Cheap solar panel installer insurance quotes often contain dangerous exclusions in the CGL… Such exclusions may eliminate the protection your business needs for day to day operations.
The following describes 10 solar panel installer insurance exclusions you should avoid at all costs…
Solar Panel Installer Insurance Coverage
There are many different types of solar panel installer insurance.
The solar panel installer insurance you need may include, but isn’t necessarily limited to:
- Commercial General Liability (CGL)
- Excess or Umbrella Liability
- Workers’ Compensation
- Inland Marine Insurance
- Errors & Omissions (aka Professional Liability)
- Builder’s Risk Insurance
- Employment Practices Liability
- Other specialty coverages (such as offtaker insurance, production guaranty insurance, investment tax credit (ITC) insurance, etc.)
However, most businesses start with commercial general liability (CGL) insurance – and expand from there.
Your CGL policy is the cornerstone of your business insurance.
CGL coverage is important because as a solar panel installer, you’re exposed to real world risks:
- Doing construction
- Working at heights
- Using heavy equipment
- Working with electricity
- Lifting solar panels onto roofs
- Using a hold harmless
Your CGL provides you with protection from 3rd party bodily injury and/or property damage claims.
Your CGL should also allow you to assume liability for others in a contract (this is common when you provide indemnification in a hold harmless for your customers or partners with your insurance).
Unfortunately, solar panel installer insurance is not widely offered and the companies that do offer it often exclude most risks mentioned above.
Many of the exclusions described in this article are affected by the definition of an “insured contract” and the exception to the contractual liability exclusion in the standard ISO CG 00 01 04 13 commercial general liability insurance form.
Solar Panel Installer Insurance Exclusions FAQ
Exclusions are terms in your CGL policy that reduce or restrict your insurance coverage.
For solar panel installers looking for insurance, the following are exclusions that will severely limit your insurance coverage, or leaving you in the position of self-insuring your insurance obligations.
Having the following exclusions in your CGL is an unnecessary situation that potentially makes your commercial general liability insurance worthless…
A “roofing operations exclusion” excludes claims of bodily injury and/or property damage caused by, resulting from, or arising out of, in whole or in part, any roofing operations performed by you or on your behalf.
“Roofing operations” may include all work and services performed in connection with or on any roof or covering of any structure, or structures, and/or products provided in connection with any roof covering of any structure.
An “action over exclusion” excludes claims or suits involving bodily injury or property damage arising out of or related to your general contractors, sub-contractors, independent contractors, day laborers, temporary workers, leased workers, etc. who provide work for you or on your behalf.
An action over exclusion will provide no commercial general liability coverage in a situation where an individual is injured or property is damaged that results in a “claim” or “suit” that you are brought into either directly or indirectly.
This type of exclusion is very problematic in any construction or building project with a client where you are providing indemnification to another party, such as a general contractor, building owner or related party because they will tender any lawsuit or claim back to you – and you will have no coverage because of this exclusion.
Action over exclusions are especially problematic in New York City, or anywhere in the five boroughs.
A “fall from heights” exclusion excludes any claim for “bodily injury” or “property damage” arising out of, resulting from, caused by, contributed to by, alleged to be, or in any way related to – in whole or in part – a fall from heights.
The term “fall from heights” means any person or object falling from one surface or elevation to another where there is a height differential between surfaces, whether this “fall” involves a fall, trip, slip, jump, tilt, movement, etc.
An “independent contractor/sub-contractor sublimit” significantly reduces your CGL coverage.
This type of exclusion means that instead of the standard $1,000,000/$2,000,000 per occurrence/aggregate levels of commercial general liability insurance you thought you had, for any work where you hire an independent contractor or subcontractor – and a bodily injury or property damage claim occurs – your coverage will be limited to $50,000 or some other small amount.
This typically includes claim expenses, defense costs, judgments, etc. and applies to all insured parties collectively.
An insured contract exclusion, or a “contractual liability exclusion” eliminates – or reduces – contractual liability coverage from the CGL.
If you have this exclusion, it means the definition of an “insured contract” has been changed from the standard ISO definition to a more restrictive one.
The standard ISO CGL provides an exception to the “contractual liability” exclusion in commercial general liability coverage for certain types of contracts that are considered an “insured contract”.
Most service businesses, including solar panel installers, often sign contracts that include a “hold harmless” in them.
A hold harmless agreement states that one party agrees to assume liability for another party in a contract or agreement.
If you have an insured contract exclusion, it means that your insurance company’s assumption of liability for others has been reduced or eliminated altogether for certain types of risks. Examples of risks that may be excluded are assumption of liability of sub-contractors, independent contractors, or any other party who is not the named insured.
Prohibited work exclusions limit the type of work you can do.
This may include eliminating roofing work, as described above, or eliminating the types of buildings that are covered by your insurance. Some common prohibited work exclusions are:
Prohibits work on all of the following: Schools, recreational facilities, healthcare facilities, churches, airports, historic structures, museums, tract homes, condos, townhouses, coops, multi-family properties (except interior work)
- Recreational facilities
- Healthcare facilities
- Multi-family properties
- Residential work above 3 stories and/or properties >5,000 square feet excluded
- Commercial projects on buildings >20,000 square feet excluded
This type of exclusion reduces your ability to work on certain types of homes or buildings.
A common height limitation exclusion would be limiting any coverage to work on buildings that are three (3) stories or less.
Of course, with a “fall from heights” exclusion, or a roofing operations exclusion, any bodily injury or property damage claim that arises out of work at heights or on a roof could be excluded from your insurance coverage.
“Deleterious substances” is a broad term for a type of pollutant.
While pollution incidents are usually excluded from commercial general liability insurance policies, “deleterious substances” goes beyond standard pollution exclusion wording.
Deleterious substances may include, but not be limited to mold, lead, formaldehyde, chromatid copper arsenate, silica, asbestos, concrete dust, sulfates, electromagnetic radiation, Radon emissions from granite countertops, carbon monoxide, epoxy and glue, or other “toxic” or “poisonous” materials.
This type of exclusion may apply to “any” bodily injury or property damage claims arising out of exposure to any deleterious substance regardless of the name by which they are known.
For solar panel installers, if moisture or water damage results from roof work and/or building envelope penetrations it can lead to mold growth.
This type of exclusion leaves open to interpretation – and to exclude any claims – any claims of “bodily injury”, “property damage” or “personal and advertising injury” arising out of your work, or that work of any contractor or sub-contractor if the work does not meet federal, state, or local laws, rules, regulations or standards, such as – but not limited to – the Occupational Safety and Health Administration (OSHA) or any and all similar laws and standards.
An unlicensed contractors exclusion excludes any claims of “bodily injury” or “property damage” related to any acts of subcontractors or contractors working for you or on your behalf who is not in compliance with any local, state or federal licensing authority at the time of the “occurrence” that caused the claim.
Related to the problems with the “action over” exclusion and the “insured contract” exclusion, above, an employer’s liability exclusion closes the exception for employer’s liability coverage for an “insured contract”.
This may also be known as an absolute employer’s liability exclusion.
If you were sold an insurance policy with these exclusions, your business is at high risk for common solar panel installer claims.
By having such exclusions in your CGL, you are self-insuring your own indemnification obligations and assuming the financial responsibility that your insurance company should be taking.
Solar panel installer insurance should protect your business, not fleece you into paying for coverage that is potentially worthless for what you do.