Most coverage gaps at a flooring company sit in the policy wording, not the limits. Liability insurance generally does not pay to redo your own failed floor. A pollution exclusion may apply when old floors come up, a silica exclusion may apply when crews cut tile or concrete, and there may be no clear answer for customers' furniture, uninsured installers or installers' own pickups. Many of these gaps can be spotted by reading the forms schedule and endorsements with the full policy in hand. This guide is for the buyer of a flooring contractor or showroom who has the core policies in place and wants to know where they may fall short.
The short answer
- A floor that lifts, cups or fails is a workmanship and warranty problem before it is an insurance one. Liability policies generally do not pay to redo the contractor's own work.
- The federal construction standard presumes old resilient flooring contains asbestos unless an industrial hygienist determines otherwise, and cutting tile or concrete creates silica dust. Both can run into exclusions that some policies carry.
- Customers' furniture, appliances and fixtures are handled daily, and liability policies commonly exclude property in your care, custody or control.
- Uninsured installers and employee-owned pickups are the people-and-vehicle gaps. Certificates and written auto arrangements can help close them.
- Look for each gap in the forms schedule and endorsements, not in the quote summary.
Where can an inherited flooring program fall short?
Here is where an inherited program can leave a hole. The table lists each gap with how to spot it and what to ask. It describes what to look for, not what any particular policy does, because the wording of your policy controls. A gap is not a sign that the seller's broker did poor work. A program built for the seller's way of working may simply not fit yours.
| Gap | Where flooring meets it | How to spot it | What to ask or do |
|---|---|---|---|
| Redoing your own work | A seam lifts, a floor cups, an adhesive fails | Exclusions for damage to your work, and any endorsement that removes the subcontractor exception | Ask how resulting damage to other property is treated versus the floor itself |
| Silica dust | Cutting or grinding tile, backer board or concrete | A silica exclusion on the forms schedule | Ask whether it is attached and whether crews use water-fed tools under a written plan |
| Old floors, dust and fumes | Removing old resilient flooring, using adhesives and finishes | A total pollution exclusion on the liability policy | Ask for a contractors pollution quote and check the asbestos protocol |
| Customer property | Moving furniture, removing appliances and fixtures | Care, custody or control wording | Ask how customers' belongings are treated and what the contract says |
| Uninsured installers | Installers paid per job who are not on payroll | No certificates in the file | Collect certificates and tell the insurer how installers are paid |
| Employee-owned pickups | Installers drive their own trucks to jobs | Auto schedule lists only company vehicles | Ask about hired and non-owned auto cover and driver rules |
| Showroom values | Stock and samples may be valued at actual cash value, and a coinsurance clause may cut a claim | Valuation and coinsurance lines on the declarations page | Reset limits from current stock, not the purchase price |
For your model and your lender, an uncovered gap is an unfunded liability. It shows up as a claim paid from cash flow, so find it before a claim does. A review of the declarations pages, forms schedule and endorsements, which Morrow can do, is a practical place to start.
Will the policy pay to redo a floor that fails?
Usually the question is split in two. Replacing the floor you installed is generally treated as your workmanship and warranty, and liability insurance is more likely to respond to damage to other property or to injury. Where the dividing line falls depends on the policy wording and state law. The standard liability form also has an exclusion for damage to your own work, with an exception for work done by subcontractors on your behalf, and an endorsement can remove that exception. A flooring company that uses subcontract installers is the kind of insured for whom that exception matters.
A hypothetical example. Six months after a hardwood installation, a customer says the new floor is cupping and the cabinets beside it are damaged. The customer believes the subfloor was damp. Three things decide how this goes:
- Were moisture checks done and written down? That is in your control.
- What does the warranty promise? That is a contract.
- How does the policy treat the cabinets compared with the floor? That is wording and state law, so expect the carrier to read the form, not guess.
A new owner can ask the seller for the warranty log and the callback history. See completed operations and claims on the seller's past jobs.
What about old floors, dust and fumes?
Three federal rules shape this gap, and each interacts with insurance wording.
- Asbestos. The Occupational Safety and Health Administration (OSHA) construction standard says resilient flooring, including its mastic and backing, must be presumed to contain asbestos unless an industrial hygienist (a specialist who tests materials) determines otherwise. Asphalt and vinyl flooring installed no later than 1980 must be treated as asbestos-containing. For removal work on flooring that is known or presumed to contain asbestos, the work practices say the flooring or backing must not be sanded, and rip-up of resilient sheet flooring is prohibited. The question for a new owner is what protocol the crews actually follow and who is trained.
- Silica. OSHA's construction silica standard caps dust exposure over an eight-hour shift, requires a written exposure control plan and lists controls such as integrated water delivery for handheld power saws and for walk-behind floor grinders. A silica exclusion endorsement exists and can remove liability cover for silica injury and cleanup, so check whether yours has one.
- Lead. The Environmental Protection Agency's Renovation, Repair and Painting (RRP) rule applies to paid renovations in homes built before 1978 and in child-occupied facilities. Whether a given floor job disturbs painted surfaces, and so triggers the rule, depends on the rule's definitions. Ask your attorney or the agency, and ask whether the company holds the firm certification.
