Contractor Insurance: SHOP vs OFFICE when writing BOP.

[MIGA1626]

When I go to quote BOPs for contractors its always asking me if its (shop) or (office). WHAT THE HECK AM I SUPPOSED TO PICK. I just want a freakin' policy! QUIT PLAYING GAMES WITH ME. If a plumber wants to go out to someone's house with his little 6 employee venture and install new plumbing I just want it covered for liability and a little equipment. No one at any of the carriers will tell me the difference. Is a shop a physical building owned by the insured or does that liability follow them around as the work around town. I have a 6 million commercial book, you think I would know these things but I don't. Thanks for being my therapist.

 

[adjusterjack]

I think the question has to do with the premises liability underwriting and wouldn't necessarily make any difference in the contractor's liability coverage.

Shop - Where supplies, materials, equipment, and vehicles are present. Workers and their vehicles are regularly present to get materials for their vehicles. Would likely include a space for office activities but that would be secondary to the shop activities.

Office - Where the business administration takes place. Desks, computers, file cabinets, maybe a clerical employee. No supplies, materials or equipment on premises. No vehicles (other than maybe the owner's vehicle). Workers don't attend. Strictly administrative. Often the contractor's home office.

They are mutually exclusive (or should be). When an office crosses over into even minimal shop activities, it's a shop.

My take:

If the contractor runs his business out of his home, the location is office.

If he runs the business out of a commercial property, safe to call it shop.

There is likely a remarks section on the application where you can explain why it's a shop or an office.

 

[MIGA1626]

Thank you! Does the GL coverage still extend to where they are doing activities off premises? I.E. an electrician going to someone's house to add a circuit, a plumber going to someones house to fix a line... ect....

 

[adjusterjack]

Yes, the Commercial General Liability coverage form does extend to wherever the insured and his employees are working but does not cover what he or his employees are working on.

I've posted a copy of the standard CGL form.

Whatever type of insurance you are selling you should create a library of forms to refer to and become familiar with them because they are where you will get your insurance education.

You can get the forms from your carrier or from ISO (Insurance Services Office).

 

[Al3x Lee]

When I go to quote BOPs for contractors its always asking me if its (shop) or (office). WHAT THE HECK AM I SUPPOSED TO PICK. I just want a freakin' policy! QUIT PLAYING GAMES WITH ME. If a plumber wants to go out to someone's house with his little 6 employee venture and install new plumbing I just want it covered for liability and a little equipment. No one at any of the carriers will tell me the difference. Is a shop a physical building owned by the insured or does that liability follow them around as the work around town. I have a 6 million commercial book, you think I would know these things but I don't. Thanks for being my therapist.

I agree with Jack, I tend to put shop if they have a physical location where they store things or customers can come to a physical premises. If they run it out of their house, I tend to put office.

As far as I've seen, it seems to make no difference to the coverage forms, I think it's just a difference in how premises liability and possibly the BPP/IM get rated.