Hello and welcome to today's webinar titled, Installation Floaters 101. Please be aware of the IMUA statement. We are fortunate to have Lauren Harrison as our presenter today. Lauren is an Inland Marine Underwriting Specialist with International Marine Underwriters, One Beacon, in Inglewood, Colorado. Lauren earned a Bachelor's of Science degree in Economics from Bucknell University. Directly after graduation, she entered the Fast-Track Underwriting Trainee Program at Crumman Foster and worked as property and Inland Marine Underwriter. Subsequently, Lauren worked for several years as a Senior Inland Marine Underwriter at Ace Westchester in New York before joining IMU in 2010. She is also a member of IMUA's Generation Y Committee designed to attract young insurance professionals of IMUA member companies to IMUA. Last year, Lauren was a presenter at IMUA's annual meeting on the topic of Builder's Risk Lessons from Losses, and the session received excellent feedback. Lauren enjoys hiking in the Colorado mountains, cycling, and exploring the outdoors with her dogs, Frank and Charlie. Welcome Lauren. The floor is all yours. Thank you, Lillian. Well, welcome everybody. I'm very excited to be here, and we have some goals definitely that I'm hoping to have everybody meet by the end of this webinar, but more than anything else, I'm just hoping that everyone can walk away with a little more information than they came in with. Some of the key goals would be to understand the key similarities and differences of installation and builder's risk coverages, to understand the basic purpose of riggers liability, which we'll touch on briefly. And of course, to be a better trusted advisor to your agents who may need help navigating the coverage. What I find with my agents is often there's a lot of confusion between installation and builder's risk coverages because the forms and the coverages are quite similar in many ways. And hopefully by the end of this webinar, everyone can walk out, and if an agent calls you or submits a piece of business with installation coverage needed, you can take a look, figure out if that is in fact the correct coverage that they need. And if it's not, then you'll have the opportunity to educate them, and they can in turn go and go back to the insured and say, hey, we've got a great underwriter here who we definitely trust to make sure that you guys are covered the way that you need to be covered. So now we have a quick poll, and this poll is basically just kind of out of curiosity. What is your primary role? Are you an underwriter, claims, producer, legal, or other? And we'll just give it a few seconds here. It looks like for the most part, we've got mostly underwriters on the call, followed by claims, and then some other categories, and one person on the producer side. So very interesting. So this will hopefully help everybody in all those categories. And if anyone has any questions, of course, we'll have a question and answer session at the end of this webinar. But if there's anything that maybe we have additional questions on, feel free to contact me. Personally, I'll have my information at the very end of the slides. So here's the agenda real quick. I won't go through it. This is really more for your own reference after the fact. But we're going to touch on some key topics, including similarities, differences, the coverage forms, basic underwriting, and then, as mentioned before, the question and answer session at the very end. So first slide here is, what is installation coverage, and what is builder's risk coverage? Installation floaters are typically intended to cover a subcontractor's exposure for property that they may be installing at a construction site. Builder's risk, on the other hand, are intended to cover an owner or a general contractor and their exposure for a building while it's under construction. And we'll get into some more similarities and differences in the next following slides. So the similarities. Pretty obvious one here is that they're both dealing with construction projects. Another one is, overall, the forms are very similar in many ways, although there are a few key differences as well. And lastly, the objective is to cover property exposure during construction on both forms. So here are some key coverage items to understand. The who, what, when, where, and why. So who is covered under each of the forms? Is it the GC? Is it the subcontractor? Is it the owner? Is it the sub-subcontractors? Secondly, what is covered? What kind of property are we covering on each form? When does coverage end? When does it start? When does it continue? Where does coverage apply? And lastly, why do you need coverage? So let's start with the who. Under inflation coverage, the intent is to cover a subcontractor installing one component of a construction project. So that would be a person such as an electrician or a plumber or an HVAC installer. Builders risk, on the other hand, are intended to cover the GC, who, of course, might subcontract out to subs or the owner. Now one thing I want to spend a couple minutes on, which I know has been touched on in the past at several different various IMUA events, whether it's in person or a webinar, but often if anyone on the call is familiar with builders risk underwriting or installation underwriting, I'm sure that everyone at some point or another has been asked to extend coverage via extending the named insured to all subcontractors and even sub-subcontractors. It's kind of becoming the marketplace standard. But one thing I will urge you to do is just be careful when you do this. And the reason is because let's say that you're providing a builders risk for a general contractor. You know, if you're extending the coverage to all the subs that they hire and then pass that even to subs of those subs, what you're doing is you're essentially saying, okay, if this general contractor that we're insuring hires a subcontractor who maybe isn't the best and that subcontractor does something silly and causes a whole building to burn up, you are