Hi
Please give your opinion:
Husband is the owner of a hardware store. He sells cabinets & counter tops for bath & kitchen.
Wife has general contractor license and owns a seperated contractor business. She hire her husband to do her construction jobs.
When husband sells cabinets, his wife's shop takes care of installation.
I proposed quotes for both business as follow:
1. Husband's shop( Hardware shop): BOP for cabinet, hardware store.(No installation)
2. Wife's Contractor business: General Contrator liability & WC.
Do you think these policies cover their businesses properly?
Please advice.
Thank you
Harry
Best coverage for Hardware Store/General Contractor
Moderators: Josh, independent guy
Re: Best coverage for Hardware Store/General Contractor
Harry,
Just to clarify -
1 - Hardware store, which sells, amongst other items, kitchen/bath cabinets and counters - no installation (this is not a store with a backroom kitchen/bath cabinet or counter manufacturing operation - strictly sales);
2 - A GC who builds homes and purchases materials, kitchen/bath cabinets and counters from the hardware store;
3 - One of your carriers is comfortable with the hardware store operation and has agreed, after reviewing the ACORD and any supplemental applications, to issue a BOP for the operation. The same is true for another carrier writing coverage for General Contractors who has agreed to issue the GL. We will assume that you have placed WC for both operations. You advised each business owner about how the basis of premium is determined for their operation for both GL and WC and the need to secure Certificates of Insurance for all subcontractors. You have discussed what is and what is not covered by the recommended policies. You have discussed coverage on commercial autos, installation floaters, tools and equipment, bonds, EPLI, Umbrella Liability, life, health, home and personal auto, and pet insurance for rover who lazily greets customers at the hardware store. You presented them with a list of the recommended coverage they declined to purchase, if any, and had them sign off on the list, which you will keep in their file. Finally, and you probably did this up front, you asked your clients to tell you a bit about their businesses (how they got started, what they did before they entered into their current vocations, where their 5 year business plan takes them, what have been the toughest lessons to learn and what have been their sweetest successes, etc.), you asked them to discuss their thoughts about their insurance programs and what they expected from their agent, you ask them to tell you about their most difficult claim (how it happened, how the claim was settled, what steps they've taken to avoid similar claims in the future). You know the routine, get your client to talk and just sit back and listen. From all you've heard and learned about your clients and their operations you feel good that they are a good fit for your agency and your carriers, the policies you've recommended will satisfy their needs, and the financial strength of the carriers issuing the coverage is at least A- or above. You have advised them that you are not an attorney nor are you an accountant and, as such, you are not competent to advise them about the indemnification and/or hold harmless wording in any of the agreements they employ in their operations or the IRS definition of an employee. You suggest that they may want to get up with their attorney to discuss ways to contractually transfer risk in their operations and with their accountant to discuss tax and payroll issues.
All of that being said, you seem to have done an acceptable job to get started with these clients. I'm sure I've missed something, but then that's why my E&O carrier makes the big bucks.
Good luck!
Just to clarify -
1 - Hardware store, which sells, amongst other items, kitchen/bath cabinets and counters - no installation (this is not a store with a backroom kitchen/bath cabinet or counter manufacturing operation - strictly sales);
2 - A GC who builds homes and purchases materials, kitchen/bath cabinets and counters from the hardware store;
3 - One of your carriers is comfortable with the hardware store operation and has agreed, after reviewing the ACORD and any supplemental applications, to issue a BOP for the operation. The same is true for another carrier writing coverage for General Contractors who has agreed to issue the GL. We will assume that you have placed WC for both operations. You advised each business owner about how the basis of premium is determined for their operation for both GL and WC and the need to secure Certificates of Insurance for all subcontractors. You have discussed what is and what is not covered by the recommended policies. You have discussed coverage on commercial autos, installation floaters, tools and equipment, bonds, EPLI, Umbrella Liability, life, health, home and personal auto, and pet insurance for rover who lazily greets customers at the hardware store. You presented them with a list of the recommended coverage they declined to purchase, if any, and had them sign off on the list, which you will keep in their file. Finally, and you probably did this up front, you asked your clients to tell you a bit about their businesses (how they got started, what they did before they entered into their current vocations, where their 5 year business plan takes them, what have been the toughest lessons to learn and what have been their sweetest successes, etc.), you asked them to discuss their thoughts about their insurance programs and what they expected from their agent, you ask them to tell you about their most difficult claim (how it happened, how the claim was settled, what steps they've taken to avoid similar claims in the future). You know the routine, get your client to talk and just sit back and listen. From all you've heard and learned about your clients and their operations you feel good that they are a good fit for your agency and your carriers, the policies you've recommended will satisfy their needs, and the financial strength of the carriers issuing the coverage is at least A- or above. You have advised them that you are not an attorney nor are you an accountant and, as such, you are not competent to advise them about the indemnification and/or hold harmless wording in any of the agreements they employ in their operations or the IRS definition of an employee. You suggest that they may want to get up with their attorney to discuss ways to contractually transfer risk in their operations and with their accountant to discuss tax and payroll issues.
