Rhode Island Mechanical Contractors Insurance Policy Information
Rhode Island Mechanical Contractors Insurance. Mechanical contractors install, repair, and maintain pipe-based systems, including related ducts and vents. Some offer design services. While many are exclusively industrial, some are branching into residential applications in order to supply radiant/hydronic heat or installing residential fire protection systems.
While the installation of heating, refrigeration, plumbing, and fire protection systems are common, mechanical contractors may install the process piping used by manufacturers, health care facilities, and utilities. While ductwork may be fabricated on site, measurements are generally taken and the ductwork is fabricated at the shop or by a third party, then returned for installation.
As a RI mechanical contractor, you are in charge of some of the most crucial components of a property. Depending on your specific business, your line of work may include handling HVAC systems, plumbing, piping, and refrigeration, and more; the very foundations of convenience for any home or commercial property. However, while your job is extremely important, it certainly is not without risks.
In the event that something goes awry, it's important that you have the right type of Rhode Island mechanical contractors insurance protections in place to protect your business, your clients, your employees, and yourself.
Rhode Island mechanical contractors insurance protects your business from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Why Do Mechanical Contractors Need Insurance?
There are several inherent risks associated with owning an operating a mechanical contracting business. working with heavy machinery, electricity, plumbing, piping; climbing structures; tunneling underground; these are just some of the risks that you are exposed to. Add in the fact that you are working on someone else's property, and the fact that accidents can happen at any time, and it's easy to understand why commercial insurance is crucial for mechanical contractors in Rhode Island.
For instance, if a client claimed you failed to deliver a service that you stated you would provide and files a lawsuit against you or if an employee is injured on the job, you could be looking at hefty legal fees and medical expenses. Without insurance, you would be responsible for paying the costs of these expenses out of your own pocket, and those expenses can be financially crippling.
By carrying Rhode Island mechanical contractors insurance, instead of paying for the costs that are associated with any liabilities yourself, your insurance provider will help to cover the expense. In other words, commercial insurance can help to prevent you from going bankrupt; hence the reason why it is one of the most important investments you can make for your RI mechanical contracting business.
What Type Of Insurance Should Mechanical Contractors Have?
As with any business, the type of Rhode Island mechanical contractors insurance you for your should carry for your business depends on the specific needs of your business; but, the following policies are the most highly recommended:
- Commercial General Liability - Every business owner - including mechanical contractors - need to carry commercial general liability insurance. This type of coverage protects your business against third-party injuries and damages. It also covers third-party legal claims. For instance, if a vendor slips and falls while visiting your business, commercial general liability insurance will help to cover the cost of any related medical care; or, if you damage a client's property while installing an HVAC system and that client files a lawsuit, your policy will cover the cost of any damages and defense fees.
- Errors and Omissions - Also known as professional liability insurance, or simply E&O insurance, this coverage protects you against any errors or omissions that a client claims you made in the services you provided. For example, if you stated that you would provide a specific service but you failed to deliver that service and a client takes legal action, E&O insurance will help to cover legal defense fees, as well as any damages that may be awarded to the client. In other words, this type of policy protects you from financial losses that are associated with mistakes that you or your employees may have made.
- Business Auto - Your personal auto insurance policy probably won't cover any vehicles that are used for business; therefore, if you or your employees use vans, trucks, or any other vehicles to get to job sites, for example, you'll need to carry a commercial auto insurance policy. This type of policy provides insurance for any damaged vehicles or other property damages that are caused by your business vehicles; for instance, if you rear-end another driver in your work van, your commercial auto insurance policy will cover the cost of any damages to the other driver's vehicle.
These are just some of the Rhode Island mechanical contractors insurance policies that should be part of the commercial package. Other policies that are highly recommended include workers' compensation and completed operations; just to name a few.
RI Mechanical Contracting's Risks & Exposures
Premises liability exposures at the contractor's premises are usually limited due to lack of public access. At the job site, the electrical voltage must be turned off during installation in order to reduce the risk of electrical burns or electrocution to others entering the area and turned back on after work stops, all while minimizing any disruption of electrical service to other homes or businesses in the vicinity. Unprotected welding presents the potential for burns or setting the property of others on fire.
The contractor's employees can cause damage to the client's other property or bodily injury to members of the public, or employees of other contractors. Tools, power cords, and scrap all pose trip hazards even when not in use. If there is work at heights, falling tools, or supplies may cause damage and injury if dropped from ladders, scaffolding, cranes, or helicopters. Pressure-testing boilers, other pressure vessels, and piping can result in explosions or fire. The job site and the equipment (such as cranes) may create an attractive nuisance hazard to children who enjoy climbing.
Pedestrians and vehicles must be protected from falling objects through barricades and netting. Work with sterile environments will require an extra degree of care as the introduction of contaminants into the area may result in a severe loss. Mistakes made by employees engaged in service, repair and maintenance operations at a working utility or manufacturing operation could cause the facility to shut down.
