Solar Installer Coverage Gaps After You Buy

Many coverage gaps at a solar installation company sit in clauses rather than in missing policies. Of the ten gaps in the table below, test six first: finished roof work carved out of liability cover, contracts that ask for endorsements the policy lacks, energy output promises, design work with no professional cover, battery exposures and crews who are on nobody's workers' comp. This guide is for the buyer who already holds the seller's policies and wants to know what to ask.

The short answer

A gap is often a clause, not a missing policy. Read the endorsement list, not only the declarations page.
Liability policies respond to injury and damage to other people and their property. They generally do not pay to redo your work or to make a system produce what a contract promised.
Test these six first: finished roof work, contract endorsements, output promises, design work, batteries and staffing crews. The table adds four housekeeping checks.
Each gap has a fix: an endorsement, a separate policy, a contract change or a new process. None is certain until a carrier agrees in writing.
A certificate of insurance is not the policy, and a quote is not coverage.

Where are the gaps in a solar installer's policies?

The table lists ten gaps: the six above plus four housekeeping checks. It shows how each one shows up and the first fix to raise with a broker.

Common coverage gaps at a solar installation company, how to spot each and the usual fix
Gap	How to spot it	What to raise with the carrier or broker
A contract asks for endorsements the policy does not carry	An insurance clause naming additional insured, primary and noncontributory wording or a waiver, with no matching endorsement on the form list	Which endorsements can be added, for which customers, and whether an indemnity clause is wider than the policy
Finished roof and mount work carved out of completed operations	A designated work exclusion or roofing endorsement in the general liability form list	Whether the endorsement can be removed, narrowed or priced, and which jobs it names
Output and savings promises in sales contracts	Contract wording such as a minimum power promise, or savings figures in a proposal	A contract cap and disclaimer, plus whether any warranty or professional product responds
System design, sizing and roof suitability advice	A professional services exclusion on liability, and no separate professional policy	Professional liability with a retroactive date that reaches back before the closing date, ideally to the start of the company's design work
Stored and installed batteries	A pollution exclusion, or property conditions on stored batteries	How the policy treats battery fire, smoke and disposal, and what the application says about battery work
Staffing and subcontractor crews	Missing or stale certificates for crews that work on your roofs	A certificate file with dates, and the workers' comp audit effect of uninsured crews
Tools and stock in trucks	An equipment floater with a low limit or conditions on vehicles left unattended	A schedule that matches the real assets and the vehicle theft terms
Payment redirect fraud	A crime form with a small social engineering sublimit, or none	The sublimit, plus call-back controls for bank detail changes
An umbrella that stops short	An umbrella schedule that lists underlying policies but excludes professional or pollution claims	Which exposures the umbrella sits over, and whether its limit meets what customers require
Wrong named insured after the deal	A policy still naming the seller or an old entity	Endorsements that fix the name and add any new entity

See how to find coverage gaps after you buy a business and exclusions that quietly kill coverage for the general method.

Why might a leak at the panel mounts not be paid?

A roof penetration (the hole a mount makes through the roof) can fail long after the crew leaves. Standard general liability covers bodily injury and property damage that occurs during the policy period, and its products and completed operations part picks up damage from your finished work, with its own aggregate limit. Which year's occurrence policy responds generally depends on when the damage happened, not when the work was done, and states differ where damage spans several years.

Four things can change the answer.

The form list. A carrier can attach a designated work exclusion that removes completed operations cover for scheduled work. Whether a given carrier attaches one to solar jobs is a question for your own form list.
A stock or membership interest purchase. The company that did the work is the company you own, so the policy in force when the water gets in may respond, subject to its terms and any exclusion.
An asset purchase. The standard form defines your work as work done by you or on your behalf and has no matching wording for a predecessor's work, so a roof the seller's crew finished can fall between the seller's old policies (which respond only to damage that happened while they were in force) and your new one. The same form's wording for your product does reach goods sold by a business whose assets you acquired, so a failed battery or inverter and a leaking mount can be treated differently. Whether you are legally liable for either is a question for counsel.
Damage already known at closing. A new occurrence policy generally does not pick it up, so a roof that is already leaking is a deal price and indemnity question.

Ask your carrier for its position in writing.

A hypothetical example. A residential crew installs a rooftop system two years before closing. Three winters later the owner finds ceiling stains below the mounts, and the new owner's crew is called back. The first questions:

Was the deal a stock or an asset purchase?
Which policy years were in force when the water got in, and was any leak already known at closing?
Do those policies carry a roofing or designated work exclusion?
What does the purchase agreement indemnity or escrow say about pre-closing installs?
Who pays for the roof repair itself, and what time limit does the state set on construction claims?