basically waiving the right of subrogation. So by having a subcontractor as a named insured, of course you can't subrogate against that subcontractor. So it's just something to be careful of. And you know, like I said, because it's the marketplace commonality these days, it's a difficult thing to really underwrite it. But you really should try to do as much due diligence as you can. And that would be asking questions such as, does the general contractor have experience working with the subs that they are hiring for this particular job? Questions of that nature, you know, it can go a long way. And then secondly, regarding the who is covered by builders risk, if you are writing it for the owner, just be aware that that is really the only time that time element coverage makes sense, such as loss of rents or something to that effect. Because if you're writing it for the GC, you know, they obviously have no loss of profits if the project doesn't end up opening on time. The next is the what. This would be what is covered under each coverage form. Under the installation coverage form, basically it covers equipment intended for permanent installation at a project site. It does not cover the building in which the property is being installed or any other pre-existing property. And it does not cover inventory or stock or property while being fabricated. And this is something I want to touch on for a few minutes right now. And I think I will also touch on it later in the slides as well. But I'm going to bring up a claim example that I personally had on an installation floater. What it was, was I was installing or sorry, I was insuring a solar panel installer. It was a floater basis, so it was just various project sites. They weren't actually scheduled. However, what they had done was they had an office building, which unfortunately was in a flood zone. And they had a lot of their inventory in stock, so just all the solar panels that they would just keep on hand for various jobs. A flood came through and they tried to get coverage under our installation coverage form for the flooding at that location. And they said, well, hey, this is a temporary location, so we need you to cover it. And we came back and we said, well, wait a minute, installation temporary location coverage isn't really intended to cover just any and all inventory or stock at your location. It's only intended to cover items that are specifically slated for one of the jobs that would be covered otherwise on our policy. So that's just definitely a lesson I learned, and it's something to keep in mind. And then for builder's risk, what is covered is basically the entire building under construction if it's new at a project site. And then if you're working on a renovation, you may have the option at your company to also provide existing building or pre-existing property coverage. So that would be some differences. Under installation, you don't have that option, and builder's risk, you do. So next is the when. You guys will have to excuse me. I'm finding a bit of a cold, so my voice sounds funny. I'm sorry about that. But anyway, so the when. And this is pretty similar on both of the forms, so I don't really have it separated out on this slide. Coverage begins, and of course, it varies by form, and let me back up a minute because when I'm talking specifically about forms, I'm speaking about the ISO forms. Of course, each company is going to have their own specific forms that are going to vary a little bit from the ISO forms, but when I refer to a form, it is the ISO. So on the ISO form, coverage begins basically when your property is, quote unquote, at your risk. So what does that mean? Basically, it means once you are responsible per the contract. And one common theme that you'll find a lot in this presentation is contract. A lot of times, things just go back to the contract when you're trying to figure out if something is covered, when it's covered, who's covered, et cetera. So just keep that in mind as I'm speaking. Coverage continues then while it's awaiting installation, so perhaps, let's go back to that solar panel example and say if they brought in some solar panels to a specific job site, they might have a conic container or something like that on site, which is basically what you see here in this picture. It's a secured area to store installation property before it's actually being installed. So it's covered while it's awaiting installation, during the installation or construction, and potentially during testing. That's why I have a question mark there. It varies by form, but from my experience, most forms automatically exclude testing of most kinds, or it might exclude testing altogether. If it's a partial testing exclusion, what you'll probably see is something along the lines of, we will cover hydrostatic testing or pneumatic testing, aerostatic testing, basically testing that has to deal with filling up any sort of pipeline or anything to that extent with something that is not combustible. So if they're filling it up with gas, that's probably going to be excluded. However, as most of you know in Inland Marine, one of the great things about this class of business is that we have the ability to kind of tailor the coverage to what our insured needs. So most, if not all, the companies that everyone on this call works for will have some sort of endorsement that you can issue to add that testing coverage back on. And then coverage ends. When does that happen? This can get a little tricky, and I'll kind of delve into it a little bit further in the next few slides. So both forms say, basically, coverage ends at the earliest of when the owner accepts the property. Basically, that would mean like when the certificate of occupancy is issued, et cetera. Or the earlier of covered property being put to use. Or X number of days after installation is complete. And that X, in my experience, varies anywhere from like 30 to 45 days, typically. But some companies also can extend that to 60 days, 90 days, or just whatever the underwriter thinks is reasonable. And