A sad tale of cold weather and work exclusion

With the recent bad weather we have been having, you may have experienced the need for insurance. 

~ It could have been a recent slip on the ice requiring you to visit the emergency room.
~ Maybe you had a branch that came crashing down on top of your home causing roof damage.   
~ You may own the innocent car on the side of the road that was used like the side bumper of a billiards table.

Let’s look at a recent situation 

Mike, a sole proprietor operating a sign installation business, erected a sign on a tall steel pole for a convenience store.  Mike provided both the sign and the tall steel pole.  The next day, freezing rain came down and ice accumulated on the sign that Mike had installed.  Bob, the owner of the convenience store, noticed his sign was starting to resemble what looked like a very large popsicle.  And with each gust of wind, the sign would start to sway back and forth.   

Later that day, the sign fell on the convenience store and injured a worker.  Bob, had damage to the store, a worker, and a very expensive sign.

What is Bob going to do?

• File an insurance claim
• Sue Mike
• Worry about his worker

An investigation of the accident revealed that the sign and the steel pole were blown down because Mike had failed to secure them properly.

Bob sued Mike for the damage to the building and resulting business interruption.  The worker sued Mike for medical expenses, income loss, and pain and suffering.

What damages would Mike’s policy cover?

Mike’s policy would cover all damages claimed except the cost of replacing the sign and steel pole which were “his work.”

Pay close attention to the damage in your work exclusion.  It eliminates coverage for property damage to “your work” arising out of that work or any part of it.  It prevents the insurer from replacing faulty work of the named insured.

If you have not checked with you insurance carrier -- now is the time.  Some carriers are allowing you to buy this very important coverage.

Comments

[Rush Nigut]

Great post. But in this case couldn't Mike argue that the fact the sign fell was due to weather conditions which should have been covered by insurance? Who did the investigation - an insurance company representative? In light of the circumstances Mike could also potentially have protected himself individually by incorporating or forming an LLC rather than operating as a sole proprietorship.