Insurance Companies Rethinking Coverage Due to EPA RRP Rule

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Insurance Companies Will Be Rethinking Coverage and Premiums Due to EPA RRP Rule

Many liability insurance policies do not cover lead poisoning or contamination.  Renovators should be sure they are working with an agent who is up on the EPA RRP rule and should sit down with their agent to review their coverage needs and options.  Tom Messier, with Mason and Mason Insurance, tells me that insurance companies are starting to become aware of the RRP rule.  Insurance is all about risk. The greater the risk, the higher the cost of insurance will be.

Increased risk of liability due to lead awareness as well as the government mandated certification requirements are likely to affect a renovator’s ability to get a policy as well as the premium charged by carriers who offer coverage.  Tom told me he predicts that existing policies will not be renewed unless a renovator can show they are certified firms and use certified renovators to oversee the work their company performs.  He also predicts insurance carriers will start requiring the insured’s proof of compliance with the rule as well as proof of compliance and insurance coverage for the trade partners the insured renovator works with.  Tom stressed that this would be for both liability as well as workers compensation insurance coverages. He said that even if they are self-employed, insurance carriers will likely require all trade partners have their own workers compensation policies as a way to prevent injured or poisoned trade partners from claiming against the general contractor’s policy. 

Also Tom warns, just as many insurance companies now review the contracts contractors use with customers and trade partners before offering or renewing a policy, Tom predicts carriers will be asking to see completed copies of the required RRP documentation used by contractors.   I asked Tom what renovators should do to protect themselves and be sure they can maintain coverage going forward.  Tom’s response; “Document, document, document!!!” 

One other area that will likely be of concern is lead coverage in policies for landlords who own pre-1978 properties.  Here too, compliance with RRP rules and documentation of work practices used for renovations and repairs will likely become required conditions of obtaining and keeping coverage.  The EPA RRP rule may also cause an increase in insurance coverage on properties built prior to 1978, for landlords and maybe even home owners.