Recommended Insurance For Restoration Contractors
Recommended Insurance for Restoration Contractors
Recommended Insurance For Restoration Contractors
Recommended Insurance for Restoration Contractors
By David Dybdahl
Mention environmental risks in healthcare, and just about everybody thinks of medical waste.
Medical waste is one of the environmental hazards in healthcare facilities.
The new HETI newsletter has some great advice on medical waste disposal choices.
Newsletter #1 HERE by HETI Medical Waste Treatment Technologies currently available technologies
Newsletter #2 HERE by HETI Evaluating & selecting Treatment Technologies
By far, the most significant risks in health care and virtually all commercial buildings are;
Losses from waste management practices come in as a distant 3rd for frequency and severity.
All Commercial buildings should have pre-placed emergency response plans with a qualified fire and water damage restoration contractor. A broken sewer pipe on a Sunday night is no time to figure out who to call to prevent further damage and remove the bio-hazards.
Some environmental risks can be financed essentially cost-free with a good set of insurance requirements for the vendors that provide services within the building. A functional set of insurance requirements for the vendors servicing the building should not ignore the existence of universal exclusions for pollution/fungus /mold/bacteria exclusions in both liability and property insurance policies. Most of the insurance requirements in contracts do. This IRMI article is a perfect example of what happens when the longest exclusions in General Liability insurance policies are ignored in the insurance specifications in contracts.
Indoor risks in commercial properties
Rational CPL Insurance Specifications
The illustrated claim in the article is for causing the death of invitees arising from bacteria in a hospital reception room. The cause of death was not medical malpractice. It was caused by poor facility housekeeping in a common area.
With a qualified preplaced emergency response plan, a facility can qualify for affordable environmental insurance designed for indoor environmental hazards. The ARMR HPR Environmental Insurance product has been specifically designed to integrate water intrusion Emergency Response Plans and customized environmental insurance coverage for commercial buildings.
ARMR HPR 3.0 The ONLY insurance solution for medical waste and facilities
Environmental Insurance Library. Over 30 years of articles on environmental insurance written by the industry’s leaders. From content focused on Fire and Water Restoration Contractors, Mergers and Acquisitions, Farms, Commerical Properties, Developers, Underground and Above ground Storage tanks, and Municipalities to Superfund sites, this is the industry’s most accredited library.
By: David Dybdahl October 2022
Every other market that went after restoration as a target class in the
past 10 years has abandoned the market. Forcing through nonrenewals
unavoidably creates potential coverage gaps on environmental losses establishing the exact date of a covered loss. and therefore which
policy should cover it, is impossible to do.
David J. Dybdahl, CPCU, ARM, MBA, is the president of ARMR. Network, LLC is a specialty insurance brokerage firm that works through independent insurance agents to provide business insurance packages to cleaning and restoration contractors coast to coast. He is a frequent contributor to R&R. He can be reached at 877 735 0800 or visit their website at
Environmental impairment loss exposures are inherent in the operation of a farm; these loss exposures cannot be avoided in the business of farming. The Farm package insurance programs commonly sold to farmers do NOT provide any effective coverage for claims arising from gradual contamination of soil and water or from odors.
Recent court rulings have shown that farmers face pollution-related loss exposures – most notably from drinking water supply contamination and odors. Across the country, lawsuits are increasing along with the increasing size of farming operations. The alleged damages being sought by the plaintiffs in some of these lawsuits are in amounts never seen in the agricultural economy.
The vast majority of farms have no insurance at all for the environmental damage claims that may be made against them. Specialized environmental impairment insurance for farms is available through thousands of insurance agents and brokers across the United States.
Every commercial insurance agency has an untapped organic growth opportunity with its current customers in a line of insurance where 95% of the accounts that need the coverage are needlessly uninsured today. Half of the placements have material coverage flaws in the policies being sold to them within the 5% of commercial insurance clients that have the needed coverage in place. Engaging in a proven sales strategy on prospects in this line of business can be expected to generate an 80% closing rate on first-time buyers of the coverage and 90% retention rates on renewals. Every agency has many potential buyers in-house and hundreds of prospects in their current marketing range. Sound good? It should be because numbers like that are only achieved in rare circumstances.
Just what is the mystery line of insurance that is capable of producing numbers like that? It is environmental insurance on selected classes of business.
And who is hitting closing ratios of 80% on new business first-time buyers? ARMR Network, LLC does when our retail insurance agents utilize our time-proven inverted new business sales strategy and the purpose-built best in class environmental insurance products available through Big “I” Markets.
As a benchmark, the environmental insurance potential in the current account base of an agency is 10% of the General Liability insurance book.
Read the Full Article in the BIG-I
“Every commercial insurance agency has an untapped organic growth opportunity with its current customers in a line of insurance where 95% of the accounts that need the coverage are needlessly uninsured today.”
By David Dybdahl
Restorers can learn a lot from the insurance company playbook on how to manage restoration risks.
The best way to pay for a lawsuit is to get somebody else to pay for it. That is how most insurance companies have things set up when you do work under a master restoration services agreement.
