Why you need to carefully read your insurance quote

Yesterday I got a call from a current client asking me why my quote to renew his liability policy was $400 more than a quote he got from another broker for the same insurance company. I asked him to fax me the quote for review. While the insurance parent company was the same, the coverage was not comparable at all. The "cheaper" quote stripped out some important coverages (it did not cover any water damage, no overspray coverage, no contractual liability, and defense costs would be paid out of the limits of insurance instead of the insurance company coffers). The other broker made no attempt to explain the difference.

The point is you must carefully read any insurance proposal to see if it fits your needs. Cheaper policies almost always have something vital missing.

Is the name of the insurance company listed on your quote?

Believe it or not, some insurance brokers send out written quotes for liability or workers compensation insurance but will not list the name of the actual insurance company providing coverage. Why do they do this? Competition.

They do not want you to be able to compare your quote with the quote from another broker representing the same or similar insurance companies.

When you get an insurance quote, always insist that the quote contain the name of the actualinsurance company providing your coverage. This will allow you to research the carrier online and compare quotes from different brokers.

Why do I need liability insurance? I've never had a problem with my work.

I hear this all the time from contractors who have worked for years without insurance and never had a problem. I tell them that's great! It shows they are quality craftsmen with satisfied customers. Unfortunately, you can't please everyone all of the time. Many contractors find themselves the victim of unscrupulous clients who are looking for a reason to sue and "recoup" the cost of their home improvements. Some contractors merely find themselves caught up in a lawsuit simply because they were on the wrong jobsite with another contractor who had a problem. When an accident or injury occurs someone pays.

How does a Manifestation clause alter a contractors general liability policy?

In an attempt to offer a cheaper version of a liability policy, some insurance companies offer a manifestation clause. This clause usually states that the insurance applies to injury or damage that FIRST occurs, FIRST diagnosed, or becomes apparent to any person.  If the injury or damage is continuously or progressively deteriorating, there may be no coverage.