The Seven Deadly Endorsements – Part 7 General Liability Endorsements That Are Bad For Contractors

Endorsement #7 – Designated Work Exclusion

A Designated Work Exclusion is a form used by insurance carriers to exclude specific types of work from coverage.  This general liability endorsement can be harmless or very bad for a contractor depending on what it says.  This is a “fill in the blank endorsement”.  Below is an example:

This exclusion can be especially dangerous for contractors if part of what they do is listed.  For example, a painting contractor might think he is covered to do all aspects of painting for which he is licensed.  When he bought his insurance policy, he wrote Interior Painting on his insurance application.  Six months into the policy, the painter does an exterior painting job not realizing that he had a Designated Work Exclusion which listed “Exterior Painting” as an excluded operation.  During the exterior job, an overspray results in the damage of several cars.   In this scenario, the painting contractor would have no coverage for the damage to the vehicles. 

If you notice that your policy has a Designated Work Exclusion, take a second look to be sure that parts of your operations are not excluded.  The experts at Orr & Associates can review your current insurance policies to find this and other key exclusions which you should be aware of.  We’ll give you the knowledge and tools to make the right decisions about your insurance.  For more information, please contact Tarah Gruber at 619-487-0376 orTarah@redhotinsurance.net.  Or visit www.redhotinsurance.net.