Heavy rains can quickly lead to flooding, even if you don’t live near a river or other body of water.

While the best flood protection for your tools and equipment may simply be higher ground, what if, despite your best efforts, your valued property disappears beneath the rising water?

The good news is your inland marine coverage should cover your loss. While standard commercial property policies exclude losses due to flood and require that such coverage be provided under a separate policy, inland marine policies, such as contractors equipment coverage forms, typically offer much broader protection and far fewer exclusions.

One key caveat: Many of the inland marine coverage forms utilized by contractors are unique to the insurance carrier providing the form, so check with your insurance provider to determine just what is and isn’t going to happen under your specific protection program.

Additionally, while flood is still the number-one cause of catastrophic damages, according to the Federal Emergency Management Agency, don’t neglect to discuss what protection you have, if any, under your policy for other types of losses, such as hurricanes, earthquakes, theft or employee dishonesty.

Home-Garaging Equipment

Many contractors use their home garage as a shop to make things or store tools, equipment, hardware or materials. That’s why it is critical that your business insurance protection is adjusted to include the home-based exposure. One key reason? Standard homeowners insurance policies contain limitations and exclusions that eliminate coverage for many business liability and property exposures.

What would be the impact on your business if the location and/or its contents were lost to fire or storm?

Have you discussed your need for liability protection at your home with your business insurance provider? If your shop is located in a detached garage, what about coverage for the garage building itself? Is the coverage you’ve chosen to protect your tools, equipment hardware and other materials going to fully apply at your home location? Similar questions need to be considered for all of your business insurance coverages, such as business income.

Home may be where the heart is, but be sure your vital business insurance protection is there as well.

Odds are you’d never purchase a new truck or front-end loader without cranking it up and trying it out, making sure it could do the job expected. Do you do the same for the operators?

For example, safety experts recommend that any employee who will be driving a truck for you be given a road test of their driving skills prior to putting them in the driver’s seat. To be truly effective, the examiner in charge of the test should fully know how to properly operate the vehicle, as well as be familiar with the prospective operator’s past experience. The test should include all of the skills necessary: use of all controls; traffic operations, including backing, parking, slowing, stopping, passing and turning; general driving habits, such as alertness, stamina and patience; driving rules and regulations pertaining to the vehicle; and handling of the necessary actions/equipment required for the vehicle’s loading and unloading.

For each skill or knowledge area tested, the applicant should be given a pass/fail grade. Each area of weakness should lead to further training or a corresponding limitation in the scope of the approved driving activities of the applicant. Records of such tests and scores should be kept, providing useful documentation in the event of an accident or claim resulting from the applicant’s actions.

Remember, your drivers are taking your vehicles and your insurance coverage on the road every time they drive. Wouldn’t it be a good idea to make sure they are capable of protecting both?

Owners and general contractors commonly request to be added as “additional insureds” to a subcontractor’s policy. The intent is to protect the owner/GC against vicarious liability claims arising from the activities of the sub. For example, the subcontractor’s employee accidentally loses his grip on a tool, dropping it from a scaffold, whereupon the falling tool injures a pedestrian passing on the sidewalk below. While any liability claim against the sub will go directly to the sub’s insurance, the GC and owner may also find themselves drawn into the suit, with the claimant arguing they are liable as a consequence of bringing the sub onto the job site. Having themselves added as additional insureds to the sub’s policy is an attempt to make the sub’s coverage the primary source of defense and payment for the claim.

But there are numerous potential pitfalls to such an arrangement. These may include, but not be limited to, inadequate coverage (due to exclusions or limitations) and/or inadequate coverage limits (due to previous claims being paid out under the policy draining the available limits).

An alternative to the additional insured approach is to arrange for the subcontractor to purchase a separate liability policy specifically designed to protect the named insured from vicarious liability arising from the actions of the sub. Two such policies are known as an owners and contractors protective liability policy and project management protective liability. Each provides separate limits of coverage from the sub’s regular liability policy.

The two differ in several ways as to who can be insured and how the policy is structured, but both are potentially attractive approaches to the vicarious liability issue. Talk to your insurance provider about whether these or other alternatives may prove of value for use in your own contractual arrangements, either in the position of an owner/GC or as a sub.

Thank you for your referrals.

LEED is an internationally recognized green building certification system, providing third-party verification that a building or community has been designed and built using strategies that improve performance on energy savings, water efficiency, CO2 emissions reduction, indoor environmental quality, and stewardship of resources and sensitivity to their impact. Developed by the U.S. Green Building Council (USGBC), LEED provides building owners and operators a concise framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.

There are both environmental and financial benefits to earning LEED certification. Not only does it make your firm more marketable, but it also is required in many projects these days.

To learn more, including how to qualify for a LEED rating, visit the USGBC website at usgbc.org.