How Contractors Can Avoid These 5 Construction Insurance Claim Mistakes
As a contractor, you carry insurance to protect yourself, your workers, and your clients. Sometimes accidents or losses due to crime or weather damage happen on construction projects that should be claimable. However, if your insurance carrier either rejects those claims or only partially pays them, it may be because of errors or omissions in the claim-filing process.
Below, our team at TCE Insurance, an independent agency providing general contractor insurance in New York, lists the top five construction insurance claim mistakes. We hope these will help you navigate the pitfalls of the profession!
Errors Contractors Make Regarding Insurance Claims
1. Not Analyzing Your Policies in Full To Understand Uninsurable Events
One of the top insurance claim mistakes includes not reading through a policy thoroughly. The policy you bought may not actually cover the types of incidents for which you’re filing a claim.
No policy covers everything, so make sure you understand the coverage limitations, exclusions, and endorsements before you’re stuck with a claim denial after an accident. Review your policy word for word with an agent.
You may have multiple policies in play. In addition to being sure the event is insurable, know which policy insures it, with which insurer, and what the terms are regarding deductibles or excess. You or your attorney should review your policy yearly to note any new filing requirements or deadline changes.
If you own a construction company, check that your employees have proper classification under your business insurance to prevent common mistakes like over- or underpaying for workers’ compensation.
2. Not Taking the Correct Steps Immediately After an Incident
When a loss occurs on your construction site, first, secure the area and focus on safety. (Keep a record of the costs of doing so.) Photograph the area and document what occurred.
As the construction contractor, you’ll need to notify several parties to advise them of the damages.
- Let the client know immediately if their property and work under construction have received damages
- Let the owners of any damaged equipment know about the incident
- If you need to notify the police (in case of a crime, a serious injury or death, etc.), obtain a case number.
- Contact your insurer, who will normally send an assessor to inspect the damage prior to arranging for any needed repairs.
3. Not Following the Correct Claims Process
Once you’ve determined exactly which insurance policy and insurer cover the loss, make sure to initiate the claims process properly. Prepare a report for the insurer, which should include:
- Your insurance policy number
- An explanation of the incident
- The location, date, and time of the incident
- Mitigating actions that you or someone else took (if applicable)
- The damage or losses that occurred
- Any injuries that occurred
- Actions taken to secure the site and make it safe
- Police case numbers (if applicable)
- Photographs of the damage
- An estimate of repair costs, which should include a detailed summary (see below)
- Any repairs implemented
- Names of witnesses (if applicable)
4. Not Fully Estimating Repair Costs
Many contractors fail to submit their full repair expenses in their claim, thereby losing money by receiving less compensation than they spent. Make sure your repair costs list considers:
- Labor
- Materials, as well as transport and handling
- Equipment
- Demolition of any irreparable structures
- Debris removal and cleaning, including water removal
- Damage to plant and equipment
- Protection of the undamaged construction work
- Supervision and overhead, including any subcontractors
- Temporary structures
5. Filing Late or Incorrectly
Most policies have a statute of limitations after which the insurer will not consider your case. To avoid this, be sure to file a claim immediately after an accident, even if you don’t have major injuries or material damages.
Once you understand your claim’s statute of limitations, fill your forms out accurately and thoroughly, providing all information your insurance company needs. Anything from accidentally using incorrect classification codes and provider information to leaving boxes blank may end with a claim denial. However, if you do receive a claim denial, correct and resubmit your form for reconsideration.
Our Industry-Specific Agency, Specializing in You!
Your construction company, team, and projects are unique, so you need an insurance provider and policy specifically tailored to your livelihood. At TCE Insurance in New York, our professional team will sit down with you to understand your business, daily construction requirements, and potential risks. We’ll then develop a coverage plan to suit your needs at an affordable rate.
Call us at 718-571-8385 in Staten Island or 631-894-9793 in Hauppauge to learn about more insurance claim mistakes, types of contractor insurance claims, or to request a quote form!