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Contractor Checklist: What To Do If You Are Sued

Posted by Shawn McCadden on Thu, May 19,2016 @ 05:00 AM

What contractors should do if sued

Owning a business can be uniquely rewarding, but rewards do not come without risk.  Perhaps the most dreaded of those risks is a lawsuit.  While some contractors who get sued keep that worry in the back of their minds, others avoid thinking about legal issues altogether, or worse; they assume it can’t happen to them.  But contractor law suits do happen. Often.  While you can’t guarantee that you won’t be sued, you can prepare yourself by having a plan of action in the event of a lawsuit.

Here are the steps contractors should take if they get sued:

  • Take notes about service of process.  Each jurisdiction has rules governing service of process (how you were informed of the law suit). Take note on how you were served so that you or your lawyer can determine whether there are grounds to challenge service.
  • DO NOT ignore the Complaint! Do not throw the Complaint in a drawer and try to forget about it. Failing to respond to a Complaint could result in default judgment against you or your company. The sooner you act, the more control you have over the situation.
  • Review the Complaint. Read the Complaint to gather some basic information about the suit. Who filed the suit?  Is the plaintiff suing your company, you, or both?  Why has the plaintiff filed suit? How much money is the plaintiff demanding? 
  • Checklist for contractors who get suedContact a lawyer. Do not attempt to engage the plaintiff on your own. Contact an attorney experienced in construction law.  Your attorney will help you analyze and understand your risks. If the amount in controversy is small, your attorney can advise you on how to best represent yourself. After consulting an attorney, you will be able to make an informed decision about how to proceed with the lawsuit.
  • Contact your insurance company.  If you think that you may have insurance coverage for the plaintiff’s claims, contact your insurance company immediately, since most insurance companies require prompt notification of the claim. Your attorney can also assist you in reviewing your policy and obtaining coverage.
  • Collect and preserve documents: Collect all documents, photographs, correspondence, etc. (electronic or paper) related to the case so that you can review them with your lawyer. Do not delete or destroy anything.  Hiding information from your lawyer can only hurt your case.  You could also face severe sanctions from the court for destroying or withholding information during the case.
  • Be careful who you speak to.  Your conversations with your attorney are generally privileged. However, anything you say to a third party could make its way to the other side.
  • Consider whether you can settle the case right now.  The vast majority of lawsuits end in a settlement.  Settling the case at an early stage can save a lot of cost and


You can’t guarantee that you won’t ever be sued but you can prepare yourself by having an action plan in the event of a lawsuit.


Note: This article is for informational purposes only and is not intended to serve as a substitute for consultation with a legal professional.


Renee Schwerdt Construction attourney Pittsburgh PAGuest Blogger:  Renee Schwerdt, Esq., Owner/Attorney at Plumb & True Legal Consulting and Representation.  Renee is an attorney and the owner of Plumb & True Legal, a law firm that serves contractors, architects, vendors and others in the construction industry.  Her new blog, Level Up, is available here.


Topics: Legal Related, Contracts, Guest Blogs, Customer Relations, Insurance Considerations

How To Handle Mold And Avoid Liability As A Contractor

Posted by Shawn McCadden on Mon, May 16,2016 @ 05:00 AM

How To Handle Mold And Avoid Liability As A Contractor

What contractors should do if they find moldMold remediation experts are not the only contractors who encounter mold on a fairly regular basis. Often times, the homeowner does not learn that there is mold in their house until a contractor points it out. This may be a restoration contractor, an HVAC contractor or even a plumbing contractor.  Read on to find out how contractors can handle mold at their job sites and avoid liability.


Contractors should always warn homeowners if they spot mold on the job even if that is not why they are there. Mold can pose a serious risk to the foundation of the home as well as the health and safety of the inhabitants. The homeowner can then contact an Indoor Environmental Professional (IEP) to fully diagnose the problem.

This should be good news to the homeowner. However, this puts the contractors in a tough position. Over the past few years, there have been a growing number of lawsuits against contractors who pointed out the mold to the homeowner. The homeowners often attempt to place the blame on the contractors as the source of the mold, but why?


