Contractors Errors & Omissions Coverage
Effective September 1, 2014, Erie Insurance is making Errors and Omissions coverage available to add as optional coverage for Contractors on the Ultraflex and Fivestar policies. The Contractor’s E&O coverage provides coverage for the insured’s negligent acts, errors, or omissions or from a defect in a product sold or installed by the contractor.
It is a claims made endorsement with the defense outside the current policy liability limits. Meaning that this specific coverage will have its own liability coverage limit separate from the policy limit and the liability limit must be equal or less than the current policy liability limit. Available limits are $100,000, $300,000, $500,000 and $1,000,000 and this coverage cannot be included on a Business Catastrophe Liability (BCL) policy.
The coverage also requires a minimum $1000 deductible with higher options of $2500, $5,000 and $10,000 available. A couple of claims examples to better understand the coverage include: A Plumbing Contractor installs new plumbing then find out the piping used has been recalled because of a product defect; an Electrical Contractor designed and installed an electrical system with wiring under the concrete ground floor then has to reinstall because the wiring can’t handle the power load: a Heating Contractor installs a boiler and due to a faulty hookup to the boiler, fire destroys the building.
The damage to the building would be covered under your Business Liability policy, but the damage to the boiler would be covered under the Contractor’s E&O coverage. It is important to know that all job classifications do not qualify for this coverage. It must be part of the eligible classes that Erie Insurance is offering.
If interested, you must contact our agency to make sure your job classification does qualify to add this coverage. A supplemental application must be completed, signed and submitted to the Erie Insurance Commercial Underwriting department for approval prior to adding the coverage.