All of that being said, you seem to have done an acceptable job to get started with these clients. I'm sure I've missed something, but then that's why my E&O carrier makes the big bucks.
Good luck!
Re: Best coverage for Hardware Store/General Contractor
InsMgmt gave a good review, a few extra points:
1. It looks like you didn't write WC for the hardware store. I've never had to deal with this specific situation but I would tend to think that in your case, if the husband were injured on the hardware store premises preparing the product from that standpoint, that there may not be coverage under the contracting WC. It may vary from state to state but if you are able to combine husband/wife companies on the same WC, then having both entities named on the same WC policy will eliminate that problem, as well as avoid double dipping of officer minimum payrolls.
2. If you have two different GL insurers covering each operation, you could have a subrogation issue? If, due to being husband and wife, there are legal preventions that won't permit the wife's insurance company from subrogating the husband's, then I do not know about them as I am not an attorney who would know about such a thing. But certainly if these were two non-married partners who have split their operations into separate entitites with separate ins policies, couldn't this be an issue? Perhaps solved by either waivers of subrogation or perhaps just finding an insurer that will add both names(again, if husband and wife companies are combinable)?
These were just a couple of extra things that I thought of and am interested in your reactions, I disclaim that I've not got the time to look for additional points.
1. It looks like you didn't write WC for the hardware store. I've never had to deal with this specific situation but I would tend to think that in your case, if the husband were injured on the hardware store premises preparing the product from that standpoint, that there may not be coverage under the contracting WC. It may vary from state to state but if you are able to combine husband/wife companies on the same WC, then having both entities named on the same WC policy will eliminate that problem, as well as avoid double dipping of officer minimum payrolls.
2. If you have two different GL insurers covering each operation, you could have a subrogation issue? If, due to being husband and wife, there are legal preventions that won't permit the wife's insurance company from subrogating the husband's, then I do not know about them as I am not an attorney who would know about such a thing. But certainly if these were two non-married partners who have split their operations into separate entitites with separate ins policies, couldn't this be an issue? Perhaps solved by either waivers of subrogation or perhaps just finding an insurer that will add both names(again, if husband and wife companies are combinable)?
These were just a couple of extra things that I thought of and am interested in your reactions, I disclaim that I've not got the time to look for additional points.
Re: Best coverage for Hardware Store/General Contractor
Hi Insmgnt, Rcenters
Thank you for your detail & great opinions. This is a great place to look for helps.
I am a P/C agent and just start to write comercial. The insurance carrier underwriters even refused to give me advice. I do not know what to do without your helps.
Again. Thanks a lot.
Harry
Thank you for your detail & great opinions. This is a great place to look for helps.
I am a P/C agent and just start to write comercial. The insurance carrier underwriters even refused to give me advice. I do not know what to do without your helps.
Again. Thanks a lot.
Harry
Re: Best coverage for Hardware Store/General Contractor
Harryle,
Please enroll in a CPCU class as soon as possible.
Good luck!
Hal
Please enroll in a CPCU class as soon as possible.
Good luck!
Hal