A Way Out For The Insurance Companies

The number of claims made to insurance companies regarding mold damage began to skyrocket in the 90s and 2000s. This was good for the homeowner because the insurance providers paid to have the mold removed and the area restored. It was also good for the restoration contractors because the insurance companies were paying them to do their job. The only entity that didn't benefit from this growing awareness was the insurance provider who had to cover the costs.

Insurance companies found a way out of this predicament by including new and more severe mold exclusion clauses in their policies. This meant the insurance companies were no longer paying for mold remediation. The funds had to come from the homeowner, the contractor, a lender, or a third-party source.

Homeowners didn't want to be stuck with the bill so they began opening lawsuits against contractors claiming that the mold was a result of their work. This greatly increased the risk of working for homeowners as well as in commercial buildings.


How Can Contractors Avoid Liability?

Contractors must rely on their own insurance policies to avoid liability in many cases. Their Commercial General Liability (GPL) insurance policy is a standard tool of protection. However, there is a pollution exclusion clause included in this policy. The exclusion states that the insurance does not cover any bodily or property harm caused by the escape, dispersal, or release of pollutants.

Whether mold is considered a pollutant that is not covered by this policy is a widely debated issue. Court cases often tip one way or another without offering any universal standings. Some cases have found the policy to be too ambiguous with their definition of pollution. Others have classified mold as an airborne pollutant.

Contractor Insurance coverage for moldContractors are not advised to leave their career up to chance. Instead, contractors should consider investing in new insurance policies that are specifically designed to cover mold and pollutants. (As well as the standard GPL policy) Contractors Pollution Liability (CPL) covers liability for such pollutants with a clear definition that includes mold or fungi.

CPL may be the best tool currently available for contractors to avoid liability when mold is discovered on a property. That is in addition to proper risk management. Properly managing risk means carefully choosing what customers to work with and how the problem is approached if detected.


Dealing With Customers

The customers a contractor chooses to work with, how well they document their work, and how they approach the customer regarding mold will play a big role in how the situation unfolds. First, it's a good idea to avoid working with customers that already seem disgruntled with insurance companies.

This is especially true for mold remediation contractors where the homeowner already knows of the problem and isn't happy that their insurance policy doesn't cover the loss. They may still try to pin further damage on the contractor that outweighs the bill for the services provided. These customers are time bombs that should be avoided when possible.

Addressing the issue as carefully as possible is the final point of recommendation. It's important for contractors to put themselves in the homeowner's position. Mold remediation can be expensive work and the insurance providers have dumped the costs on the homeowner. They need to approach the subject carefully, with empathy, and with a proper course of action.

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Risk Exists

It is impossible to work as a contractor and avoid risk altogether. However, by utilizing ethical work standards, by carefully choosing and approaching customers, and by adding CPL policies to their arsenal they can greatly reduce the risk associated with mold.

RS Hall, Mold expert


Guest Blogger: R.S. Hall is the owner of several successful businesses and the publisher of the website which provides solutions for mold problems.



Topics: Production Considerations, Guest Blogs, Legal Considerations, Customer Relations, Insurance Considerations, Risk Management

Four Considerations for Contractors Offering Design - #4 is Most Important!

Posted by Shawn McCadden on Thu, Mar 12,2015 @ 06:00 AM

Four Considerations for Contractors Offering Design - #4 is Most Important!

How a contractor can sell designWith a well thought out strategy for offering design services contractors can differentiate their businesses and attract better quality clients and projects.  However if their offering is not well thought out contractors can lose a lot of money and waste a lot of time.   

If you want to offer design services consider these four important areas before you go for it.  If you are already offering design services, these same considerations can help you validate and or think a bit more strategically about your offering.


#1: Compensation

Nothing is free, neither is design.  Even if you offer it for free to prospects doing so still adds to your business overhead costs.  Charging each customer for their design is one option.  If you don't charge consider how many free designs you will complete to sell one job and add the anticipated costs for doing them to your overhead budget before you determine your markup.  How you choose to go forward with this consideration should be based on the targeted customer type you identify in your marketing plan.  

Offering design comes with risks. I also strongly recommend getting Design Liability Insurance and adding the cost of coverage to your pricing strategy. 