Completed operations liability exposures can be severe due to improper wiring or grounding. System malfunctions may result in a wide range of damage, from a simple water leak to a major gas explosion, depending on the nature and extent of the work done by the mechanical contractor. If a system malfunctions, it may be difficult to quickly determine the cause. Specialists may be required to determine whether it arose from improper operation and maintenance, faulty system design, faulty manufacture, or faulty installation.
The absence of an aggressive quality control program that documents full compliance with all construction, material, and design specifications may indicate a morale hazard and make it impossible to defend against serious claims. Hazards may increase in the absence of proper record keeping of work orders and change orders, as well as inspection and signed approval of finished work by the customer.
Environmental impairment liability exposures may arise if the contractor is responsible for the disposal of replaced equipment and the use, transportation and disposal of fuels and related pollutants due to the potential for contaminating air, ground, or water. Old air conditioning equipment may contain PCBs. Proper written procedures and documentation of the transportation, disposal, and spill control processes are important.
Workers compensation exposures vary based on the size and nature of the job. Both residential and commercial work involves lifting, working with hand tools, wiring, and work with sheet metal and piping materials. Cuts and puncture wounds from the fabrication and installation of sheet metal for ducts and vents, back injuries from lifting, such as hernias, strains, and sprains, electrical burns, slips and falls, foreign objects in the eye, and inhalation of fumes are common.
Electrocution can occur from the use of high-voltage lines. Any work performed at heights may result in injury or death due to falls or being struck by falling objects.
Complications arising from the use, misuse, maintenance, or transportation of large, heavy machinery must be identified and evaluated. Welding can cause eye damage and burns. If welding must be done in confined spaces, proper ventilation and fire protection are essential to prevent or reduce injury to workers.
In repair and reinstallation operations, workers encounter lead dust or old insulation to be removed, some of which may include "friable" (easily crumbled) asbestos. Procedures must be in place to identify and handle this exposure safely. Work on pressurized vessels and process piping presents unique hazards with potentially severe consequences.
Property exposures at the contractor's own location usually consist of an office, a shop, and storage for materials, equipment, and vehicles. Ignition sources include electrical wiring, heating, and air conditioning systems. If repair operations involving welding or brazing take place on premises, the exposure increases. Welding involves the use of tanks or gases that must be stored and handled properly to avoid loss.
The absence of basic controls such as chained storage in a cool area and the separation of welding from other operations may indicate a morale problem. Air conditioning and heating systems and their components may be targets for theft. Appropriate security controls should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Crime exposure is from employee dishonesty. Background checks should be conducted prior to hiring any employee. All orders, billing, and disbursements must be handled as separate duties and annual external audits conducted. All items should be physically inventoried on a regular basis to prevent theft. Copper cable may be targeted by thieves.
Inland marine exposures include accounts receivable if the contractor bills customers for services, computers (which can include design and project management software), contractors' tools, and equipment, including hoists and scaffolds, goods in transit, installation floater, and valuable papers and records for clients' and suppliers' information. If large items are lifted by crane to rooftops for installation or retrofit, or dropped into place by helicopters, drops or falls from heights could damage the units.
Because an accident may trigger both equipment and installation coverages, many contractors prefer to hire cranes or helicopters with licensed operators. The mechanical contractor may rent, lease, or borrow equipment from others, or rent, lease or loan equipment to others, which presents additional risk as the operator may be unfamiliar with the operation of the leased or borrowed item. Goods in transit consist of tools and equipment as well as product required to complete the installation at the job site.
Heating and refrigeration units can be of high value and susceptible to damage in transit, frequently requiring expertise in loading and unloading to prevent shifting or overturn. If the units to be installed are delivered to the job site in advance, the contractor will need an installation floater. Machinery, tools, and building materials left at the installation site are exposed to loss by theft, vandalism, damage from wind and weather, and damage by employees of other contractors.
Commercial auto exposures are generally limited to transporting workers, equipment, and supplies to and from job sites. If vehicles are used to deliver heating, and air conditioning units or oversized piping, special modifications or built-in equipment such as lifts and hoists may be required. Large air conditioners may be awkward and require special handling and tie-down procedures.
Drivers should be properly trained to prevent overturn and to navigate through high traffic areas. Serious property damage or injury to employees of other contractors, passing pedestrians, or motorists can arise during loading and unloading equipment and materials. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and the records kept in a central location.
RI Mechanical Contractor Insurance
To find out exactly what type of Rhode Island mechanical contractors insurance coverage you need, and how much it costs, speak to an skilled insurance broker.
Rhode Island Economic Data, Regulations And Limits On Commercial Insurance
If you are considering starting a business, it's important that you choose the right location for your operation. Ensuring that the area offers the right market and demographics that will benefit from and be interest in the goods and/or products that your business intends on providing are vital for your success.