then the last part of that is or when the project is abandoned, when their interest ceases, or when the policy expires or cancels. So as I said, we're going to get into this when coverage ends a little bit deeper. And the best way to do that is to use an example. So let's say a subcontractor, an electrical subcontractor, is hired to install electric at a five-building apartment complex that's being built somewhere in the US. What constitutes the project? And I believe we have a poll. There it is. So how would you guys think the best way to define the project would be? Would it be A, when each building's electric is complete, when the work at all buildings is complete, C, when each electric component's installation is complete, or D, none of the above? We'll give it a second here. But it looks like it's changing rapidly. So we will give it a few more seconds. OK. It looks like the majority of folks on the call are answering their opinion being B, which is when work at all buildings is complete. And then the next largest amount of folks are saying that C, when each electric component's installation is complete. Some are saying none of the above. And then there's a few that are saying when each building's electric is complete. So actually, there's really no specific answer. So maybe it was kind of a trick question. But I wanted to bring this poll up to make a point. And basically, when you read the coverage forms, whether it's installation or builder's risk, I think you'll walk away saying, wow, that's really vague. That's really gray. It's not black and white at all. So when does the coverage end? When is the end of the project? And again, there's no clear answer. But it's very gray language on purpose. And the reason for this is that it always is going to go back to the contract. The contract is going to outline when the subcontractor's responsibility ceases. And that is why it's left to be gray, because every contract is going to be different. Furthermore, it's going to be up to the adjuster. And hopefully, this won't be the case. But if it does make it to court, it's going to be up to the judge. So again, it's gray, because it's sort of a subjective situation. And I will tell you that both the adjuster and or the judge are going to go right back to the contract language. Often the contract is going to stipulate that their responsibility is going to cease basically when they're paid for that work done. And again, that's going to vary by contract. And lastly, when will the general contractor's builder's risk come in? They will probably go back to the contract. So here's kind of an example of a situation where it can be kind of gray. Let's say an electrical contractor went in and did a job. And in the process of their installing the electric, they caused a fire. So how is that going to work in the case of a claim resolution? Hopefully, the general contractor is going to have a builder's risk policy. And hopefully, the installation contractor is going to have an installation con- sorry, the electrical contractor is going to have an installation policy. So now we have two policies that potentially could provide coverage. So which one would apply? You know, it really varies by company. But let's say, for example, the electric installer's installation coverage came in and said, you know, we'll go ahead and pay. Well, that's pretty easy. Let's say for some reason they said, no, no, we're going to go straight to the general contractor's policy. Well, this goes back to a few slides ago when I said, well, hey, if you're going to ensure a builder's risk for the general contractor, and then you name the subs of subs on that policy as an additionally insured, again, you have no ability to now go back against that electrical contractor's installation policy. So again, just something to always be aware of. So the next question is, where? Where does coverage apply for each coverage form? Installation, most commonly, what I personally see is installation floaters. And basically, this is there's no specific scheduled location on the policy. For someone like a plumber, you're basically saying, hey, over the next 12 months, I'm going to cover all of your jobs, no matter where they're located. And that would be in comparison to a specific location. I pretty rarely see installation scheduled locations. However, when this would come in a situation like that would be, let's use that same plumber, where maybe you give $100,000 limit for each of their jobs over the course of the year. But maybe they get this really awesome big contract that says that they need $1 million. Well, maybe the insurer on that floater policy isn't super comfortable with that limit. So they might have to go get a separate policy for that higher limit. And then it would become a scheduled policy for that specific job. For builder's risk, it's usually, I mean, it's really going to depend on the company that you work for and what your appetite is. But personally, I see more specific scheduled locations, what I call a single shot builder's risk, whereby a general contractor might be building a fancy home up in Aspen, Colorado. So they just need a policy for that project alone. Or what you might see is if any of you do home builders, that would be a reporting policy. And that is kind of a floater, kind of not a floater. You can kind of make it either way. It's really up to the underwriter. But let's say, for example, a home builder, and they're on monthly reporting. They're going to be reporting every month a list of every location that they're working on. And so it's sort of a floater in that you may not know up front the exact address of every location. But on a monthly basis, you're going to be updated. So a similarity between both coverages in terms of where coverage applies is that they both typically include covered property within x feet of the job site. What I see most often is about 1,000 feet. But again, Inland Marine is fun, because an underwriter can usually change that to whatever they want. And then, of course, the temporary