#2: Create a clearly defined process

To control costs and manage customer expectations you need to decide what level of service you will offer, and whether you will offer your design services at a fixed price or on an hourly rate.   At my business I used a fixed/defined process and price strategy limited to concept design.  This was because as a Design/Builder our goal was to quickly get to a contract for construction.  Completing the plans for permit application only happened if we built the project.   For our target customer type that process worked well and kept the upfront cost of making decisions and getting to a fixed price quote down for our clients.

The image below shows the first half of the Design/Build process I share with my clients.

Design build process example


#3: Ownership of the plans

Consider whether you are selling design services or plans.  If you sell plans your clients may see their project as a commodity and may want to use those plans to collect bids from other contractors. Allowing that to happen also definitely increases your design liability.  My recommendation is to differentiate your business by selling personalized design services, not plans.  Then, only offer design services to prospects who intend to hire your business to complete the project.  Plans for permit can then be created and shared with them after they commit to construction.

download shawn's free sample design build retainer agreement

Marketing design services for contractors#4: Use a supporting marketing and sales strategy

After thinking through and deciding on the considerations mentioned above the business will need a way to market and sell their offering.  The right marketing should help define your offering so prospects can prequalify whether what you offer is right for them, or not.  Doing this will help attracted your targeted prospect and save salespeople a lot of time on sales calls. This is because by doing so prospects will only need to clarify and confirm your offering when they request to meet or speak with you, you will no longer need to introduce and explain your offering. 

Your web site is a great tool to use for marketing and explaining your design services. And, if the information is on your web site, you can direct prospects to it from the other marketing tactics you use, or when they first call your office to inquire about a project that requires design.

Other Design related articles you might find helpful

Managing Risks With The Right Design/Build Insurance Options

Design and Spec Considerations for Remodelers Looking to Break $1Million

All Plans and Specifications Will Be For The Exclusive Use Of …

As Designers, Are We Honest in our Business Dealings?

10 Ways Some Architects Do A Disservice To Contractors & Home Owners

Design Options for Design/Builders: Partnering for Design

Design Options for Design/Builders: In-House Design


Topics: Design/Build Process, Marketing, Prequalifying, Plans and Specifications, Working with Design Professionals, Insurance Considerations

Design and Spec Considerations for Remodelers Looking to Break $1Million

Posted by Shawn McCadden on Wed, Feb 04,2015 @ 08:57 AM

Design and Specification Considerations for Remodelers Looking to Break $1Million

contractor_with_couple-wrIf your goal is to grow your remodeling business past the $1Million installed sales volume threshold the business will need a design and or specification process.  That process must support the ability to perform a "handoff" between the salesperson and the production team that will build sold projects.  Without adequate plans and specifications the production team and a project's lead carpenter will be constantly contacting the salesperson for the information needed to build what the customer is expecting.

Even if you do not plan to offer design services, or even if you work from plans created by an architect, it is likely the projects you build still require design and or specifications at some level. For example replacing a back entry porch and stairs can involve designing the railing style, or specifying the decking materials your business recommends to the homeowner to serve their expressed purpose.

Here are several design and specification considerations remodelers should address if their plan is to grow past $1Million. 

Be honest about the level of design you can offer

Skills needed to offer remodeling design servicesBe honest not only to your customers, but also with yourself.   I fortunately recognized very early in the building of my business that I was not a designer.  I can build any design you give me, I just don't have the right talents to design renovations at the level my target customer expected and deserved.  So, if you do offer or plan to offer design services make sure you find the right talent to do so.  That person could be an employee, or as in my case, that person could be a subcontractor.  Don't risk having your client tell you they don't really think you or someone else from your team is a designer.


Manage your risks before you offer design

Insurance coverage for remodeling design servicesFirst, make sure you can legally offer design service where your business operates.  Next, make sure you and or your employees have the right construction, product and building science knowledge and experience to offer design and or specification assistance.  Value engineering for a prospect may help you sell a project, but what if you suggest or substitute products that compromise the design, the structure and or the purpose of the project?   You may own the end result and it could cost you a lot of money.  Consider professional liability insurance coverage; sometimes referred to as Errors and Omissions coverage, to protect you from such risks.