The cost to redo the mount flashing is usually a business expense. Resulting damage to the ceiling and contents may be a liability claim, depending on the policy and the facts. The deal side is in completed operations claims from the seller's past jobs and stock vs asset deal: who covers old claims.

Does insurance pay when a system produces less than promised?

Usually no. Liability policies respond to injury to people and damage to other property. A system that makes less power than a contract or proposal said is a performance problem, and it generally sits with the contract and any warranty, not with liability insurance. California's licensing board treats output claims as a consumer sales issue: the Contractors State License Board (CSLB) tells homeowners to check how panel count and energy output were calculated and whether the contract promises a minimum power level.

For you, the question is inherited promises. Ask for the contract forms used before closing and look for savings figures, escalator language, production promises and caps on liability. Then ask: does the contract limit the company's liability for output shortfall, does any manufacturer or third-party warranty stand behind the promise, and does the company need professional liability if it estimates output for customers? Our guide to new owner review of professional liability explains how claims-made cover and the retroactive date work.

What else do solar buyers miss: batteries, tools in trucks and payment fraud?

Each is a question for the carrier, not a conclusion about what a policy covers.

Batteries. Lithium-ion storage adds a fire and disposal exposure, and the stock and property side is in what insurance you need after you buy a solar installation company. The Environmental Protection Agency (EPA) names the equipment maker or the installer as a contact for managing end-of-life energy storage, so a company that removes or replaces batteries may be asked to take them back. How a liability pollution exclusion treats battery waste or smoke varies by carrier and form, so ask in writing.
Tools and stock on the road. The floater, schedule and theft terms are covered in equipment and inland marine. For solar the extra question is per-item limits on inverters and batteries.
Payment fraud. A distributor emailing changed bank details for a panel order is the solar version of the scam, so ask what the social engineering sublimit is. See funds transfer fraud for new owners.

For the battery smoke and disposal question, see the general review of pollution liability.

How do staffing and subcontractor crews create a gap?

A solar company may borrow hands in a busy quarter, and the Bureau of Labor Statistics (BLS) puts 17 percent of solar photovoltaic (PV) installers in temporary help services. The gap is whose workers' comp policy responds when a staffing or subcontractor crew member is hurt on one of your roofs, and whether an uninsured crew lands on your audit.

The fix is a process: collect certificates before the crew arrives, check that dates and workers' comp are shown, and keep them in one file. A certificate is information about a policy, not the policy, so for important crews ask for the endorsement too. The workers' comp detail, including audit mechanics, is in workers' comp, payroll and class codes for a solar installation company, and the tracking routine is in tracking certificates in the first month.

How do I find and fix these gaps in the first month?

Request the full policy forms and endorsement lists, not only the declarations pages. Mark every exclusion that touches roofs, electrical work, batteries, professional services and pollution.
Read three sample customer contracts and one commercial or financier contract. List every promise about output, savings, warranties and insurance.
Match each promise to a policy or to nothing. The items that match nothing are your gaps.
Ask the broker which gaps can be closed by endorsement, which need a separate policy, and which are contract fixes. Ask for each answer in writing.
Set a date for each fix before renewal or the first investor update. Contracts that require coverage you do not have is the usual starting point.

Morrow can review inherited policies against the business you bought and flag gaps, but any new terms depend on carrier underwriting. The first guide in this set, what insurance you need after you buy a solar installation company, lists the core policies, and was the seller underinsured? covers limits.

Keep reading

Frequently asked questions

What should I fix first in the seller's program?

No loss data ranks the gaps for this industry, so test each one. Finished roof work is a sensible first check because installed systems stay on roofs for years. A designated work exclusion or roofing endorsement can remove completed operations cover for scheduled work, so read the endorsement list and ask the carrier how it treats finished solar and roof work.

Does general liability cover a solar system that does not make the power I promised?

Generally no. Liability policies respond to injury to people and damage to other property, not to a performance promise. Check the customer contract for output language and caps.

Do I need professional liability if I design solar systems?

It may help. Standard liability forms can carry a professional services exclusion, so design, sizing and output estimates can fall into a gap. Whether professional cover fits depends on what your company does. Ask your broker and read the retroactive date, because claims-made cover only responds to work after that date.

Are subcontractor certificates enough to protect me?

A certificate is a record of a policy at a point in time, not the policy itself. Collect it before work starts, check dates and workers' comp, and keep it on file. Ask for the endorsement on crews that matter most. State law and your policy decide what happens if a crew is uninsured.

How do I check a battery exposure in the seller's program?

Ask in writing how the property policy treats stored batteries, whether the liability policy has a pollution exclusion that touches battery fire, smoke or disposal, and whether the application describes today's battery work. Terms vary by carrier and form.

References

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.

Coverage Gaps in a Solar Installation Company You Bought