The standard liability form has a pollution exclusion, and a total pollution exclusion endorsement narrows the exceptions further. A contractors pollution policy is a separate product, and what it covers for flooring work, such as asbestos, lead or fumes, depends on the form. See reviewing pollution coverage as a new owner and exclusions that quietly kill coverage.
Who pays when a crew damages a customer's things?
Flooring crews handle other people's property all day: they move furniture, take out appliances and remove fixtures and old floors. Liability policies commonly exclude damage to property in the insured's care, custody or control, and a party with a legal duty to look after property can be treated as having control of it. Whether a policy treats a customer's sofa or antique cabinet as excluded, and whether the damage is paid by the customer's own homeowners insurer, which may then seek reimbursement from you, depends on the form and the facts. Ask, do not assume.
Three practical steps help. Read the customer contract for a clause that limits your responsibility for moved items. Ask the broker whether any bailee or customer property cover is available for goods in your care. And keep a short move-and-photograph routine in the job checklist. See the care, custody and control glossary entry.
Which people and vehicles slip outside the policy?
Some flooring companies pay some installers per job, and that can leave you exposed twice. First, the insurer can add their pay to your workers' comp bill at audit unless their own employer lawfully secured workers' comp, and a certificate of insurance is the usual evidence. Second, a homeowner whose floor or belongings were damaged by an uninsured installer may look to the company that hired the installer, and an installer who is hurt may bring a claim against you if no workers' comp was in place. General liability usually excludes injury to the insured's own employees, and how it treats a subcontractor's worker depends on the wording and state law, so ask the broker. Get a certificate from each installer before work starts. See workers' comp and payroll for a flooring company for how the audit works, whether your subcontractors carry required coverage and 1099 workers and the audit.
Vehicles are the other half. The standard business auto form covers the vehicles that its covered auto symbols describe, which can be any owned auto or only the vehicles on a schedule, so a van or pickup missing from the list can be a gap. Installers who use their own pickups for company errands are another gap to check. Ask whether hired and non-owned auto cover applies, whether the company requires insurance on personal vehicles and who checks driving records. See hired and non-owned auto.
What extra gaps does a showroom or warehouse add?
A showroom turns on property and business income valuation. Under the standard property form, covered property is valued at actual cash value unless replacement cost is added, and a coinsurance clause cuts a claim if the limit is too low for the value at the time of loss. A purchase price is not insurable value, so reset limits from current stock and fixtures. Business income cover generally responds to direct physical loss to covered property, and the standard form has a 72-hour waiting period before it starts, though endorsements and other carriers' forms can differ. It does not respond to losing a key customer or the installer who knew every builder. See reviewing commercial property.
A company that sells flooring can be named in a product claim even when it did not make the product. Check supplier agreements for indemnity and insurance terms, and ask your attorney about product claims.
Keep reading
- Just Bought a Flooring Company? What Insurance Do You Need?
- Contracts, Licenses and Bonds for a Flooring Company
- Insurance Exclusions That Quietly Kill Coverage
- Completed Operations Claims From the Seller's Past Jobs: Who Pays?
- New Owner Review: Pollution Liability
- All guides for new business owners
Frequently asked questions
Will my liability policy pay to replace a floor I installed badly?
Generally no. Liability insurance is more likely to respond to damage to other property or to injury than to the cost of redoing the contractor's own work, and that line depends on policy wording and state law. Treat a failed floor as a warranty and workmanship issue first, and ask the carrier how resulting damage would be handled.
How do I know if my policy has a silica exclusion?
Look at the forms schedule and endorsements on the full policy, not only the declarations page. A silica exclusion is usually a separate endorsement, though carriers use different wording. If you cut tile, backer board or concrete, ask the broker in writing whether one is attached and what it removes.
Do I have to test old flooring for asbestos before I remove it?
The OSHA construction standard treats old resilient flooring, including mastic and backing, as asbestos-containing unless an industrial hygienist determines otherwise, and asphalt and vinyl flooring installed no later than 1980 must be treated that way. So the practical choice is to test or to follow the asbestos work practices. Ask your attorney or safety consultant what that means for your jobs and your state.
Are my customers' belongings covered while my crew moves them?
It depends on the form. Liability policies commonly exclude property in your care, custody or control, and customer property cover is a separate question to put to your broker. The customer contract may also limit your responsibility.
What is the easiest gap to fix in the first month?
Certificates for every installer who is not on your payroll, and a written answer on employee-owned pickups. Both are paperwork and policy-schedule fixes that can be done before the first renewal.
References
- OSHA construction silica standard, 29 CFR 1926.1153 (Cornell LII)
- OSHA construction asbestos standard, 29 CFR 1926.1101 (Cornell LII)
- EPA: Renovation, Repair and Painting Program
- 40 CFR 745.82, applicability of the RRP rule (Cornell LII)
- IRMI: Care, custody, or control
- IRMI: Pollution exclusion
- NCCI: Workers Compensation and Employers Liability Insurance Policy, WC 00 00 00 C
Just bought a business? Get your insurance reviewed.
Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.
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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.