Why Every Restoration Firm Needs Professional Liability Insurance

Most restoration contractors have glaring coverage gaps in their liability insurance resulting from professional exclusions.

Some misinformed insurance practitioners will say that restoration contractors are not providers of professional services and therefore do not need professional liability insurance. The smart ones will not put this in writing. Do not listen to this chatter. What those well-intentioned but naive commentators do not know is how exceptionally well what a restoration firm does for a living fits neatly into the professional exclusions commonly found in the liability insurance policies sold to virtually all types of contractors.

Restoration firms actually face a double whammy on their liability insurance policies when it comes to claims involving professional exclusions in their business liability insurance policies.

The first insurance coverage whammy is almost all General Liability (GL) policies sold to contractors of any type will have one or more professional exclusions laced into them. There are more than thirty variations of professional exclusions in common use today on the liability policies sold to contractors.

Professional exclusions in liability insurance policies commonly eliminate the insurance coverage for claims arising from:

  • The preparing or approving or failure to approve opinions, reports, work plans, surveys, change orders or specifications
  • Supervisory or inspection activities
  • The performance of any claim, investigation, adjustment, inspection, appraisal, survey or audit services
  • An error, omission, defect or deficiency in any test performed
  • Any evaluation, consultation or advice given
  • Any reliance upon such test evaluation, consultation or advice

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