Make sure designs and specifications are complete

Creating remodeling specificationsThis may seem like an obvious point but here me out.  If your goal is to bust past $1Million your plans and specifications should include not just what might be needed to sell the job and or get a permit.  Your plans and specs should really be communication tools that your production team will use to build from.  Measurements, product sizes, rough opening dimensions, center lines and clearances all become critical when building, and even more critical if you want to protect your margins and project schedules.   With the right plans and specifications you can protect your profits and only have to build the project once.



Design considerations for remodelersAs produced volume increase for a remodeler, that remodeler must decide between being a contractor and a construction business owner.  As a contractor you can do all of the above yourself, but breaking $1Million will be challenging, require lots of work hours and may not be practical depending on your target project types.  As a construction business owner your role will be to profitably run the business not the jobsite.  If that is your goal make sure your team members will be creating the information each department needs to successfully sell profitable projects and perform their assigned responsibilities.


read blog articles about breaking 1 million

Topics: Plans and Specifications, Design Options, Working with Design Professionals, Insurance Considerations, Breaking $1Million

MA Workers Comp Rates For Contractors May Go Up, Retroactively!

Posted by Shawn McCadden on Sun, Jan 26,2014 @ 09:00 AM

MA Workers Comp Rates For Contractors May Go Up, Retroactively!

Workers compensation rates in MA



The Workers Compensation Rates and Inspection Bureau of Massachusetts (WCRIBMA) submitted a rate filing on December 27, 2013 to the Division of Insurance on behalf of its members recommending a 7.7% increase in average rates for industrial classes. Workers compensation rates for construction workers fall under the industrial classes. 

So if the rate hike is approved contractors can expect their workers compensation premiums to increase. Using some quick math that means for classification code #5403, Carpentry- not otherwise classified, the rate for a carpenter being paid $25.00/hr will increase by about $.74/hr, or a total increase of about $1539.00 for the full year (2080 hours). 

That should help motivate contractors to add employees and help stimulate the economy...  Ready for more good news?


If you build anything they will come wr

Paying more is one thing, how about having to pay retroactively!

The proposed effective date of the rate filing is January 1, 2014. That means if the rate hike is approved as submitted insurance companies will be able to retroactively charge contractors the new rate all the way back to the first of the year.  Again, using some quick math, if for example the rate hike is approved as of March 1st, 2014, that means for a $25/hr carpenter under classification code #5403 the retroactive premium for January and February would be just under $255.00

Workers Compensation Rates and Inspection Bureau of Massachusetts

WC Code #5403 current rate: 9.61/$100 of payroll

WC Code #5403 proposed new rate: 10.35/$100 of payroll


Here’s the message the WCRIB is suggesting insurance carriers send out with all new and renewal policies:

“A filing is being considered by the Massachusetts Division of Insurance which may result in premiums different from those shown on the policy.   If it does, we will issue an endorsement to show the new premiums and their effective date.”


If you don’t like it you can speak your mind

WCRIBMA Hearing about workers comp ratesA Hearing on the Rate Filing will be held at 10:00AM on Thursday, January 30, 2014 at the Division of Insurance, 1000 Washington Street, Boston, MA.  For more information you can refer to Circular Letter #2230 and Circular Letter #2231 for details.

If you go, can you please ask if they will also write into the changes that contractors can retroactively bill their customers for the increase as well, and that all customers must pay the increase within 30 days of receiving the invoice from their contractor….?


If you plan to attend the hearing

Any person who wishes to participate as an interested party in this hearing must comply with the procedures set forth in 211 CMR 110.05 (3).  Persons who wish to present unsworn oral or written statements at the January 30, 2014 hearing are asked to submit a notice of intent to comment no later than January 28, 2014. All other persons who wish to speak will be heard after those who notify the Division in advance.


It pays to be a NARI Member

EM NARI MemberI want to thank fellow EMNARI Member Tom Messier of Mason and Mason Insurance for making me aware of this so I could share it with you.  I have known Tom for over 15 years. One reason I continue to do business with him is because he proactively shares this kind of important information with me and the other contractors he works with.  Tom also shared with me that the state has not seen rate increases since 2001.  Maybe that makes us lucky.  They did try to increase the rates by 14% two years ago, but the increase was denied.  He also shared that in the past the rate increases typically have taken place on September 1st of the year they were approved. 




