While the purpose of Commercial General Liability insurance is to provide protection in the event of legal liability for bodily injury or property damage, it is such a broad scope of coverage that many grey areas exist. Assessing risk effectively plays a central role in getting South Western Insurance Group Limited’s brokers the safeguards their contractor clients need, especially those in higher risk classes. “Our brokers are very involved in assessing risk,” says Toronto branch manager, Ghazal Hamid, “but because they work with so many types of contractors, collaboration is key to ensure we both understand a specific client’s operations, and that relevant exposures are appropriately covered.” This is especially important, he adds, when there can be so much overlap in today’s contractor risk. “Some contractors cover the whole spectrum: they can do Electrical, they can do Plumbing, they can do Landscaping, they can do Roofing – some even manufacture their own product. So while total exposure can be very high in these cases, the percentages of that exposure can vary.” And that, says Hamid, is one of the best reasons for working with an MGA like South Western Insurance Group Limited, where endorsements and exclusions can be added/subtracted on a CGL policy to correctly match the relevant exposure appropriately. As a group, contractors are subject to a variety of exposures, therefore assessing a contractors risk is not always so ‘cut and dry’. When considering contractors, one should look out for the likelihood of faulty workmanship exposures, various failure to perform exposures and the possibility of environmental exposures. “The GL policy’s main purpose,” Hamid explains, “is to protect contractors from an accidental occurrence – not from a situation where a process or product is found to be flawed or inadequate after the fact. So if I were a broker, I would definitely be advising my contractor clients to include some faulty workmanship coverage as part and parcel of their CGL coverage.” At the same time, he continues, failure to perform coverage is a good idea for contractors involved in Installation exposure such sprinkler installation or alarm installation. And in general, the need for some kind of limited pollution coverage is always a good idea for contractors as there can be possible revelations of environmental exposures during renovations. Overall, Hamid says, South Western Insurance Group Limited’s approach to contractor insurance is to go broad, then scale back as required to reflect the operations in question. “Our contractor insurance is not an off-the-shelf product, so we are able to give brokers the most favourable options out there. Because we have a lot of in-house authority in this area, the better able a broker is to communicate their client’s operation and actual exposure, the more efficient our underwriters are at providing a viable product. That is the kind of mutual rapport we are always striving to build with our brokers.”