If you are thinking about starting a new company in Rhode Island or would like to expand the operations of an existing company into the state, it's crucial that you ensure the state offers a healthy climate that will allow your business to reap as much success as possible.
By assessing the employment rate of a state, as well as the key business sectors that are thriving there, you can determine if Rhode Island is a practical location for your company. Additionally, to ensure that you are in compliance with the law, it's imperative that you are aware of the commercial insurance coverage that business owners are required to carry in the state.
Below, we offer an overview of the economic trends and commercial insurance requirements in the Plantation State so you can determine if it will be a good location for your business.
Economic Trends For Business Owners In Rhode Island
As of December, 2019, the Bureau of Labor Statistics reported that the unemployment rate in the state of Rhode Island was 3.5%, which was on-par with the national average, which was also 3.5% at the same time.
Economists credit favorable taxes, the close proximity to regional markets, and the diverse workforce for the state's health economy.
In regard to locations within the state that offer the best opportunities in the Ocean State, urban areas are ideal. This includes:
The suburban regions that surround the state's metropolitan areas also offer favorable conditions for businesses.
Businesses of varying sizes and in a variety of industries are thriving in RI. At the time of writing, the sectors that are seeing the most activity in Rhode Island include:
- Financial services
- Health care
- Hospitality and tourism
- Professional services
Commercial Insurance Requirements In Rhode Island
The Rhode Island Division of Insurance Regulation regulates insurance in RI. Rhode Island mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Rhode Island requires you to have worker's compensation insurance if you have four or more employees on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Rhode Island also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
Additional Resources For Construction Contractors Insurance
Learn about construction contractors insurance, including how much the premium costs and what is covered - and how business insurance can help protect your construction business from lawsuits.
- Building Contractors
- Demolition Contractors
- Foundation Layers
- Steel Erection Contractors
- Surety Bonds
Construction contractors have substantial needs for many types of insurance coverage. Most would point to the importance of coverage for completed operations, premises liability coverage during construction operations at jobsites and professional or design errors and omissions insurance.
Such coverages can be provided only when the interests of the contractor and of the property owner are understood; particularly the contractual obligations assumed by the contractor. Next in significance is the workers compensation exposure followed by business automobile. Inland marine coverage for expensive mobile equipment, supplies, other tools of the trade and builders' risk can be vital.
Liability coverage is needed by a construction contractor in order to obtain most jobs. In addition, if a contractor wants to stay in business, it must be obtained to protect it from lawsuits due to its premises operations, off-site locations and products/completed operations exposures. Owners and contractors protective liability and railroad protective liability coverages may also be required in certain cases in order for a contractor to meets its obligations for particular jobs.
Many construction contractors do not have the usual location-specific buildings and business personal property exposures. Their business property is more mobile and, therefore, better covered with inland marine coverage forms. However, for those larger construction contractors that own buildings and/or maintain business inventory there are many coverage forms and choices available to them.
Construction contractors use their vehicles to get to and from their workplaces and jobsites. They also use vehicles to transport equipment and inventory to those locations. It is important to cover the liability of these vehicles for injury or damage they may cause, as well as to provide coverage for damage to the vehicles themselves.
Employers are required to provide coverage for injuries sustained by their employees while on the job. Construction contractors must comply with these requirements but some try to avoid them by hiring subcontractors. These subcontractors may actually operate and qualify as employees. The relationship between a contractor and its subcontractors must be carefully evaluated in order to determine if workers compensation coverage is still needed.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Surety Bonds, Accounts Receivable, Builders' Risk, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Umbrella Liability, Business Automobile Liability and Physical Damage, Hired and Nonowned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Contractors' Equipment, Goods in Transit, Installation Floater, Cyber Liability, Employment-related Practices Liability, Environmental Impairment Liability, Stop Gap Liability, Unmanned Aerial Vehicles (UAV) (Drones).
Request a free Rhode Island Mechanical Contractors insurance quote in Barrington, Bristol, Burrillville, Central Falls, Charlestown, Coventry, Cranston, Cumberland, East Greenwich, East Providence, Exeter, Foster, Glocester, Hopkinton, Jamestown, Johnston, Lincoln, Little Compton, Middletown, Narragansett, New Shoreham, Newport, North Kingstown, North Providence, North Smithfield, Pawtucket, Portsmouth, Providence, Richmond, Scituate, Smithfield, South Kingstown, Tiverton, Warren, Warwick, West Greenwich, West Warwick, Westerly, Woonsocket and all other cities near me in RI - The Ocean State.
Also find Rhode Islan insurance agents & brokers and learn about Rhode Island small business insurance requirements for general liability, business property, commercial auto & workers compensation including RI business insurance costs. Call us (401) 371-8771.