Topics: Production Considerations, Estimating Considerations, Insurance Considerations, Workers Compensation

All Plans and Specifications Will Be For The Exclusive Use Of …

Posted by Shawn McCadden on Tue, Sep 03,2013 @ 06:00 AM

All Plans and Specifications Will Be For The Exclusive Use Of …

Contractor does plans for free


Do you give your plans and specifications away to prospects for free, or do you only leave plans and specifications with paying customers? 

Remember, people who want stuff for free hang around with other people who want stuff for free.  How you decide to answer this question will have a long term effect on your business and future referrals. 

If you choose to not leave your proposal with prospects unless they commit to your company, this policy should be discussed with your prospects during the initial sales call.  By doing so it will not become a surprise to them when you come back to present your proposal. 

You are presenting, not emailing proposals, right?


Sample text

Here is some sample language you can consider using inside the remodeling proposals you create for prospects.  This information is for your reference only.  Be sure you have it reviewed by your own legal council before using it.

This proposal and any related plans and specifications shall be for the exclusive use of; and will remain the property of “Construction Company” until a Construction Contract agreement for the proposed work is reached between both parties.  The acceptance of this agreement will require the owners’ signature(s) and payment in full of the specified deposit.   If this proposal is not accepted at the time of presentation, owner(s) are welcome to view all plans and specifications at the contractor’s office at a mutually agreeable time.


selling remodelingThis language is best used at the beginning of your proposal

Include your policy in beginning of your proposal so you can remind your prospect about your policy very early during the proposal presentation meeting.  If they have a problem with your policy you can discuss their concerns and both of you can decide whether it makes sense to continue and present/discuss the rest of the proposal. 



By not leaving your proposal behind you are protecting your business as well as your prospect

The information you include in your proposal comes from your many years of experience and education.  For this you deserve to be compensated.   Also, because you and your team have expereince working together, I would suggest your proposal probably contains a level of detail adequate for you and your team to build from.  But, your proposal may not have adequate detail for others to build from.  If you allow other contractors to work from your proposal they and the home owner may be making assumptions about what is or should be included to do the job correctly and to building code or safety requirements.  By allowing such things to happen you may be putting other contractors, the home owners and or the success of the project at risk. 


How much risk are you willing to accept to sell a deal?

Should you leaving plans and specifications behindI also suggest you consider the possible liability you take on by creating specifications and or project plans and leaving them with a prospect that does not do business with you. By doing so you may have put yourself into a position where the prospect or another contractor actually works from them.  If they have challenges when building the project and decide those challenges were caused by your plans and or specs, they may have legal rights to sue you.  Regardless of whether you feel you are innocent or guilty, you will need to cover your own legal expenses if you get to court and most likely will not be able to re-coup your legal costs even if you are found innocent.  If you are found guilty you may even be required to pay the legal expenses incurred by the person suing you.

If you decide to take this risk, I highly recommend you obtain Errors and Omissions Insurance Coverage or Professional Design Liability Coverage.


Some big picture thoughts for remodelers to chew on before they decide:

  • I suggest you are in the business of selling remodeling, not designs.  Can you earn a living selling designs?
  • Avoid being used as an unpaid consultant.  How does that feel when it happens?
  • Don’t let your proposals, specifications and plans facilitate the ability for some guy named “Bubba” to get the job rather than you.
  • Not every lead you get should or will be YOUR customer.
  • If you work for the wrong customers, they will be referring you to people just like them!



Topics: Contracts, Sales Considerations, Differentiating your Business, Legal Considerations, Prequalifying, Business Considerations, Plans and Specifications, Insurance Considerations

Contractors, Will Your Use Of Subcontractors Land You In Jail too?

Posted by Shawn McCadden on Tue, Aug 27,2013 @ 06:00 AM

Contractors, Will Your Use Of Subcontractors Land You In Jail too?

