Kari’s Korner: When Insurance Coverage May Be Completely Worthless
by Kari Dybdahl
Attention all carpet cleaners!
The carpet, rugs, and upholstery you work on may not be covered by your general liability policy in the way that you may think…
Most of you, I’m sure, are familiar with general liability (GL) insurance coverage as you carry it to protect your business in the event of some kind of claim for damages resulting from your operations. GL policies are designed to respond to claims for bodily injury or property damage in a general sense; essentially, someone getting hurt or something being damaged resulting form your operations.
However, exclusions in GL policies limit or restrict coverage. The exclusion of interest in this post is the Damage to Your Workexclusion. I won’t bore you with the full policy legalese (although if you’re interested, I’d be happy to). The gist is, due to that exclusion, your GL insurance would not apply to property damage to “your work” arising out of your operations.
The quotations around your worksignify it is a definition within the policy. “Your work” basically means, the work or operations you perform or the thing you were called to work on. What might that look like for a carpet cleaner? Let’s look at an example.
Say you were called to a job to clean the carpet and the cleaning product you used damaged the carpet in some way. The only way to remedy the situation was to replace the carpet. After filing the claim with your GL insurance company to replace the carpet, we would expect the claims adjuster to trigger the Damage to Your Workexclusion and deny the replacement of the carpet claim. Why is this? The reason is the carpet is considered “your work,” because it is the thing you were called to work on.
Now, let’s say in addition to ruining the carpet, the walls were damaged as well because your sprayer went crazy. In that situation, the policy should trigger for repairing the wall because it is not considered “your work” as you were not called in to attend to the walls; however, in theory, insurance coverage still would not respond for the damaged carpet.
Keep in mind these are only claims examples. In real life, applying coverage is entirely up to the insurance company and the claims adjuster via their interpretation of the terms and conditions of the policy sold to you.
Unfortunately, I have not seen many fixes that fill the insurance coverage gap created by the Damage to Your Work exclusion. This does not mean they aren’t out there; specialty insurance markets do have givebacks with sub-limits. To access these options, feel free to reach out and I can send you in the right direction!
Kari Dybdahl has a decade of experience in the environmental insurance industry assisting clients from carpet cleaners to municipalities. She has received multiple awards and recognition for her work placing compliant insurance for Crawford Contractor Connection members, ICRA members, and many others. Dybdahl designs custom insurance programs alongside Dave Dybdahl. Please reach out to Kari A. Dybdahl with any questions at 608-824-3341 or [email protected].