storage locations and transit supplements are provided in both forms as well. So why do we need this coverage? Well, here's an example of one reason we might need the coverage. This looks like maybe a plumbing situation gone bad. Maybe this is an apartment building where a contractor hired a plumber to come in and maybe hook up some plumbing lines. Let's say they went home for the end of the day. They didn't realize that they did one of the connections incorrect. They come back the next morning. And then here, we have this kind of loss. So this would be a situation where the plumber would probably want an installation coverage. And then this lovely picture here looks like a big frame apartment building to me. I think we all know that it's definitely one of the tougher types of Inland Marine to write. But again, this is one of the reasons why we exist as underwriters and as insurance companies. We want to insure against this type of loss. And then this, does anybody know what this is? This is a giant hailstone. It is not an ostrich egg. In Colorado, I've been living here for about three years now. And it's been pretty crazy to see the amount of hail. Personally, I live down in Colorado Springs. And I can tell you that probably 90% of the last days over the past three weeks, I've gotten some form of hail in my house. Fortunately, it hasn't been anywhere as large as the one in this picture. It's more like pea-sized or smaller. But as we all know, the weather in this country is just getting more erratic, more extreme, and more unpredictable. And this would be something that, you know, who would be worried about hail? Well, I would say probably a roofing subcontractor. Or probably more likely, the general contractor. So I kind of touched on this a little bit before. But each different coverage form, both installation and builder's risk, can be floaters versus project-specific. As I said, installation coverage, it's more typical to see floaters, such as an HVAC subcontractor needing coverage at all their projects throughout the year. Or it can be location-specific, as mentioned before. Builder's risk is the same sort of deal. So I won't kind of labor the point here. So some common contractor types that are going to be covered by each different form. Again, installation, this is mostly for subcontractors. So it's going to be plumbers, electricians, HVAC specialists, and then builder's risk, the general contractor, and or the owner. So what are some typical exclusions on both types of the forms that you're going to see? Typically, you're going to see the flood exclusion, the earthquake and or earth movement exclusion, depending on how your form reads. There's always the lovely government action, riot, civil unrest, nuclear hazard, and war exclusions, hidden or latent defect exclusions. And then, as I mentioned before, there's probably going to be some sort of testing exclusion, whether it's a partial or whole. And then lastly, equipment breakdown. Some of these, probably at each of your companies, are going to be able to be added back on via endorsement. I'm not sure if all of them would be. I certainly wouldn't add all of them back. I don't think I've ever been asked to add back a government action or riot, civil unrest coverage back in the form. So let's talk about the form in a little more depth for installation, the ISO form, valuation, and coinsurance clauses. I'll run through this real quickly because, again, I don't want to focus too much on the forms because it's going to vary by each company. But basically, the value of property on an installation form is going to be the lesser of the cost of reasonably restoring that property to its condition right before the loss, or the cost of replacing that property with substantially identical property. And in the event of loss or damage, the value of the property will be determined as of the time of loss. So basically, what does this mean? Overall, it means replacement cost value. And I can say that with confidence because, hopefully, you're going to be insuring a subcontractor who is a good subcontractor. And they're probably not going to be installing old, used, depreciated components into a building. So if they're going to be installing new components, then the status of that component right before the loss is probably going to be the same cost to buy it new. So it's really not going to be much difference in terms of valuation. You can pretty much be assured that it's replacement cost value. Of course, there's exceptions to every situation. Maybe there's some kind of odd job that your subcontractor might be doing where they are installing old equipment that might be depreciated over time. But overall, again, it's RCB. So what are some of the typical sublimated or additional coverages? For installation, you're going to see things like debris removal, pollutant cleanup, temporary structures, and scaffolding, temporary locations and transit sublimits, like we talked about before. Escalation provision, basically saying if the cost to do this installation job in the market increases by x percent over the next year, it basically takes that into account. And then, of course, there's going to be sublimits for flood, earthquake, and earth movement. And I want to touch on this real quickly, because if you're doing a floater for a contractor that works all around the country, then you want to be aware of the potential for catastrophic type situations where maybe they're doing a job in a flood zone A. Or maybe they're doing a job in California where it's prone to earthquake. Or maybe they're doing it in Galveston, Texas, where it's going to be prone to a hurricane. So if your company has guidelines restricting the coverages that you can provide in those areas, you just might want to consider maybe putting on some exclusion such as we'll cover flood up to x limit, but we're not going to cover it in zone A. Or for hurricane, we're going to exclude tier 1 and tier 2 wind county, something to that effect, just to kind of protect yourself. That's just one of the extra