Contractor Sent to Jail for workers comp fraud


Being a contractor is no longer an amateur sport.  Due to government regulations and laws a contractor can get into serious trouble if he or she is not following the rules of law.   Even if you were ignorant of those rules, the government will still hold you accountable to the legal responsibilities you must accept if you run a residential construction or remodeling business.  A few weeks back I shared how a GC and his subcontractor both got fined for not following the EPA’s RRP rule on the same job due to an anonymous tip.   Between the two businesses they could end up paying about $120,000.00 in fines.   In this blog article I want to make you aware of a contractor who may just go to jail for purposely cheating regarding workers compensation.


The facts

The owners of Triple Star Roofing in Wood County Ohio were recently found guilty of fraud for failing to report their payroll to the Ohio Bureau of Workers' Compensation.  Like the RRP violations mentioned above, their business was investigated after an anonymous tip.   During the investigation bank records were analyzed for the 2004 to 2008 time period.  The investigation found that checks were issued to the same individuals on a weekly basis with many of them indicating “payroll” in the memo section.  As a result the company owners now face possible prison terms of one to five years and fines of up to $10,000.  Additional charges are still pending for the 2009 to 2012 time periods.  I am sure you would agree, they are feeling a world of hurt and are probably scared as hell.

Ohio Bureau of Workers Compensation“Schemes like this to avoid paying premium undermine the purpose of workers’ comp insurance – to protect workers who are injured on the job – and will result in unwanted attention from our investigators.”

Steve Buehrer, Administrator/CEO, Ohio Bureau of Workers’ Compensation (BWC)


What about you and your business? 

Are you operating illegally to save money and or to be the lowest bidder?  How would you answer the list of questions I pose below?  I don’t know the laws in your location, but remember, if you were in Ohio, and answered yes to any of them, you too might be facing jail time if you get caught.

  • Are you paying employees “under the table” to avoid paying payroll taxes or workers compensation premiums?
  • Are you treating employees as subs to avoid paying payroll taxes or workers compensation premiums by giving them 1099’s?
  • Are you misclassifying workers to put their payroll into a lower cost workers compensation rate?
  • Are other legal and legitimate contractors frustrated that you are stealing work away from them?

These are some of the reasons the owners of Triple Star Roofing are facing potential jail time.   I wonder how their families are doing while they all wait to see what will happen.


So let’s just say you get caught, have to pay fines, but don’t actually have to go to jail.  

ohio contractor goes to jail for fraudHow would you look at that?   I know one contractor who had that happen to him.  When I asked him about it he told me he was definitely scared about going to prison so he spent big money to hire a good lawyer to try to keep him out of prison.  He said the lawyer was successful but he was definitely sweating it right up until the final verdict.  He didn’t get any jail time but did have to pay a lot of money in fines.  He also told me that when everything was said and done, and based on all the money he saved over the years by cheating, the fine and lawyer fees were far less than the money he saved.  He told me he felt it was worth the risk.

I then asked him if I asked his wife and kids if they thought it was worth it what their response would be.  He told me he had never thought about that…

Read More Here


Topics: New Business Realities, Legal Related, Legal Considerations, Government Regulations, Insurance Considerations, Workers Compensation, Enforcement and Inspections, Violation Reports

Everything A Contractor Needs To Know About Certificates of Insurance

Posted by Shawn McCadden on Thu, Mar 07,2013 @ 06:00 AM

Carrie Van Brunt-Wiley


Guest Blogger: This article was contributed by Carrie Van Brunt-Wiley, Editor of the blog. Carrie has been writing insurance news and consumer information for since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.


Everything A Contractor Needs To Know About Certificates of Insurance

Contractors Insurance certificate


When hiring a contractor, many consumers are extremely cautious – especially those who have fallen victim to a shoddy repair job or other construction problems. That's why you should offer assurance that you’re a trustworthy, reputable contractor who won’t leave clients in a tough financial situation. How? Make it easy for potential clients to verify your responsibility for your work and your employees by providing a certificate of insurance with proof of valid coverage.


What is a Certificate of Insurance?

A certificate of insurance is the document issued by your insurance company that certifies you are covered by a valid insurance policy. Here are the most important features a customer will look for on your certificate:

  • Your policy number and the named insured
  • The effective date of the policy and the expiration date of the policy
  • The types of insurance coverage purchased
  • Dollar amounts of applicable liability

In broader terms, your Certificate of Insurance helps your customers understand what will and won’t be covered before you begin construction on their properties.

