Cautionary Tales of UnderInsured Contractors! – Mervyn Salas – Roofers Choice Insurance

It's the language in the policy, not the price tag, that decides whether a claim gets paid, so read the forms and endorsements, not just the declarations page.

Open-roof exclusions are brutal: a pop-up thunderstorm caused a $1.3M loss at a Florida chocolate factory, and one contractor paid $66,000 out of pocket after picking a cheaper policy with that exclusion.

Not collecting certificates of insurance (with additional-insured and hold-harmless language) from subs can trigger a massive audit; one contractor got hit with a $97,000 bill.

Using a cheaper carpentry code instead of a roofing code voids claims: file a roofing claim on a carpentry-coded policy and they simply won't pay.

Bodily-injury/action-over claims are a rising trend: a sub who fell off a ladder in Montana led to $78K in defense plus $220K in bodily injury, a ~$300K exposure that can bankrupt a contractor.

Watch for the CG 2294 exclusion, which excludes work performed by subcontractors, meaning zero coverage if you sub out labor; one Austin contractor paid an $83,000 claim after a sub hit a water line.

Reclassifying as a GC can backfire: many GC policies cap roofing at ~20% of sales, so if roofing is actually 51%+ (or over the cap) you get an unfavorable audit at roofing rates.

Also verify height restrictions and torch-down coverage; both are commonly excluded and leave you holding the bag on multi-story or torch-down work.

Work with an agency that understands roofing, get an annual policy review that pits carriers against each other, and have solid residential and commercial contract language (e.g., utility lines not run to code) to limit liability.