsible for $200,000 in damages.
- A street/road contractor was subject to cleanup costs and business interruption expenses in excess of $500,000 when they ruptured an unmarked petroleum pipeline. The contents were released into the subsurface soil and groundwater because of the contractor’s in adequate response to the rupture.