By Cole Rarrick
Founder, President | Mountain View Insurance Services

Most contractors treat the subcontractor agreement like the warranty booklet that comes with a new truck. You sign it, file it away, and never look at it again until something goes wrong. The GC makes you sign one to get on the job, or your insurance company asks to see them at audit, so you grab a signature when somebody reminds you and move on. Paperwork. A box to check.

I want to change how you see that piece of paper, because it's doing one of the most important jobs in your entire risk program, or it's doing nothing at all, and the difference only shows up on the worst day.

Here's the day. A guy who works for your concrete sub trips on your job site and shatters his wrist. Or your grading sub didn't compact the base right and two years later the slab cracks and the owner comes after everybody who touched the project. Or your hauling sub's truck clips a car on the way to your site. In every one of those, a question gets answered fast, and you don't get to answer it after the fact. Whose problem is this?
​
Your subcontractor agreement is what answers it. A strong one pushes that loss back onto the sub and the sub's insurance, where it belongs. A weak one, or none at all, leaves it sitting on you.

​It's not paperwork. It's risk transfer.
Strip away the legal language and a subcontractor agreement does one simple thing. It moves the risk of your sub's work off of you and onto them.

You're hiring somebody to do work you're ultimately responsible for in the owner's eyes. The agreement is how you make sure that when their work causes a problem, their insurance pays for it instead of yours. That's the whole game. Every clause that matters is built around that one idea.

And it's exactly why your insurance company cares about these. They're not collecting paperwork for fun. They know a contractor with strong subcontractor agreements has shoved a pile of risk onto other people's policies, and a contractor without them is unknowingly absorbing all of it.

​What it actually costs you to skip it
Let me walk through what happens when the agreement isn't there or isn't strong enough, because the cost is bigger and stranger than most people expect.

Start with the injured worker. Your sub's employee gets hurt on your site. You'd assume that's the sub's workers' comp problem, and the injury itself usually is. But hurt workers and their attorneys don't stop at comp. They look around for somebody else to sue, and there you are, the contractor who hired them. That's called an action over claim, and it lands on your general liability policy. If your agreement named you as an additional insured on the sub's policy and required the right coverage, that claim flows back to the sub's insurance company. If it didn't, your policy eats it, your loss runs take the hit, and you feel it at your next renewal. And a serious injury claim doesn't stay small. One sub's hurt employee can turn into a seven figure problem with your name on it.

Now the work that fails later. This is the one contractors forget about completely. Your grading sub finishes, you pay them, the job closes, everybody moves on. Two years later the pad settles, the building cracks, and the owner sues. By then that sub might be out of business, might have dropped their coverage, might be impossible to track down. If your agreement required them to carry completed operations coverage and keep you as an additional insured for as long as you can still be sued, you've got something real to fall back on. If it didn't, you're defending a claim for somebody else's bad compaction on your own dime, years after you forgot the job existed.

Then there's the cost you never see coming, the one that shows up at audit. When you can't produce proof that a sub carried their own insurance, your insurance company treats what you paid that sub as your payroll. Not just their labor, the whole check. The same missing paperwork that exposes you in a lawsuit also shows up as a bigger bill at audit time. It's one hole, costing you twice.

​What a strong agreement actually has in it
You don't need to become an insurance lawyer to know whether your agreement is pulling its weight. A handful of things do most of the work, and you can check for them in about five minutes.

• Get it in writing, signed before they start. A handshake transfers nothing. The cleanest setup is a master agreement you sign once with each sub, then a short work order for each project, so you're not papering a brand new contract every time.
• A hold harmless and indemnification clause. This is the sub agreeing to stand behind their own work and cover the costs when their work causes a claim. You want it written as broadly as the law in your state allows, so it actually holds up when you lean on it.
• Additional insured status, ongoing and completed operations. This is the one that does the heavy lifting. The sub names you on their policy, both while the work is happening and after the job wraps, and it needs to be primary and non-contributory, which just means their policy pays first and yours doesn't get pulled in to share the bill. This is what actually moves a claim off your policy and onto theirs.
• Real insurance minimums, with proof. At a minimum, general liability at $1 million per occurrence and $2 million aggregate, carried with a financially solid insurance company, and a certificate of insurance in your hand before they set foot on your site. Then a fresh certificate every project, because a sub who's covered today can drop their policy before the next job.
• A waiver of subrogation. This keeps the sub's insurance company from paying a claim and then turning around to collect from you. Without it, you can win the fight and still get a bill.
• No employee-injury exclusion hiding in their policy. Some policies carve out injuries to the sub's own employees, and that carve-out is the exact gap that lets an action over claim back onto your plate. You don't have to read the policy language yourself. Just have your broker confirm that hole isn't there.
  
