Artisian Contractors
Artisian contractors represent a vital part of the construction industry's growth. However, due to the fact that most artisans are self-employed finding adequate insurance at an affordable price can be difficult. Whether insurance is purchased by the building owner, general contractor, or directly by the artisan, understanding the exposures is essential in determining what lines need to be purchased.
When considering what risks need to be covered and who is responsible for covering those risks, artisans must consider several issues that are generally contractually. Insurance coverage is one of the most common ways to transfer risk, and the artisan must establish who is contractually obligated to covering what exposures. In some cases the building owner may agree to cover certain risks, in other cases, the general contractor may provide coverage. Regardless, the artisan must understand what is an insurable versus an "un" insurable exposure.
An area that all subcontractors, such as artisans should seriously consider is obtaining an installation floater or builders risk policy. That type of coverage is generally written on a "blanket" basis to protect the named insured for the cost to replace materials damaged or stolen from job sites and temporary storage locations.
The coverage acts as a "back-stop" for use when there is no master builders risk coverage in force on a project and coverage is normally written either on a flat charge basis or a reporting form, subject to a rate per $100 of gross receipts.
The most tangible risk involved in artisan construction is materials used to complete a project. Often times, materials used in the course of building and installation need to be shipped to a construction site. If materials are shipped to a "Freight on Board" shipping point, they are covered by a builders risk policy from the time they are shipped until their installation work is accepted and paid by the owner or general contractor. However, some builders risk policies exclude materials on job sites unless they are installed, so it is important to make sure materials stored on site are covered.
With rapidly rising costs for building materials, new strategies have emerged to lock in material costs. Material such a copper wire are being purchased well in advance of the need at the job site, and stored on or away from the project site. This can create a significant exposure to loss that needs to be insured. Artisans need to work closely with their insurance agent if this an issue.