Say you mess up on a job so badly that not only you get sued for the recovery of the property owner’s damages, but the insurance company paying for your work, or the direct-repair network or franchisor that sent you to the job, gets sued as well. In that situation, your liability insurance is expected to pay to defend these other parties as well. In other words, the codefendants with you in the lawsuit do not pay; you do, or hopefully, if your insurance is designed properly to address this situation, your insurance company pays on your behalf. In risk management speak, the risk was transferred in a services procurement contract from the codefendant’s onto you and hopefully onto your liability insurance.
You can use that same risk transfer play with the subcontractors you hire. Subcontractors are the number-one source of liability claims in the fire and water restoration business. They are also the source of the very largest claims measured, in the millions of dollars. Basically, the source of these claims is the subcontractor messing up sufficiently bad on a job to trigger a lawsuit against the fire and water restoration firm that hired them, and sometimes the parties that sent the restorer to the job. Most lawsuits that involve the work of a subcontractor end up with the general contractor first. Below I will detail how to manage the subcontractor risk by stealing a play straight from the insurance company risk management playbook.
David J. Dybdahl, CPCU,ARM, MBA is the CEO of ARMR.Network, LLC a specialty insurance brokerage firm that works through independent insurance agents to provide business insurance packages to cleaning and restoration contractors coast to coast. He is a frequent contributor to R&R. He can be reached 877 735 0800 or visit their website restorationinsurance.com
By David Dybdahl August 2021
COVID-19, of course, was the big risk and insurance story of the last 15 months. Restorers had opportunities to perform cleaning and disinfecting services as soon as they became essential workers, which happened quickly in March of 2020. The firms that embraced that new market early and were incumbents on building cleaning services contracts did well through the pandemic. Other firms suffered steep declines in revenue as a result of the pandemic.
Due to COVID-19, I ended up working harder than I have for many years to develop risk management solutions for the new cause of loss in our customer base of restoration firms. New risk management tools had to be created to facilitate the cleaning and disinfecting work performed by our clients. On March 10, 2020, there was no easily understood, legally defensible, cleaning and disinfecting protocol for any virus, let alone a new virus that was causing thousands of deaths and the travel ban. There was also no purpose-designed liability insurance available for the firms performing virus disinfecting work. For over 100 years there had been no need for such an insurance product.
David J. Dybdahl, CPCU,ARM, MBA is the president of ARMR.Network, LLC a specialty insurance brokerage firm that works through independent insurance agents to provide business insurance packages to cleaning and restoration contractors coast to coast. He is a frequent contributor to R&R. He can be reached 877 735 0800 or visit their website at
What is a liability money trap? For what I am addressing here, it is a set of facts and circumstances that can lead to potential liability issues for restoration firms. Facts and circumstances have already set the trap for the unaware; below is some advice on how to not into the traps.
Insurance brokers who specialize in insuring restoration firms are in a unique position to identify future industry trends. In the insurance application process, we get to see the business forecasts for the upcoming year for firms in the restoration business from across the country. We also see the insurance claims themselves, which allows us to see trends in liability arising from the work performed by restorers. Often, the work leading to the claims was completed many years prior.
April 29th, 2021
There are other money traps for restorers to step into, but they are not as widespread as these four. The money traps are easy to see and avoid if you are looking for them. The bogus insurance certificates and no liability insurance at job sites involving cleaning up a speck of mold or bacteria (including category 3 water) are traps your insurance agent will need to fix for you. The other two, not being licensed as a pesticide applicator where a license is needed and the application of antimicrobials that is “a violation of federal law” are directly within your control.
By David Dybdahl
Risk Management Considerations
Make sure that your insurance is fit for the purpose for which it is intended, many of the liability insurance policies sold to restoration contractors are not adequate to address the loss exposures commonly associated with restoration contracting.
Inform your insurance providers that you are performing CAT response work, especially if that work is outside of your normal operating territory. Adjustments to your insurance coverage are likely necessary.
Professional Liability Insurance
General Liability and Contractors’ Pollution Liability insurance policies routinely exclude losses from “Professional Services”. The IICRC Standards are “Professional” standards. Professional Liability insurance is available for no additional premium on the higher quality CPL+Professional liability and combined GL+CPL+Professional Liability policies designed specifically for restorers.
High-quality insurance with specialized coverage for biohazards is needed and readily available for firms working to restore properties from the damages caused by the 2021 winter storms. It is especially important to address the biohazards on all losses involving water intrusion in the built environment.
By: David Dybdahl
Naive efforts to control the risks associated with a biohazard contamination in buildings can actually increase the risk of loss to the stakeholders in that building. A simple process of (1) do no harm, (2) utilize building cleaning and disinfecting sanitation procedures that are legally defensible in court, and (3) make sure the stakeholders are insurable and insured is an effective way to manage the coronavirus and other biohazards in buildings.
Through marketing hype and hoopla promoting a virus-free building, well-intentioned biohazard decontamination services providers can actually increase the hazards of virus contamination and, in doing so, significantly increase the risk of building owners and property managers. At a time when the owners and managers of buildings are uninsured for virus and other biohazard-related claims, finding cleaning and disinfecting services providers that are insured under specially modified CPL insurance is an essential and easy to implement risk management play. Hiring uninsurable contractors for biohazard decontamination work is a good way to make individual buildings and the services provided by property management companies uninsurable for biohazard risks as well.
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