Roofing Contractor Insurance: What You Need To Know
By Charles Munyi—
Roofing operations are a high-hazard business and accidents are likely to occur. Third-party injuries, property damage, and claims for professional negligence are common. Also, fatal injuries occur frequently in the roofing trades.
According to the US Bureau of Labor Statistics, roofing was among the riskiest occupations from 2019 to 2020, with a fatal work injury rate of 47 per 100,000 full-time equivalent workers.
Roofing contractor insurance protects your roofing business from financial loss by covering property damage, third-party injury, and legal expenses.
What is Roofing Contractor Insurance?
Roofing contractor insurance is commercial liability coverage that protects your roofing business against claims related to third-party injury and property damage.
Despite the risks associated with roofing work, your clients demand quality work. Dealing with client demands and worrying about financial consequences from accidents can cause an enormous strain. Roofing contractor insurance can respond to potential claims and alleviate the financial burdens. Shifting these costs to the insurer reduces the chances of going out of business.
Why Do Roofing Contractors Need Insurance?
Claims of bodily injury, property damage, and negligence against a contractor can drain your business's capital. To prevent substantial financial losses, roofing professionals must embrace insurance. Also, some clients may require guarantees against financial loss, so having roofing contractor insurance may help you win more projects. Finally, workers' compensation insurance is also mandatory in most states.
Insurance can help roofing professionals with the following risks:
- Third-Party Injury: During operations, falling tools, debris, and business equipment might cause bodily harm to a third party. For instance, a roofing nail gun may hit a passerby. Roofing insurance may cover medical, rehabilitation, lost wages, and beneficiary compensation costs.
- Property Damage: Working on elevated surfaces can lead to falling objects like a loose roof tile causing damage to a parked car. A stumble or misstep by a worker might lead to the roofer falling through the attic. Insurance may cover such property damage.
- Legal costs: If you’re sued for property damage or bodily injury, your insurance may help cover the defense costs and legal expenses.
Roofing Insurance Coverage
Your roofing contracting business needs various forms of insurance to cover various operational risks. Here are some policies to consider for your business needs.
General Liability Insurance
Since roofing is a high-risk profession, general liability insurance can cover third-party injuries and property damage. A tool might injure a third party or a customer, and general liability insurance may pay for medical expenses and legal costs. This insurance policy also covers repairs and restorations needed to remedy damaged property.
Professional Liability Insurance
Professional negligence through misrepresentation, inaccurate advice, or failure to deliver a service may lead to financial losses for a client. Professional liability coverage may compensate for legal costs and settlement for claims of professional negligence.
Workers’ Compensation Insurance
Roofers may fall off roofs or ladders, injuring themselves. It would help if you had workers' compensation insurance to pay for treatment costs, injury lawsuits, missed wages, and compensation to dependents in case of injury or death caused by work accidents.
Cyber Liability Insurance
This coverage is essential for contractors that use computers to store customer information and process transactions, as it can pay for costs related to computer hacks and breaches. If the roofing contractor has a website and utilizes email, cyber liability coverage can prove to be very handy.
Occurrence vs. Claims-Based General Liability Insurance
Occurrence and claims-based are the two main types of general liability insurance.
An occurrence-based policy covers claims from events when the policy is active, regardless of the date of the claim filing. Thus, if you are sued for an incident in the past when the occurrence-based policy was in effect, you will be protected even if the policy lapsed or you switched insurance providers.
On the other hand, a claims-based policy only covers claims filed during the policy period. It would not provide coverage for a claim filed after the policy expires. Claims-based insurance focuses on when the claim application date and whether the policy was in effect.
When deciding which type of general liability insurance is right for you, it's important to consider the nature of your business and the potential for long-term liabilities. Occurrence-based policies are generally more expensive than claimed-based insurance since aggregate limits reset yearly, but they provide better long-term protection. They allow you to switch insurers or let your policy expire without worrying about losing protection.
Claims-based policies typically offer lower initial premiums but may provide less protection. You lose coverage if you exhaust your limit after several large claims or if a third party makes a claim after your policy expires.
Common Exclusions in Roofing Contractor Insurance
The following exclusions apply in most roofers insurance packages:
- Buildings over three floors: General liability insurance typically excludes coverage for buildings exceeding three floors. The insurer has to add special provisions for such cases.
- Subcontractors: Sub-contracted work needs to be rated separately from the work the insured or their employees perform directly.
- Drones: Damages caused by drones used in roof inspections may not be covered.
- Open roof exclusions: If an open roof causes damage to indoor elements, most insurance packages may not provide coverage.
How Much Does Roofing Insurance Cost?
Due to higher roofing contractor risks, insurance costs are generally higher than in other professions. Usually, as your business grows, so does the number of projects you undertake and the number of employees, hence higher insurance premiums. The following factors influence your premiums.
- Coverage Needs: The types of coverage you need impact cost. Premiums may increase as you add extra coverage in cyber, professional liability, and workers' compensation insurance.
- The number of employees: An individual contractor usually pays lower premiums than a roofing business with several roofing professionals.
- Limits: Higher policy limits attract higher premiums.
- Deductibles: The deductible is the amount you agree to pay out-of-pocket before your insurer takes over expenses. Increasing your deductible may lower your premium.
- Claim history: If you have a history of prior claims, your insurer may likely surcharge your premiums.
Typically, most roofing contractor insurance policies allow for a single third-party claim of up to $1M per one occurrence and a $2M limit for total (or Aggregate) claims in a year.
How Quickly Can I Get a Certificate of Insurance?
A certificate of insurance is a physical or electronic document that proves that your roofing insurance business has sufficient coverage for various business risks.
Your insurance agent issues the certificate of insurance after you’ve completed your insurance paperwork. To access your certificate, request it from your insurance agent.
Why Do Insurance Agents Use Pathpoint for Roofing Contractors
Insurance agents trust Pathpoint to find instant, bindable E&S quotes for their clients. Small commercial E&S is our specialty, and Pathpoint helps reduce quoting from days or weeks to just minutes.
You can jumpstart your submission with your ACORD forms. You’ll also receive a fully pre-filled supplemental application, so no additional questions after you get your quote. Plus, you can save time by e-signing binding paperwork within our platform
Get Roofing Contractor Insurance for Your Business
Roofing contractor insurance covers roofers against property damage, accidents, and third-party injuries. Contact your licensed insurance agent and ask them to get you a Pathpoint quote today.