Part One: Fixing Gaps in Your Liability Insurance Policies

9 out of 10 restoration companies have policies with a fatal flaw

The Problem

Your insurance agent has very likely set you up to be in breach of contract and to be the insurance company for a really big insurance company on the work you do under master services agreements.

This two-part series will outline first what the problem is and how it happens, then how to easily fix the problem.

The Solution

Purchase business liability insurance policies that do not set you up for failure. The good news is, by following the advice provided below, it is a pretty simple problem to fix and it usually costs nothing for a restoration firm to implement the solution to the problem. 

We review over a thousand insurance certificates that fire and water restoration firms provide to our insurance consulting services clients every year. It is amazing to see how many mistakes insurance agents make in serving the insurance needs of restoration contractors. The mistakes really show up on the certificates of insurance provided in order for a contractor to work under a master services agreement with an insurance company.

No insurance agent in the country would set you up to be an insurance company for an insurance company on purpose. Insurance agents do the best job they know how to do for their customers every day, but the truth is sometimes they simply don’t know how to do the right thing, especially on certificates when a contractor is performing services under a master services agreement.

In a recent compliance audit of more than 100 liability insurance policies, American Risk Management Resources Network, LLC., compared the coverage in actual insurance policies to coverages specified in a master services contract with a major provider of homeowners insurance to perform fire and water restoration services for the policy holders of the insurance company. We then compared the insurance coverage in the actual insurance policy to the insurance coverages as represented on the certificate of insurance. This particular master service agreement had a specific template for the certificate of insurance which had to be completed verbatim by the insurance agent in order for the contractor to be eligible to provide services to the customers of the insurance company.

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