If you own or operate a scaffolding company, finding the right insurance program can be more difficult than it is for most contractors.
Scaffold erection and dismantling is a specialized trade. Your employees are working at height, your equipment moves from project to project, your trucks and trailers are constantly on the road, and your customers often have extensive insurance requirements before you can step foot on a jobsite.
Unfortunately, not every insurance carrier understands the difference between a scaffold contractor and a general contractor.
We work with scaffold erection contractors, scaffold rental companies, access contractors and other businesses in the scaffolding industry. One thing we see regularly is that two scaffold companies with similar revenue can have completely different insurance programs and costs.
The reason is that scaffolding insurance is about much more than revenue.
General Liability Insurance for Scaffold Contractors
General liability insurance is one of the most important parts of a scaffold contractor’s insurance program.
A typical scaffold company may be responsible for delivering equipment, erecting the scaffold, modifying it during a project and eventually dismantling the system.
That creates liability exposure throughout the life of the project.
When reviewing general liability insurance for scaffolding contractors, we pay close attention to the actual policy forms and exclusions.
A quote can look competitive until you read the policy.
Residential exclusions, height limitations, classification limitations, subcontractor restrictions and other endorsements can materially change the coverage being purchased. This becomes especially important for scaffold companies working on apartments, condominiums, hotels, industrial facilities, commercial buildings and other large projects.
Price matters, but a low general liability premium does not mean much if the policy contains an exclusion that conflicts with the work your company actually performs.
Workers Compensation Insurance for Scaffolding Companies
Workers compensation is another major cost for scaffold erection contractors.
Scaffold employees are performing physical work at height, loading and unloading equipment, handling heavy materials and working around other trades. A serious workers compensation claim can become expensive very quickly.
Insurance carriers typically want to understand much more than total payroll.
They may look at employee experience, fall protection, safety training, supervisor involvement, hiring practices, return to work programs, claim reporting and previous loss history.
This is one area where a scaffold company can have more control over its long term insurance costs than many owners realize.
Getting an injured employee appropriate medical treatment quickly, communicating with the insurance carrier and implementing a written return to work or light duty program can help control the development of workers compensation claims.
Over time, better claims performance can also create more options when marketing workers compensation insurance for a scaffolding company.
Commercial Auto Insurance for Scaffold Companies
Commercial auto insurance sometimes gets overlooked because so much attention is placed on the general liability and workers compensation exposure.
It should not.
Many scaffold contractors operate flatbeds, stake body trucks, pickups, trailers and other commercial vehicles every day. Those vehicles are traveling between the yard and jobsites, often in congested areas.
One serious commercial auto accident can easily become the largest liability claim a scaffold company has ever experienced.
When reviewing commercial auto insurance for scaffold contractors, we look at the drivers, vehicle schedules, loss history, radius of operations, vehicle use and how the umbrella or excess liability policy interacts with the auto policy.
That last part is especially important.
Umbrella and Excess Liability Insurance for Scaffold Contractors
Scaffold companies are frequently required by general contractors and project owners to carry liability limits well above $1 million.
That is where umbrella and excess liability insurance comes into play.
The important question is not simply how much excess insurance you have.
It is what policies sit underneath it.
A scaffold contractor may have a $5 million umbrella or excess liability policy and assume it provides an additional $5 million over every liability exposure. That is not always the case.
We have reviewed insurance programs where an umbrella provided additional limits over the general liability policy but did not provide excess limits over the commercial auto policy.
For a company with a meaningful fleet, that is something we want to identify before a serious accident happens.
Inland Marine and Scaffold Equipment Insurance
Scaffold equipment can represent a significant investment.
Frames, systems scaffold, planks, platforms, swing stage equipment and other materials may be stored at the company’s yard, transported on trucks or trailers, or sitting at a customer’s jobsite for weeks or months.
A standard property policy may not adequately address equipment that is constantly moving between locations.
Inland marine insurance and contractors equipment coverage can be an important part of an insurance program for scaffold rental and erection companies.
The policy should be reviewed based on how the equipment is actually owned, rented, transported, stored and used.
Insurance Requirements and Contracts
Scaffold contractors also deal with extensive insurance requirements.
General contractors may require additional insured status, primary and noncontributory wording, waiver of subrogation, per project aggregates and specific umbrella or excess liability limits.
The contract and the insurance policy need to work together.
We frequently review contracts and insurance requirements for our scaffold clients before a project begins. A strong scaffold rental contract can also play an important role in transferring risk between the scaffold company and the customer.
It is much easier to identify a problem before a contract is signed than after a certificate of insurance is requested.
Why Scaffold Insurance Markets Can Be Limited
Not every commercial insurance carrier wants to insure scaffolding contractors.
Some carriers will insure scaffold rental but not erection and dismantling. Others may consider frame scaffold but have restrictions involving suspended scaffold, swing stages, mast climbers or certain types of projects.
Geography matters as well.
A scaffold contractor operating in California, New York, New Jersey, Florida or other difficult liability environments may face a very different insurance market than a contractor performing similar work elsewhere.
That is why understanding the operation before approaching insurance carriers is important.
Sending the same generic submission to every carrier is rarely an effective strategy for a specialized scaffold company. Understanding scaffold erection risk and presenting the company’s controls, loss history and operations properly can have a significant impact on how underwriters view the account.
Controlling the Long Term Cost of Scaffolding Insurance
There is no single insurance carrier that is the best fit for every scaffold contractor.
The better approach is understanding what drives the company’s total cost of risk.
That includes general liability, workers compensation, commercial auto, umbrella and excess liability, equipment coverage, claims, contracts and safety practices.
For larger scaffold contractors with strong loss history, it may also make sense to evaluate higher deductibles, loss sensitive programs, group captives or other alternative risk structures.
Those options are not appropriate for every company. They become more relevant as a scaffold contractor grows and develops enough premium and loss history to take a more active role in how its insurance program is structured.
At Deerfield Risk Advisors, we work with scaffold erection, scaffold rental and access contractors across the country. Our approach is to review the entire insurance program rather than simply shopping one policy at renewal.
For a specialized trade like scaffolding, the details matter.
Learn more about our insurance and risk management approach for scaffold and access contractors.
