What Should You Do If Contractor’s Insurance Is Rejected?
Here in New York, it is not unusual for buildings or general contractors to reject your insurance.
There are lots of reasons coverage can be rejected. Don’t panic.
Today, I am going to walk you through how to resolve your rejected insurance coverage.
Without a detailed explanation and often times a conversation between the party rejecting your coverage and your insurance broker, the back and forth and delays can continue for a long time.
*Not going to name names, but we have gone back and forth with a particular company for months trying to resolve a coverage issue that truly didn’t exist.
Coverage checklists are great and very helpful for reviewing certificates, but if you only check boxes and don’t have an understanding you are doing a disservice. #VentOver*
The reason for most coverage issues in New York has to do with action over.
We won’t get involved in that topic here. But resolving issues often costs more money. This includes adding endorsements to meet the requirement or sometimes an entirely new general liability or umbrella policy.
Without further delay lets get into it. The first step to resolving a rejected certificate of insurance.
Get the specific reasons why.
This is often easiest to accomplish by requesting an insurance requirement sheet and or sample certificate.
Save both of those things, even though you probably want to delete the email and pretend none of this happened. That will not get you back on the job any faster.
Saving and sending both of those items to your current broker, or your potential new broker >>>Me<<<<, along with the certificate of insurance you already sent in, will greatly expedite the process.
Sometimes it’s a simple fix like checking a box here or there. It’s not always that easy though. Sometimes they might request an exact endorsement.
For example CG2010 1986 Edition *Not thinking of anyone at all in particular here… who wants the 1986 version of a form?*
But seriously sometimes it comes down to someone being very particular and wanting a certain form edition or form number.
Frankly, it’s usually easier to comply rather than fight an obnoxious request. If their risk manager likes the cert to have a semicolon instead of a comma between each additional insured, so be it.
If your coverage is being rejected for an injury to employee exclusion or action over exclusion, the fix is almost never an immediate or simple one.
It is 99.99% of the time going to require a rewrite of your liability policies including general liability and umbrella.
Prepare yourself for a rather significant premium increase as well.
The $5,000 policy you had is probably going to more than TRIPLE.
Now that your jaw is on the floor, I would encourage you to think about the job and decide right now is it worth the additional cost?
*No magic insurance policy exists that’s only going to be $500 more.*
Your friend’s cousin that sells insurance who says he can get it done for you for a few dollars more… can’t.
When it comes to this type of coverage in New York there are only a select few brokers that can really do a good job and get you what you need at a fair right price.
PS. If your friend’s cousin does try and get you a quote, it’s going to make things worse.
Specifically, in New York, the majority of construction liability insurance is placed in the non-admitted or excess and surplus lines world. The underwriters at these companies have tremendous power to decline or accept a risk based on many things.
A poorly submitted account will 99% of the time be rejected without hesitation.
IF the underwriter can find a quick reason to say no, they will.
I say that because we end up turning away clients that we should have been able to help. But due to junk prior submissions they end up stuck with whatever coverage they have.
It is a bit of an art form to sell the underwriter on giving you a policy.
CRAZY I know, you’d think for the ridiculous minimum premiums they are throwing out they would be eager to quote your business. But that is just not the case.
Having a broker that has built trust and works with the underwriter routinely makes a world of a difference and could decide whether or not your business even gets a proposal.
My apologies for all the doom and gloom, but it really is very important.
Resolving rejected insurance is a process. Especially when it requires a rewrite.
But patience and clear communication can ease the ugliness.
If your insurance has been rejected and you need help please hit the contact us button below.