While HVAC contractors are the traditional contracting hazard, they have become the focus of increasing pollution-related claims over the past several years. HVAC system installation, maintenance, and repair can create polluting conditions such as poor indoor air quality and mold. Daily operations on the job site can disturb asbestos, lead, or other contaminants in the space. Materials and equipment brought to the job site may leak or leak during transportation or during contracting activities.
HVAC contractors are also exposed to professional liability risks that may not be apparent to the insured because contracting is the main focus. E&O claims can arise from: (i) worksite modifications where faults would create direct professional liability for the contractor, (ii) supervision of subcontractors, and (iii) actual design work performed, specifically where the contractor has a notable responsibility for commenting on aspects of the design that it knows to be poorly developed.
The exposures described above are usually excluded from general liability policies, so it is important for HVAC contractors to have comprehensive coverage that protects them from potential claims and thus helps secure the future of their business. Beacon Hill’s software division, PartnerOne Environmental, has a number of products that can effectively meet the coverage needs of this class of business:
Contractor pollution liability
Contractors Pollution Liability (CPL) insurance is coverage designed to protect against third party claims for damages caused by “pollution conditions” arising from the covered operations of the insured. This coverage applies to all types of tank contractors and is important because these pollution claims may not be covered by the general liability form.
How does contractors pollution liability coverage work?
Generally designed to address the coverage gap caused by the exclusion of contamination from CGL.
• Documents usually written to provide coverage for transactions that are carried out “by or on behalf of” the insured.
· Coverage is provided for the insured’s operations away from his places of work.
Basic policies can be written on the basis of claims made or on the basis of frequency.
Mold coverage is usually offered as an endorsement of a CPL or part coverage insurance policy.
Mold is usually in the claims form.
Mold coverage may have a sub-limit of liability, as well as its own deductible.
Contractors pollution liability / E&O
The Contractors Pollution Liability Policy/E&O provides coverage for general contractors, construction managers, and various trade contractors who may have pollution claims and occupational claims; Contractors’ Pollution Liability/E&O Provides coverage for contractors’ occupational exposures. This coverage is important because these occupational exposures are generally excluded from sole contractors’ general liability and pollution liability policies.
Work site modifications have been made
HVAC contractors are often presented with installations that don’t work quite as planned. In these cases, contractors often modify the plan on site to make the system work. The pollution conditions resulting from these changes create a direct professional responsibility for the contractor.
Actual design work has been carried out
Many companies offer real design services as part of their company profile. This can range from doing all the design work for a project, doing some design work related to an aspect of the HVAC system, or simply taking on a perceived responsibility to comment on aspects of the design that they know weren’t well thought out. The last component is the hardest to control and manage for HVAC companies.
Submarine supervision
Proper selection and supervision of subcontractors is an occupational exposure that most contractors share and that is generally excluded from basic CGL and CPL policies. Many HVAC contractors don’t use subs at all, so this won’t be a problem for them. For those who do, the exposure can be significant