How do they work?

Contractor Insurance CoverageA Certificate of Insurance is easier for your client to acquire than it would be for them to see your actual insurance policy. It also provides the information they’ll need if they do need to file a claim without divulging any of your confidential information such as payroll and sales figures.

It’s important to note that your certificate is not a substitute for your policy itself. You are responsible for requesting the proper information on your certificate (see the bullets above).

Obtaining your Certificate of Insurance could also help you sell jobs if you’re able to produce a copy with your proposal. Customers are much more likely to choose a trustworthy contractor who offers information upfront as opposed to one who is unable or unwilling to provide valid credentials or who waits until the information is requested.

How do I get my Certificate of Insurance?

All you have to do to secure your Certificate of Insurance is contact your licensed insurance agent, make sure you are actually insured with a valid policy, check that you’ve got the coverage you need and request a certificate. You may even be able to view certificates online and print multiple copies as needed.

What does “additional insured” mean?

What additional insured means“Additional insured” is an option to add coverage for another party to your policy. For example, your client will likely request to be listed as an additional insured in order to defer liability for any accidents or injuries that occur on their property during your project. If you’re a contractor working with subcontractors on the same project, you may also add a named insured since you share joint liability to pay workers’ compensation if an employee is injured. However, the primary policyholder will remain fully responsible for covering the premium payments.

Remember, it’s best to be upfront and honest with your clients in order to document that you’re running a trustworthy contracting business. If you have any questions about your contractor insurance coverage or your Certificate of Insurance, contact your licensed agent and make sure you’ve got everything you need to prove to your clients that you’ll get the job done right.

Knowing you're prepared for a problem can give clients the assurance they need that there won't be any. Wear that assurance like a badge by providing your Certificate of Insurance upfront to potential clients. It could give you a big edge over your competitors.


Related Topics

Does Your Construction Liability Insurance Policy Have the Right ‘Coverage Trigger’?
Contractor Insurance Can Help Set You Apart from Competitors
Managing Risks With The Right Design/Build Insurance Options For Your Business


Topics: Sales Considerations, Insurance Considerations

RRP Conundrum: To Test or Not to Test for Lead Paint.

Posted by Shawn McCadden on Sun, Feb 24,2013 @ 06:00 AM

RRP Conundrum: To Test or Not to Test for Lead Paint.

RRP Lead test considerationsSince the EPA RRP rule came into effect in April of 2010 renovation contractors have debated and bantered the topic of doing lead testing before they offer to sell and or perform renovations at pre 1978 properties. Due to lead testing disclosure requirements many contractors and properly owners have concerns about doing the testing.  Once a property is identified as containing lead many other laws, legal considerations (page of related articles) and potential liabilities kick in for both.   The catch 22 on this subject is that, under the RRP rule and the OSHA lead in construction regulations, if testing is not done before work begins, contractors must assume there is lead present.   It’s only natural under this scenario then that renovation workers, property owners and tenants at those properties are also left to assume, and worry, that there is lead and conducting renovations may leave them exposed.

Should I test for lead paintOften discussions on these topics get passionate when contractors express their concerns about the liability they feel the rule exposes them and their businesses to even if they follow the rule and comply with all of its lead safe work practices and documentation requirements. Many contractors feel the EPA should have written some level of protection from liability into the rule for those renovators who abide by it. 

Recently I discussed these considerations with John MacIssac of ASAP Environmental.  John is MA State Certified Lead Inspector and Risk Inspector and an expert in renovation and construction.  During that conversation John and I assembled a list of the considerations that seem to rise to the top during those discussions.  

Who pays for RRP lead testing?

If a certified renovator will not be the one doing lead testing for RRP purposes, the testing must be done by a licensed lead testing professional.  Licensed lead inspectors in Massachusetts and other states cannot accept money for lead testing from contractors under contract with a property owner.  Therefore the homeowner is responsible for payment of all services relative to the lead testing.

Are you removed from liability if RRP lead testing is done?

Depending on the contractor liability insurance that you have you may be removed from liability if you do the testing, cleaning and cleaning verification yourself.  If you do not have insurance you are not removed from liability.  If you have a licensed lead inspector do the testing and clearance you are removed from liability if the company you hire to do the testing has their own coverage.