exposures that you're going to be faced with when you're doing a floater. And then, of course, if it's a specific scheduled location, you should, of course, always do the underwriting on that and research that location, see what the exposures are, and try to control for it in your underwriting. So we talked about this a little bit before, so I won't get into it too much again, but real quick on temporary locations coverage. Again, this is that claim that I told you guys I had, where the intent for temporary locations coverage is really only to cover items that have been specifically slated for a location that's covered under your policy, and it is not intended to cover random stock and inventory. The reason for that is, I mean, you might be thinking, well, there should be a coverage gap then. Well, the answer is, there shouldn't be, because hopefully that contractor or subcontractor who's installing whatever they're installing is going to have a property policy that's going to include contents, personal property, stock, inventory, personal property of others, thanks to that effect. And that is really what the intent is for this not to be covered under the installation form, because it should be covered better elsewhere. So real quick, coinsurance on the ISO form is allowed. It's basically, if you want to put coinsurance on there, it just refers back to the declarations page. It's pretty standard, just saying we will not pay the full amount of any loss if the value of the covered property times that percentage doesn't equal at the end of the day. It's really more appropriate for single shot risks versus floaters, because for a floater, even though you might be providing $100,000 limit for any job someone might have over the course of a year, maybe one of those jobs is only worth $50,000. You just really don't know. But if it's a single shot, then you should be able to better assess the value of the equipment that's being installed. I rarely personally put this on the policy, but it is an option if you choose to do so. So what are the key perils that you need to be aware of under the installation form? Fire is the most obvious one. As an example, let's say an electrical subcontractor comes in and is installing electric, and they cause a fire and the building burns down. Well, hopefully they'll have installation coverage. But again, if not, the contractor is probably going to have that coverage. Wind hail, this is another exposure you might have kind of talked about it before when I was discussing about how you want to underwrite specific locations for a hurricane or a tornado or hail along the Front Range in Colorado, which I've been seeing, things like that. Of course, flood and or water damage, this is not only applicable at the job site, but you also need to be aware that it might be applicable at temporary storage. So let's say there's a plumbing contractor, and it's a specific job. So you have the ability to go in, of course, and research the flood exposure at that job. Let's say it looks good, so you say, OK, we're good to go. We're going to provide flood coverage for this policy. Well, you also end up, let's say, providing a temporary storage sublimit of $100,000. Well, the problem is that the temporary storage location sublimit isn't specific. You can certainly endorse it on if you know where that location is going to be. But really, it's intended to be wherever you guys temporary store this equipment, it's going to be covered. So the possibility remains that that temporary storage site may be located in a flood zone A. So again, you might want to consider putting some sort of exclusion for flood zone A, for example, even if it is a project-specific site where you want to provide flood coverage at the project site. Another pretty frequent peril that I see, and this is probably, in my experience, I would say most often, this is the one that I see on installation contractors, is theft, vandalism, and malicious mischief. And basically, what happens is there's a contractor maybe installing some pipe. And let's say that they have some copper piping. If they store it outside in the front yard of someone's home, everybody knows, hopefully, that copper piping is one of the highest theft risks in this class of business that there is. So this is just something you want to control for by asking, hey, what's the contractor's typical security at all the job sites he's going to do over the course of the year? You might see something like, oh, they have a Connex container at each one of the job sites. Or you might see something like, we always keep it inside the locked building. And that's kind of what you want to see. If they say, well, we don't really have anything that we use. We kind of take it case by case, or you just don't really get a good feeling that they're really controlling for this exposure, then that's just something you want to take into consideration and ask yourself, do you really want to insure them? And then, of course, there's always the possibility of damage during installation. This is something, let's say, during the installation, let's say somebody drops something from a height within a building and damages that equipment. This is kind of where riggers liability comes in a little bit. And I won't touch, I won't get too deep into riggers liability because there actually is a separate IMUA webinar available on the website for riggers. But let's say an HVAC contractor, we'll give two examples. Let's say an HVAC contractor comes into a job site. They have their own crane and their own crane operator. They put a air conditioning compressor on hook and are going to lift it up to the top of a roof of a building. In that case, let's say the crane drops that compressor in the course of lifting it to the top of the building. Because it's their own crane and because it's their own operator, this would actually be covered under their installation policy. Now, let's use a different example where this HVAC contractor does not have his own cranes and does not have his own crane operators. He