By: David Dybdahl

There are significant changes in the insurance marketplace in store for restoration contractors in 2019. These changes will adversely affect many restoration firms, some a lot more than others. The good news is if you know the changes are coming, you should be able to avoid significant insurance availability issues and/or premium increases in the coming years. In this article, I will detail the changes underfoot in the insurance market for restoration firms and lay out the options to get ahead of the impending insurance cost and availability problems many restoration firms will face over the next few years.

Here is what the future holds in 2019:

  1. Material insurance rate increases for General Liability and Environmental Insurance.
  2. Tighter insurance requirements and verification of compliance.
  3. Customer requests for higher limits of liability.

All of this will happen in the face of decreasing availability of business insurance options as history repeats itself. Insurance companies that sold policies for too little premium over the past few years are running from the restoration class of business the same way they did in 2002 when the “toxic” mold insurance crisis made finding liability insurance difficult.

A lot of the change in the insurance marketplace for restoration contractors is due to poor loss ratios. A loss ratio is calculated by taking the total money paid out for claims divided by the total dollars contractors paid for their insurance. When it comes to restoration contractors, insurance companies have paid out much more for losses than anticipated; in fact, some paid more in claims expenses than they actually brought in in premium dollars.

Read More HERE


Brownfields by their very definition involve properties with environmental liability risk:
A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. USEPA
The definition is broad and includes properties that may have contamination. It is a generally accepted principle that reusing a brownfield is preferable to developing greenspace for a host of reasons, but the top four include:

“We understand that these are economic development ventures and that risk costs must be managed and defined to effectuate a financially successful project.”



As a carpet cleaner, you would think your commercial insurance policy would cover damage to the work you do and mistakes that might happen. Think again.


by: Kari Dybdahl

Attention all carpet cleaners!

The carpet, rugs, and upholstery you work on may not be covered by your general liability policy in the way that you may think…

Most of you, I’m sure, are familiar with general liability (GL) insurance coverage as you carry it to protect your business in the event of some kind of claim for damages resulting from your operations. GL policies are designed to respond to claims for bodily injury or property damage in a general sense; essentially, someone getting hurt or something being damaged resulting form your operations.

However, exclusions in GL policies limit or restrict coverage. The exclusion of interest in this post is the Damage to Your Work exclusion. I won’t bore you with the full policy legalese (although if you’re interested, I’d be happy to). The gist is, due to that exclusion, your GL insurance would not apply to property damage to “your work” arising out of your operations. Read the Full Article.

4 Cs of Insurance Purchasing

Use these tips to ensure your company is safeguarded against the risks of your work.

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4 Cs of Insurance Purchasing

When I speak with cleaning and restoration professionals one of the first questions I ask is, “What do you dislike most about insurance?” It’s a loaded question, but it really does help me figure out what you value about insurance and what I can do to fulfill that.

Most people respond that their insurance agents don’t know what they do for a living. Restoration contractors especially say they must explain to their insurance agents — every renewal — that they are neither janitors nor carpet cleaners in order to have that taken off their liability policies. Does this sound familiar to you?

The next question I ask is, “What do you like the most about insurance?” The response I generally receive is that they like how it is an extra level of protection for their businesses. This is certainly accurate. The overall function of insurance is to provide the insured with financial assurance for the liabilities they take on and to be there when something catastrophic happens to help avoid bankruptcy or closing your business.

In my day-to-day work, I often hear that insurance costs too much. This could be true as well. Insurance is transferring the risks you take on to someone else in exchange for a premium. The premium charged should be minimal to the overall risk you take on.

Let’s say you are doing a Category 3 water job at a large commercial building valued at $15 million. If the job were to go wrong, what is the worst that could happen? Say you burn the building down, causing $15 million in damages; meanwhile, your annual liability premiums are $20,000. In this case, $20,000 is relatively minimal to the $15million dollars of risk you took on.

In this article, I will help solve the challenge of saving premium dollars while maintaining adequate insurance for your business. The simple way to do this is to follow the “four Cs of insurance purchasing,” which you should follow when looking over your insurance program. Three of the Cs affect you 365 days out of the year. One C will affect you only one day out of the year. Can you guess which C that is?

Kari Dybdahl :

“Insurance purchasing should not be stressful for you as the insurance buyer. If you feel like something is off with your insurance, it probably is. Ignoring the problem won’t fix it.”


What ‘Your Work’ Means for a Restoration Contractor

As a restoration professional, you would think your commercial insurance policy would cover damage to the work you do and mistakes that might happen. That might not be the case.


By Kari Dybdahl

In the last “Kari’s Korner,” I wrote about what “your work” means for a carpet cleaner regarding insurance.

This month I am going to carry that same topic on to a restoration contractor. Many may be thinking “your work” would be the same for all trade contractors. However, when operations involve regulating the relative humidity within a structure, we in the insurance industry look at “your work” on a more macro scale than the one thing you were called to a job to work on.

Although the way we look at “your work” as a restoration contractor is a bit different from how we look at a carpet cleaner, the core concept remains the same. In general, “your work” is the thing you were called to work on. As a carpet cleaner “your work” is the carpet you were called to clean.

What would “your work” as a water extraction or restoration contractor dispatched to a flooded home be in the eyes of an insurance company? Well, “your work” is the thing you were called in to work on, which is bringing down the relative humidity in that entire home. One would say the whole home is “your work”!

The “your work” exclusions on your General Liability policy and Contractors Environmental Liability policy exclude coverage for property damage to “your work” arising out of your operations. In the case of a restoration contractor at a water-damaged home, “your work” applies to the entire home; in theory, you have no coverage for any damage to that home caused by your operations.

