Trade contractors have a lot of factors under their control, and many that aren’t as well. So, what happens when there is an issue with their work? Depending on the issue, Contractors Errors & Omissions (E&O) Insurance might come into play. This coverage is meant to protect them from damages that result from their work, and often covers:
Let’s drill down into each of these.
Faulty workmanship can happen, even to experienced contractors. These issues can cause delays in building, reinstallation/repair costs, and potentially loss of income. If your client were to take action against you for these losses, an E&O policy may help protect your financial interests.
Defective materials are usually going to be out of your control, but they can still cause problems directly for the contractor. If you install these materials and they’re found to be defective, there may still be liability for you. And again, an E&O policy may respond. The same could apply if items you worked on had recalls, and this is different from product recall policies in that damages may not be caused by bodily injury or property damage.
Design service issues could result from your decisions about a project. Perhaps you decided on the type of materials or size of certain materials. If those materials are determined to have caused an issue, you may be held as the responsible party. That could again result in a financial claim where an E&O policy would be involved.
So, what are your exposures as a trade contractor and how do/would your current policies address them? Reach out to our specialist Brandon Patterson at firstname.lastname@example.org or 865.453.1414 and he will walk through these coverages with you.