might go to a crane rental company and say, hey, I need you guys to come on site and lift this compressor up with one of your cranes and one of your crane operators to the top of the roof. Hopefully, they will check and make sure that that crane rental company provides their own rigors liability. So there's ways to have it covered each way, but rigors liability is really intended to cover the liability for other people's goods on the hook of your crane or lifting device or whatever it is. I'll get into that a little bit deeper, but again, I won't spend too much time on it later on. So here's some basic underwriting that you might want to do. I'm just going to go quickly over the main kinds of questions you want to ask, a couple of different rating types that you might see. And hopefully, that will give you a good starting point. So here's some basic underwriting questions to ask. And I've kind of touched on a lot of these in the former slides, but I'll go through it again. So first thing you probably want to ask is, OK, what kind of contractor is this and what's their experience? Are they a startup? Let's say it's an electrical contractor that's been in business for 20 years, but all of a sudden, they want to start installing plumbing. Does that make you feel comfortable? Probably not, but that's just something that you want to ask. And of course, what is their loss history? They've been in business for 5, 10 years, whatever. Hopefully, they've had past insurance coverage, and you can look and see what kind of losses they've had. If they have some trends for theft, then you might want to dig in on that a little bit further and say, hey, I've seen that you guys have had five different theft losses over the last couple of years. What are you doing to address that? Hopefully, they're doing something. For rating purposes, you're going to want to ask, what are the annual number of jobs that you expect to do over the coming year? What's the average length of each job? And what would be the maximum number of jobs under construction at any one time? And then also, what's the average value and the maximum value of the jobs? Now, those four questions are all going to be used, in addition to annual revenues from installation, to figure out how much you want to charge for the exposure. And then again, what's the typical site security? Is there going to be a fence? are there going to be locking containers? Is it going to be kept in a locked building, et cetera? And lastly, the geographic area, because you want to be able to underwrite what the wind, flood, hail, earthquake, and other basic exposures would be in that area. So here are some common rating approaches. There's two main ones. And excuse me, let me get some water. I feel like I'm losing my voice a little bit. So as I was saying, there's two different rating approaches that underwriters can take. And I can pretty much guarantee that everyone on this call who's ever underwritten installation is going to have an opinion on which is right and which is wrong. And again, that's one of the great things about M1 Marine is that a lot of times, there's really not the right way to do things. It's kind of up to your own personal experience as to what you think makes more sense. But there are two basic rating approaches. And the first one is value-based. And basically, the idea is to find out what your exposure is at any one time. So you take the average job value times the number of jobs at any one time. And that will pretty much give you an idea of, at any given time, in any given area, I have, let's say, $2 million exposed at any one time. So then you take a rate and times it by that average exposure. And there's your premium. As far as rating goes, I'm not going to give out specific rates. That's just not something that we can do on the IMUA webinars. However, you can think of it similar to a builder's risk because it is just a direct damage coverage for construction projects. So you can think of it, if you wanted to charge x rate on a frame builder's risk, then you would charge similar rating for the installation of that similar exposure. The second rating approach would be based on gross receipts or the revenue. And this is the one that's a little controversial, I guess you could say. However, the idea behind it is that if you are using a rate against revenues or gross receipts, the reason for that is that the revenues are assumed to be reflective of both volume of jobs and the level of specialty. Or you can think of it in terms of the level of risk of jobs. So if they have a lot of revenues, that could mean either, it can mean one of many things. It could mean either they do a lot of really simple jobs, but they do a ton of them over the course of the year, so they're going to have a lot of receipts. Or maybe they do just a few really detailed, specific, and difficult jobs. But either way, the thought is that it's going to be reflective of what the true exposure is. And typically, you're going to use a lower rate than you would on the value-based approach. So we'll touch real briefly on riggers liability. Very basically, riggers specialize in lifting heavy objects that are a property of others during construction, installation, or moving operations. It is intended to cover the liability of a rigger during a lift for property of others in their care custody control. And that means it's liability only, so it's due to their negligence. It's not direct damage. It's intended to cover anything that's on hook, which basically means anything attached to a lifting device. And again, it's liability coverage, not direct damage. When coverage applies on a rigger's liability form is basically as soon as the straps, or belts, or whatever is being placed around the property that's going to be moved. Whenever that is attached, that's when coverage starts. And then it typically ends after those belts, pulleys, and straps are removed. So that means any time in between, during the moving, hoisting, raising, lowering, et cetera, during the loading and unloading, and during