Description of operations: Heating contractors install, service and repair the various heating units within a commercial building or a residence. Of high importance is the fuel source of the heating unit to be installed. Each type of fuel source poses its own unique set of hazards. The fuel sources can be natural or LP gas, electric, steam, solid fuel, coal, or fuel oil. Contractors may also sell the units they install. Many contractors may also install, service, and repair air conditioners.
Property exposures at the heating contractor's own location usually consist of an office operation, and often shop and yard exposures for product, material, equipment, and vehicle storage. Operations may also include a retail sales location. Welding or brazing work conducted at the shop and storage of welding gases and heating fuel at any location can significantly raise the fire hazard; failure to follow proper storage procedures may indicate a morale hazard.
Inland marine exposures include contractors’ tools and equipment, the transport of materials, and installation exposure. The types of jobs determine the type of equipment. In addition to hand tools, there may be larger equipment such as hoists and portable welders.The goods in transit consist of tools and equipment as well as product purchased by the customer for installation at the job site. Heating units can be of high value and susceptible to damage in transit; they frequently require expertise in loading to prevent load shift or overturn. The installation floater exposure exists when the units to be installed are delivered to the site in advance of the installation. Hazards to machinery, tools, or building materials left at job sites include theft, vandalism, damage from wind and weather, damage by employees of other contractors, etc. The insured may rent, lease or borrow equipment from others or rent, lease or loan equipment to others, especially equipment that is used on a limited basis which poses both an inland marine and a liability exposure.
In commercial work, cranes may be used to install large or suspended heating units. Equipment or heating units may be subject to drop and fall hazards from heights. Since any accident may trigger both the equipment and installation coverages, as well as possible third-party liability, many contractors prefer to hire a crane with a licensed operator.
Premises liability at the contractor’s office or shop is minimal unless retail sales are taking place. The major exposure is at the job site where items may fall, welding may cause fires, and employees may cause injury or damage to employees of other contractors or their property or to the general public. Pressure-testing of boilers and other pressure vessels is another potentially severe exposure.
If the contractor is working on existing systems, consider the potential exposure of removal of old units which also adds a waste disposal hazard.
Completed operations is another major area of potential high loss exposure. When a heating unit malfunctions, the cause may be difficult to determine. Specialists may have to be hired to determine whether it arose from improper operation and maintenance, or from faulty system design, faulty manufacture or faulty installation. Quality controls, including work order documentation, and employee training, background, and experience are important. Boiler work, LP gas units, and wood burning units have high products liability exposures. Improperly installed heating units pose potential injury to tenants and their customers within buildings due to exposure to carbon monoxide and other fumes or gases.
Environmental impairment concerns revolve around the disposal of old insulation and the use, transportation, and disposal of fuels and related pollutants. Key concerns are procedures and training for spill control and disposal.
Automobile exposures are moderate to high, depending on the extent of the transport of materials, machinery, and heating equipment. Age, training, experience, and drivers’ records, as well as the age, condition and maintenance of the vehicles are all important items to consider.
Workers compensation exposures are varied, but both residential and commercial work involves lifting, work with hand tools, wiring, and work with piping. Cuts from the fabrication and installation of sheet metal for ducts and vents are common, as well as the work-at-heights exposure while installing the same. Any time work is done above ground, injury or death from falls and being struck by falling objects can occur. Slips and falls, foreign object in eyes, major and minor burns, as well as inhalation of fumes are all potential hazards. Complications from the large, heavy machinery and their use, misuse, maintenance, and transport have unique hazards that need review. Welding may be done in confined spaces so proper ventilation and fire protection are essential to prevent injury to workers. In repair and reinstallation operations, workers may come in contact with old insulation to be removed, some of which may include "friable" (easily crumbled) asbestos. Procedures must be in place to identify and handle this exposure.
Careful consideration must be given to the type of boilers, the fuel used and the services the insured provides. The pressurized vessels present a unique hazard with potentially severe losses.
Minimum recommended coverage:
Business Personal Property, Contractors’ Equipment, Goods in Transit, Installation Floater, Employee Dishonesty, General Liability, Employee Benefits Liability, Umbrella Liability, Automobile Liability and Physical Damage, Hired and Nonownership Auto, Workers Compensation
Other coverages to consider:
Building, Business Income with Extra Expense, Accounts Receivable, Valuable Papers, Computers, Employment Related Practices Liability, Directors and Officers – for profit, Environmental Impairment Liability, Stop Gap Liability, Federal Employers’ Liability Act (FELA) Workers Compensation
Reprinted copyrighted material with permission by the Rough Notes Company, Inc.
