June 9th, 2020
Swimming pool and spa contractors have a completely different set of risks than the general construction industry.
Risks can arise from digging, experiencing adverse weather conditions, designing the drainage system, installing the product, or even spraying gunite. You also have to comply with strict regulations, such as the Americans With Disabilities Act (ADA) and the Virginia Graeme Baker Pool & Safety Act.
There are an infinite number of things that could go wrong. By knowing what commercial swimming pool insurance you need to cover your risks, you can protect your business and its assets from potential accidents.
While we suggest having a comprehensive contractor's insurance program, here are some of the other coverages we consider to be essential for a pool and spa contractor.
While general liability coverage will protect you from property damage or bodily injury you cause while on the job site, a products and competed operations policy will cover any damage you cause after the project is completed.
For example, let’s say you built a pool for a customer (or even took part in building a pool) and two years later, the pool malfunctions in a way that leaks water into your customer's home. You are legally responsible for fixing the pool and repairing the home damage.
Products and completed operations coverage will cover the costs of both the damage (up to the policy limit) and your legal defense if you are named in a lawsuit.
This coverage is located within the products and completed operations policy forms, but we believe it is important enough to mention separately.
Under standard products and completed operations policies, the property damage you cause is covered but not “the work” that you perform.
Using the example above about the leaky pool, a traditional policy (without pop-up coverage) would pay for the water damage caused to your customer's home, but leave you to pay for the pool replacement.
Policies are written this way so contractors don't use insurance as substitute for performing quality work.
But pool contractors have a unique problem because a pop-up event can be costly. The entire pool can be considered "your work" and thus traditional insurance would not cover any of the costs to rebuild the pool.
This pop-up endorsement adds backup coverage and protects your business from the potentially high costs of product replacements.
Installing a pool or spa requires purchasing a lot of equipment, such as various piping and pumps. If your company recommends or sells certain equipment and that equipment is inadequate or does not function as intended, you could be on the hook for your recommendation or installation. A professional liability policy would protect you in a lawsuit and ultimately pay for the incurred damages.
CNA is an insurance company that underwrites coverage for construction companies of all sizes. It has a swimming pool and spa contractors program that provides a great combination of coverage and price. CNA is endorsed by many of the national pool contractors associations and are a popular choice in the industry.
The Hartford is another insurance provider that specializes in coverage for pool and spa contractors. We recommend this insurance company because it can provide essential coverages on broad coverage forms.
Philadelphia is one of our most common recommendations for pool and spa contractors because of its broad coverage options. For example, it is one of the only providers that will include professional liability, pollution liability, and pop-up coverage all in one policy to provide a truly comprehensive insurance program.
As with purchasing any swimming pool service insurance policy, the cost will ultimately depend on the size of your operations and the type of work you are performing. If you are just starting your business, we have seen policies as low as $1500 per year that provide broad coverage.
As your operations expand—you hire more employees, have more equipment, and grow your revenue—your insurance premiums (along with your risks) will increase.
Pool and spa contractors are unique in what coverages they need and also what insurance carrier options are available. If you would like a quote from any of our three recommended options or want a review of your commercial swimming pool insurance policy, let us know.
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