erecting and dismantling. Some common loss scenarios for riggers liability. We've got some pretty crazy pictures down here. The most common thing you're going to see is that riggers liability is going to be needed by crane operators. And the most common loss for crane operators would be a boom overload. That's basically, every crane has a specific maximum load capacity at any one time. And maybe they didn't weigh whatever is being lifted properly, or there was some sort of calculation error by the crane operator. Well, maybe they put more weight on there that the boom's supposed to handle, and then the boom collapses. The other common one is an object being moved that is then dropped, or maybe they collided with another object, and that whatever is on the hook is damaged. And then human error, of course. That's often the cause of a lot of losses, no matter what class of business it is. Down here, the crane on the left, that's a big boom damage. And that's actually from wind. That's something that is really more of a contractor's exposure error, but it just shows, even though these cranes are giant and they look pretty sturdy, in certain situations, they can actually be quite frail. And then this other one is actually a mobile crane that it looks like was overloaded, and the whole thing tipped over. So those are some common loss scenarios that you're going to see. And as we mentioned before, there is a Rigging 101 IMUA webinar available on the IMUA website. So we'll leave it right there for riggers. And that concludes the webinar. So now we have some time for questions, if anyone wants to ask anything. I'll be happy to answer. And as I mentioned, there's also my contact information at the end of this presentation, where you can contact me after if you have any questions. Thank you, Lauren, for an excellent presentation. And we actually moved your contact information to the beginning of the webinar. Oh, OK. If you have any questions, it's right there at the beginning. At this time, Lauren will take questions. To ask a question, if you're in full screen mode, please toggle out by hitting full screen icon. And then use the question pod to type your question in the bottom right-hand corner. And click the balloon icon next to it. We'll wait a few moments for questions to come in. OK, here's our first question. Are cat perils typically excluded? Well, the answer to that really goes back to your company form. But most likely, I would say your company form is going to exclude. For builders' risk, most often, flood and earthquake and or earth movement, however your form reads, they are going to be excluded. You can, most likely, however, add those back in via endorsement. Installation is a little bit different. It kind of varies. But really, whether it's builder's risk or installation, you as an underwriter should have an option via endorsement or even on the deck page to either cover or exclude the cat perils. To my knowledge, there aren't any forms out there that exclude wind or hail. But earthquake and flood typically are going to be excluded. Thank you. Which is primary, builder's risk or installation, if both apply? The contract is not clear on responsibility. And that is an excellent question. It's one of those gray areas. And it just sort of depends on the contract. And I'll also answer, well, kind of answer the other question that's being asked next, which is, do you request a copy of the contract as part of the submission? So typically, it's not commonplace to request a contract as part of the submission. If it's, let's say, an installation contractor installing electric, they may have a separate contract that may read differently with every one of the jobs that they do. So it's really not commonplace to request a contract. But what I will say is that if there's a claim, that hopefully is the first thing that your claims people are going to do is get a copy of that contract. So to go back to the original question of which would apply, was it the builder's risk or is it the installation, that may be answered in the contract. But hopefully, the way it would work is, let's say, both the builder's risk and the installation contractors have the appropriate coverages in place. The way it should work is that the installation contractor, if it's very clear that it was their fault, their coverage should apply first. If there's some sort of situation where maybe, I actually have a really good example. I had a situation where I was insuring a general contractor who was renovating a school. They hired a welding subcontractor to come in and do some work. Well, what happened was the welding subcontractor came in. They did their welding work. They left for the day. And they didn't wait to basically make sure that there were no embers left over. So after everyone went home for the day, the embers started smoldering. The smoldering turned into a fire. And there was massive smoke damage. So I get a call sometime the next week from claims saying, hey, your general contractor had a fire loss. Their welding subcontractor caused it. And so my first reaction was, OK, well, does that welding subcontractor have insulation? And they said, yes, however, there's an exclusion for work upon schools. So in that situation, I would have hoped that my general contractor would have required that all of their subcontractors provide a certificate and can prove that they have the appropriate insulation coverage. However, in this case, they did not. So we actually ended up having to pay. But that's kind of the line that it goes down. And here I am telling you guys, hey, make sure if you're going to add your subcontractors as named insureds that you underwrite them. Well, I didn't do it in that case. And that was definitely a lesson learned for me. And so hopefully, you guys can learn from my mistake and do a little extra underwriting if you decide to extend coverage to subcontractors. So I guess to really answer the question, it kind of depends on the situation. But wherever the loss stemmed from, that's hopefully where the insurance