Solar Contractors and Their Flood of Risks That Are Recently Coming to Light

With the advent of Renewable Energy Credits being offered to those that use renewable energy systems there has been an increase in the amount of solar systems that are being installed for both commercial and private use around the United States. Everyone feels great about going green and having a tax incentive does not hurt either. There of course has to be contractors that need to fill this need with installations of solar arrays. These contractors have traditionally come from other backgrounds as there typically was never a standard trade for Solar Installation in the construction realm. Artisan Contractors such as Electricians, Plumbers and even Roofers have begun making the move to solar contracting in order to cash in on the free flow of green that is coming down the pipeline. The problem is in the combination of risks that these mixing of traditional trades have created and it is throwing the insurance companies and insurance agencies a curve ball. If the contractors are not careful, the solar contractor can be misclassified by an insurance agent that does not have the necessary experience to understand the large range of risks that solar contractors are now facing. Solar contractors luckily have not been lumped in the highest order of risk by most insurance companies. Roofers by comparison are thought of as being a riskier group. Solar contractors however, do create claims and here we will dive into some of the types of claims along with the insurance types that are created for them.

Damage to bodily injury and property damage to a third party. Contractors, whether solar or otherwise, cause damage on a regular basis which is one great reason why their insurance tends to be more expensive compared with other insureds. Solar contractors perform a combination of Electrical, Plumbing and Roofing operations with two out of the three having traditionally high levels of claims. One of my company's biggest insureds claims came from a Plumber burning down several homes in a tract development. Understanding the combination means that the insurance coverage provided will be designed to include all the trades associated with their operations. If not covered correctly, the results may be disastrous.

Solar, being what it is, comes from up high which means that the solar contractor usually works on elevated and dangerous surfaces, such as on roofs. These conditions lend themselves to gravity taking over at just the wrong moment resulting in people getting injured. Roofers have some of the highest number and severity of work compensation insurance claims in the business. I have personally sat with four roofers and was told stories of each one falling no less than four times each from roof tops over the years. Solar contractors are akin to similar types of claims for employee injury and therefore need to be covered for them. If the Solar Contractor gets a mis-classification for their workers compensation code, they can be in for an extremely rude awakening when the final audit comes from the insurance carrier. And the work comp carriers ALWAYS AUDIT!

Another type of risk that Solar Contractors must worry about now is not always that apparent and most times not insured for. Decrease of revenue caused as a result of a Solar Contractors design or installation causing lowered output as promised. Most policies flat out exclude such type of claims as they tend to reside in between coverage types. Several insurance companies are now seeing that Solar Contractors need this coverage and are now insuring for this specifically. Several are even offering performance warranties to fill the gaps.

Solar arrays can be very costly and fragile too. Systems in the tens of thousands of dollars are not unheard of and becoming more common place. Most insurance policies do not insure property in the care, custody or control of the contractor and would be useless in case one of these arrays is stolen or broke. That is where certain property carriers have created policies that are made for this kind of risk. Making sure your agency understands your particular risks is important to avoiding large losses.

Solar Contractors in many ways have higher amounts of risk than the other traditional Artisan Contractors they once were. They perform electrical, plumbing, roofing as well as many other trades that would take to long to detail in this article. Combining all the Solar Contractors risks leads one to want to make sure and procure an insurance policy specifically made for their business. Taking the first policy given from the shelf without making sure the coverage is right for the particular needs of the Solar Contractor could result in the lights going out on their business prematurely.