If you're a roofer, it's vital to ensure that your contractor liability insurance provides you with completed operations coverage. This insurance applies when a client has problems with a roof after it has been installed, and this coverage lasts for the entire duration of your insurance policy period.
It's not uncommon for clients to sue roofers when they suffer water damage due to a roof leak, especially if they think the leak was caused by improper installation. Completed operations insurance helps protect you from this risk. To learn more about completed operations insurance and why it's important for roofing contractors, read on.
What Is Completed Operations Insurance?
Completed operations insurance is often included as a rider as part of an overall contractor liability insurance package. It covers personal injury and damage to client's home that occurred as a result of the roof that your company installed.
This type of insurance differs from general liability insurance in that its coverage begins as soon as your work is done. General liability insurance applies to damage or personal injury that occurs while you're installing the roof. For example, it would cover accidental damage to a client's roof decking caused by overdriven nails. Once the job is completed and you're no longer on the client's property, completed operations insurance coverage applies.
Like general liability insurance, completed operations insurance will also pay for the legal fees you incur when a client sues you. If they win the case or you agree to a settlement, your insurance company will cover the damages.
Why Is Completed Operations Insurance Important for Roofers?
The most common reason why clients sue roofers after the roof is installed is water damage. If a client doesn't notice a tiny water leak in the roof, it can cause an extensive mold infestation or attic damage. Unfortunately, both of these problems are often very expensive for homeowners to repair.
Due to the high cost of repairing these problems, clients (or their homeowners insurance carriers) are much more likely to sue roofers. If the water damage occurred as a result of improper installation, you may be found liable for it. Completed operations insurance will pay for both your legal fees and any settlement that arises from the case, so this type of coverage is important for roofers to have.
Completed operations insurance can also cover you when the damage was caused by a defect in manufacturing. For example, one of your clients may request impact-resistant shingles because they're worried about hail damage. If the manufacturer lied about the shingles' impact resistance and the client's home was damaged during a severe hailstorm, they'll likely file a lawsuit against both you and the manufacturer.
With multiple teams of attorneys involved, these cases often become very expensive to defend against — having completed operations insurance protects you against paying extremely high legal fees out of your own pocket.
As you can see, carrying completed operations insurance is important for any roofing contractor due to the high cost of repairing water damage. In addition, your coverage limit also needs to be high enough to support paying for legal fees and expensive repairs.
Make sure that your contractor liability insurance provides you with this type of important coverage. If it doesn't, it's a good idea to switch to another commercial insurance carrier that will cover you for problems that arise after a roof is installed.