Imagine one of your dehumidifiers short-circuits and starts a fire, burning down the entire home. We would expect the “your work” exclusion to trigger, because the property damage to the home from the fire resulted from your operations. It would exclude coverage for the whole loss because “your work” was the entire home. Therefore, “your work” exclusions are especially deadly for restoration contractors.

The good news is solutions exist to fix this immense gap in coverage. There are wholesale insurance brokers specializing in your industry that can help.


Claim Frequency Kills | Part 2

How a few insurance claims can make your restoration company uninsurable.

Claim Frequency Kills | Part 2

How a few insurance claims can make your restoration company uninsurable.

Last month, we talked about the issue with claims frequency. However, I don’t want any of this information to scare you away from making a claim when you need to. In this article, you’ll find a list of situations that should always be reported as a claim. This is by no means an exhaustive list or a rulebook on what to report and what not to report. You should always reference your specific policy documents for conditions, duties, and requirements imposed on you as a policyholder and it’s a good idea to chat with your insurance agent on what to do. If you selected your insurance agent solely based on the cheapest coverage available in the marketplace, I would get an opinion from someone else on when to submit a claim under your insurance policies.

Read The Full Article HERE

By: David Dybdahl


Navigating the Complex World of Insurance

With custom-designed insurance policies, many of the cleaning and restoration industry’s insurance woes can be resolved.




Let’s transport together back to 2003 when a court ordered Farmers Insurance to pay Melinda Ballard $32 million for a small water damage claim gone bad that resulted in toxic mold growth in her home.

Although the payout was eventually reduced to just over $4 million, the point still got across to insurance companies throughout the industry. Ballard is the number one person insurance companies love to hate. A 2003 article by The Austin Chronicle stated insurance companies use the Ballard case as ammunition against the fight of frivolous lawsuits.

What is particularly interesting about the Ballard case from the viewpoint of an insurance professional is that the claim originated from a small water damage loss. Due to the lack of urgency from the claims department, the small water leak turned into extensive mold growth. Instead of getting the water out as soon as possible, the claims adjuster wanted to investigate the loss, which took two months. Within those two months, the loss worsened and resulted in detrimental bodily injury to family members as well as an uninhabitable home.

A claim similar to the Ballard case could happen to any restoration contractor no matter the size of the firm or the job.


Have you ever wondered why you are rated as a carpet cleaner on the declarations page of your commercial general liability policy even after you have told your insurance agent most your revenue is from water damage restoration?

By: Kari Dybdahl


Claim: Frequency Kills: Part 1

How a few insurance claims can make your firm uninsurable

By: David Dybdahl | July 2018

When should you report a claim?

Here are little known facts in insurance:

What does this boil down to? Insurance Is Important! You need it to run your business as well as protect it!  With out it, you will be unable to get a majority of jobs and leave yourcompany open to loss that could bankrupt it! 

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Insurance Is Important! You need it to run your business as well as protect it!

The Sudden and Accidental pollution coverage myth

Sudden and accidental pollution coverage and Greek gods are both myths. People gave up on believing the Greek gods would do them any good more than a thousand years ago. However, due to the crafty work of insurance marketing spin doctors, the sudden and accidental coverage myth in general liability insurance policies persists in the US insurance business.


By: David Dybdahl

Pollution exclusions have been the cause of more litigated insurance coverage disputes than any set of words in the history of insurance. The words “sudden” and “accidental” are at the root of many of these coverage disputes.

Looking at the insurance marketing slang used to describe pollution exclusions, it is not surprising that there is so much insurance coverage litigation over denied pollution-related claims. Insurance coverage litigation is created when insurance buyers think they are covered for a loss that the insurance company thinks is excluded. It turns out that insurance sellers and buyers and their lawyers often have some very different ideas about what sudden and accidental pollution might mean.

Sudden and Accidental Pollution Coverage

Representing a “pollution exclusion” as “pollution coverage” is a great way to create coverage litigation. It is still common to hear in the insurance brokerage community that “this policy has sudden and accidental pollution coverage.”

Much of the new insurance coverage litigation over pollution exclusions in property and liability insurance policies could be avoided if the insurance marketing spin doctors could be reined in from developing feel-good words to disguise the effects of pollution exclusions. Sudden and accidental pollution “coverage” has as its foundation an exclusion in the comprehensive general liability insurance policy that has not been used for over 30 years. In my opinion, the use of the words “sudden and accidental pollution coverage” on new insurance policies should go the way of Greek myths; both make interesting reads, but neither is based on facts.



Private Risk Financing for Environmental


Expert Insight Panel:
April 19, 2018 1:30 pm

Bloomberg Environment


Brad Maurer
J.D., CPCU, American Risk Management Resources Network,
Philadelphia, PA

Brownfield Initiative Programs have three common elements:

  • Statutory liability relief for successfulremediation,
  • Use of voluntary cleanup programs and expedited governmental approvals for
    remedial actions to shorten remediation periods, and
  • Funding to identify brownfield sites and bridge the financing gap between cleanup costs and property market value.


Superfund Site Redevelopment: A Brownfield Approach to Financing Environmental Remediation Costs for Site Reuse

The Environmental Protection Agency, through its Superfund Task Force, has indicated that the agency will be focusing on streamlining and expediting cleanup and reuse of contaminated sites, with a major emphasis on involving private parties and encouraging private investment.
This session will explore the costs and benefits of several private risk funding approaches for site cleanups, such as: litigating old general liability insurance policies, purchasing pollution legal liability and cost cap insurance, and
incorporating environmental liability transfer and guaranteed fixed priced remediation strategies at sites. The session will provide an overview of common terms and conditions associated with the various options, the market
and providers for each of these options, and their potential role in transactions through real-life case studies.

Download The Article HERE