Considerations related to doing testing yourself using test kits vs. using a licensed lead Inspector

    • Testing for lead with FRX gunTime it takes to do the testing and fill out the paperwork
    • Cost of test kits depending on number of components to test
    • Damage to components
    • The EPA recognized lead test kits are qualitative where as a XRF test is quantitative.   Under the EPA RRP rule’s legal definition of lead paint, the amount of lead present may be below RRP definition, but, if using test kits, any positive result triggers need for compliance even if below definition.

Pretesting to establish a point of reference when clearance testing will be a requirement at completion

A pretest for lead dust could establish whether the site is already contaminated or not.   If it is, who will perform and pay the related costs to get it cleaned up before the contractor starts renovation work so the contractor is only then responsible to clean up affected work areas and pass dust wipe clearance testingat completion?


Education will be key in preventing liability

RRP TrainingThere are typically no easy answers to these considerations or guaranteed ways contractors can sell and do their work to prevent the possibility of liability.  That said education about the considerations and available options is probably the best way for contractors to protect themselves and their business.

If you’re in Massachusetts and want to learn more about the RRP rule, lead testing considerations and lead testing options John will be hosting a free Lunch and Learn Session at National Lumber in Mansfield MA on March 3rd, 2013 from noon to 1PM.   The Lunch and Learn Session will be held before the start of a workshop presented by RRP Instructor and RRP Rule expert Mark Paskell titled RRP and OSHA Workshop for Contractors and Remodelers” that will also include a discussion about the differences between the EPA RRP rule and the Massachusetts RRP regulations.



Topics: Effects of the RRP Rule, OSHA Considerations, Legal Considerations, Government Regulations, Insurance Considerations, RRP Related, Lead Test Kits and Testing

Contractor Insurance Can Help Set You Apart from Competitors

Posted by Shawn McCadden on Sun, Feb 10,2013 @ 06:00 AM

Carrie Van Brunt-Wiley


Guest Blogger: This article was contributed by Carrie Van Brunt-Wiley, Editor of the blog. Carrie has been writing insurance news and consumer information for since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.


Contractor Insurance Can Help Set You Apart from Competitors

Differentiation for contractorsAlways remember this: Your customers have plenty of other options. So you need to make sure that you stand out from your competitors. That's easy enough when you've done a job previously for a customer – your work speaks for itself. But what about when the customer has never hired a contractor? How do you differentiate yourself among a group of people who say they can do the same things you can?

One way is by assuring your potential customer that you have something that other contractors might not – especially the jacks-of-all-trades and the less reputable competitors that could be undercutting your prices because of a lack of expertise or experience or both. That “something” is general liability insurance coverage.

That's what will cover any damage in case you or an employee has an accident or makes an error that causes damage to a customer's property or that of a neighbor. You're probably thinking, "I never have accidents." But remember, this coverage will cover employees as well. Are you that sure of everyone who works for you?

Offer Proof of Coverage

Certificate of Insurance for contractorsWhen you show your prospective customer your certificate of insurance, what you're really showing him is that you're taking responsibility for the project and anything that happens on the job. Ask the customer whether every contractor he's considering can make that claim. The Better Business Bureau also recommends that customers ask to see a contractor's certificate of workers compensation coverage. Again, you'll be demonstrating that you'll step up in case one of your employees is injured while working on the project. Remind the customer that otherwise, he or she could be held financially responsible if property is damaged or someone is injured while work is being done on their home.

Warn Them

Some contractors could claim that homeowners insurance will cover the customer in case something happens during a project. That claim is just not always true. And not only is it not always true, but if the homeowners has to file the claim on their own policy their premiums will likely skyrocket when the policy renews.

Why a Contractor needs InsuranceAs a responsible contractor, you owe it to your customers to let them know that and to let them know you have the right coverage if there is a problem.

Remind them, also, that price shouldn't be their only consideration in selecting a contractor, neither should insurance. While having proper insurance and licenses should give the customer an idea of your professionalism, you also can prompt them to check references from your customers. Let them know there is a difference, and that a cheap project often can be just that – a cheap project.


Topics: Differentiating your Business, Insurance Considerations