Risk & Business Magazine Capri Insurance Fall 2015 | Page 26

Unique Responsibilties 3 Reasons the General Contractor Should Arrange Course of Construction BY: LANA HUNNIE, CAPRI INSURANCE G eneral contractors have a unique responsibility regarding the integrity of the home and supervision during the construction process. Contractor’s Commercial General Liability policy specifically excludes “property in the care, custody and control.” A separate Course of Construction (COC) policy is required to cover the labour and materials during the project. Here are the 3 basic reasons the General Contractor should arrange COC insurance: 1 The General Contractor must be a Named Insured on the COC policy to protect their interests. The policy can have multiple Named Insureds, however, the General Contractor must be included. Otherwise is subject to litigation or subrogation by the insurer for any insured losses that might occur. These losses will not be covered by the contractor’s General Liability policy as the building is in the Contractor’s “care, custody and control” during construction. 2 The General Contractor should maintain control of the insurance. The homeowner may wish to arrange the COC insurance but forget or lapse the coverage prior to completion. There are cases where General Contractors 26 RISK & BUSINESS MAGAZINETM FALL 2015 have been required to pay for losses due to the homeowners’ failure to purchase a COC policy. A General Contractor can be held responsible for all aspects of the construction project including arranging the insurance. A signed contract should specify the type of insurance coverage to be provided and the parties responsible. 3 General Contractor’s should arrange the insurance to ensure they are paid in the event of a claim. If the General Contractor is not named on the policy, they have no right to discuss the claim and the Adjuster could even assign a different contractor for the repairs. Furthermore, any payment from the insurer would be to the Named Insured on the policy. Specializing in commercial general insurance, Lana has over 25 years experience in the insurance industry. She joined the “Capri Family” in 1992. Lana received her Associateship with the Insurance Institute of Canada in 1995 and is a licensed broker in British Columbia, Alberta and the Yukon Territories.