The Endorsement All Contractors Need

Is there a chance your business can damage property owned by someone else?

Do you work at your customer’s location?

If you burned down a customer’s building, would you expect your insurance to pay for the damage?

If so, there is probably a hole in your insurance coverage.

Think about a painter. He sends his team into the customer’s office one night to repaint a conference room. A careless worker lights up a cigarette and inadvertently starts a fire. In addition to the damage to the building and the general contents, the fire destroys the office computer server.

Most general liability policies will pay for the damage to the building and to the contents. The computer system is also covered.

What is probably not covered by the contractor’s insurance is the data on the computer. Most general liability insurance policies specifically state that data is not “tangible property” and therefore not covered for “property damage” within the general liability insurance policy.

Surprise!

Fix the problem by having an endorsement added to your insurance policy that alters the definition of tangible property to include data (ISO form CG 04 37). You can also add coverage for “electronic data incidents” (ISO form CG 00 65).

If you don’t have these endorsements now, it might be time to consider the quality of your insurance advisor.