coverage would apply. But if for some reason there's a problem with that coverage, then it goes to the next line, which is generally the contractor or the owner. We see another question here. What makes a quality submission? I would say, basically, if you look at an Accord app, it's the same application form for both installation and builder's risk. Basically, there's just going to be an x marked next to either the installation or the builder's risk section. And an Accord app, in my opinion, is fine as long as it's filled out entirely. Often, as I mentioned at the beginning, I'll get a submission that is asking for installation coverage. But after I look at it, it's actually a general contractor. And I can look at it and say, well, wait a minute. They probably need builder's risk. So it's kind of an area. And I'm sure you guys have seen this, too, where you might have some agents that know Inland Marine coverage really, really well. But then you might have some other agents that dabble in it. That's the kind of thing that you might see from those agents that dabble in it, is they might mark the wrong one. So it is up to you to kind of determine what makes sense in this situation. Is it a general contractor or owner? Or is it a subcontractor? Then in addition to that, the Accord application typically asks things like the maximum value of jobs, the average number of jobs, and maximum number of jobs under construction at any one time. Pretty much asks a lot of those questions on my undergrading 101 slide. So in addition to the basic Accord app being filled out properly and completely, I would say loss runs. That's going to be probably your best starting point. And then, of course, if you get some answers back, there's always a situation that I hate running into where I ask my initial questions to my agent. And then I answer them. But the answers are either unclear or kind of show me that there is more to this insured than I originally was aware, based on what they sent the first time. And then you have to go back and ask more questions. So I will say, though, that on my underwriting 101 slide and the Accord app, that will probably give you the best starting point. Let me read some other questions here. Lauren, let us know if you need us to expand any of them for you. Yeah, yeah. How about the second to the bottom one? Do installation floaters provide coverage? So do installation floaters provide coverage for a sub of a subcontractor? For example, a television installation company has too many requests, so they subcontract out a few installations? And this is a very good question as well. This kind of goes back to how you are asked to insure the first named insured and who's going to be an additional named insured. If you just have your subcontractor as the named insured, then it would not expand to the subcontractor. However, if you're asked to add a sub subcontractor, or rather a subcontractor of that contractor, and you go ahead and do it, then it would apply. Because basically you're saying, OK, I'm going to insure you, and I'm going to insure all of your subcontractors that you hire. So then if that subcontractor that they hire messes up, you have no way to then go against them and subrogate against their insurance policy that they may or may not have. So the answer is really, it's underwriting discretion. It's up to you. You can certainly extend coverage if you want. But the way that it reads in the most simple form is that there's only one named insured. And it's up to you at that point if you want to extend it to sub and subcontractors. And then we got the same question again. Should you always ask for a copy of the installation contract from the client? And if not, under what scenario would you ask for one? Again, it's not commonplace to ask for a copy of the contract when you're doing an installation coverage. However, a situation where you might want to and you might be able to get a copy of it is if you are doing a project-specific single shot installation deal where maybe you're providing a really high limit. I would say you can certainly ask. But in my experience, it's very, very hard to get that out of agents. So you can always try. It's always worth the effort. But I will also say that in my experience, not all underwriters do. So you might run into the whole path of least resistance things that agents tend to do, whereby they have two underwriters. And they're going to take the one that's asking the least amount of questions or that's easier to work with in their eyes. So you just kind of want to be aware of that. You can always try to ask again. But most likely, you're not going to get a copy of it unless it's a very, very large project. So I think we've got maybe one more. How is the valuation determined on an installation floater? Well, this really goes back to your specific carrier coverage form. Let's say it's similar to the ISO form, which basically says we'll give you the value of the item, of the replacement of the item to the same status that it was at right before you got it. To the same status that it was at right before the loss. So at that point, it's up to the adjuster to go out there, take a look at the item, determine the value, and then determine how your coverage form valuation clause applies compared to that value. So it's really sort of a case-by-case basis. And it's up to your adjuster and your coverage form. And I think that's about it. Thank you very much. All attendees will receive an email with a link to an electronic survey. Please take a moment and provide feedback to IMUA. If there were several people at your location, please forward the link to them as well so they can provide feedback. On behalf of IMUA, I'd like to thank Lauren for a very comprehensive presentation. And thank you also to you, our attendees, for your participation and your interesting questions.

Installation Floaters 101

Lauren Harrison

Inland Marine Underwriting Specialist

installation floaters

builder's risk coverages

riggers liability

contracts

underwriters

risk assessment