  

If you check nothing else, check three: a hold harmless clause, general liability limits of at least $1 million and $2 million, and a waiver of subrogation. Those are the ones we see missing most often, and they tend to be missing on exactly the jobs where they'd have mattered most.

​Something beats nothing, and better beats good enough
Here's where I want to keep you from going sideways. You might read all of that and decide your agreement has to be a fortress, twelve pages of airtight language, before it's worth anything. That's not true, and that belief is exactly what keeps contractors doing nothing.

A one page agreement that names indemnification, requires the sub to add you as an additional insured, and demands a certificate of insurance before they start is worth far more than the handshake you're running on now. It won't be perfect. It'll still catch most of what a perfect one catches. Get it signed and you've already moved most of the risk off your books.

Then make it better over time. Add the completed operations language. Tighten the insurance minimums. Move to a master agreement so it's easier to use. You don't have to get there in one jump. The contractors who win at this aren't the ones with the most elaborate contracts. They're the ones who actually have something signed, every sub, every job, and keep sharpening it. Don't let the perfect version stop you from putting the good version in place today.

Where to start
The move here is a working session, not a fire drill. Three things to do before your next job:

1. Get something signed with every sub before they start. If you don't have an agreement at all, grab a simple one and use it, because a basic agreement beats an empty folder every time.
2. Have your broker read your agreement against your actual policy and your real operation and point out the gaps. A good broker can look at the two side by side and tell you within a few minutes whether your risk is landing where it should.
3. Collect a current certificate of insurance from every sub on every job, and confirm you're named as an additional insured for completed operations, not just ongoing work.

That piece of paper you've been treating like a formality is one of the cheapest, most powerful parts of your whole insurance program. It doesn't cost you a premium. It just decides, ahead of time, whose problem the next accident becomes. Make sure it's deciding in your favor.

By Cole Rarrick
Founder, President | Mountain View Insurance Services

There's a number making the rounds in the insurance world right now, and most contractors I talk to have never heard it. The median jury verdict in nuclear verdict cases is $51 million.

​Not the biggest. Not an outlier. The median. Half of those verdicts were higher than that.

If your reaction is, "okay, but that's a problem for Fortune 500 companies and pharmaceutical giants, not for me," I get it. That used to be true. It isn't anymore. And once you see how this is playing out, you'll understand why your premiums have moved the way they have, why your umbrella options keep shrinking, and why your broker should be having a very different conversation with you than they were five years ago.

​What a nuclear verdict actually is
The term "nuclear verdict" gets thrown around a lot, so let's pin it down. A nuclear verdict is any single jury award of $10 million or more. A "thermonuclear" verdict is one over $100 million. The names are dramatic on purpose because the numbers are dramatic.

Here's the picture from 2024, the most recent year of complete data. American juries handed down 135 nuclear verdicts totaling $31.3 billion. That's a 116% jump from the year before. Thermonuclear verdicts hit 49 cases, up 81%. Five verdicts crossed the billion dollar line. These awards landed in 34 states and 77 different courts. This isn't concentrated in one bad-actor jurisdiction. And the early data from 2025 and the verdicts coming through in 2026 confirm the trend hasn't slowed.

Why this is happening
There's no single reason. There are three reasons working together, and the combination is what makes this trend so hard to slow down.

The first is what people in the industry call social inflation. Strip away the jargon and what it means is this: juries today are more willing to punish businesses, and the dollar figures they assign feel small to them because they've been desensitized to large numbers. CEO compensation packages, athlete contracts, tech valuations, government spending in the trillions. By the time a juror sits down to decide what an injured plaintiff deserves, $50 million doesn't sound like as much as it would have twenty years ago.

The second is a legal strategy called the reptile theory. It came out of a 2009 book by two plaintiff attorneys, and it has fundamentally changed how cases against contractors get tried. Rather than focusing on what happened in the specific incident, plaintiff lawyers reframe the case as a question about whether your company is a threat to the community. They use buzzwords like "safety," "training," "community," and "accountability" to get jurors thinking less about the facts and more about their own families' safety. When a juror sees the verdict as a way to protect their kids, the numbers stop making sense in any traditional way.

The third is third-party litigation funding. This is the one most contractors have never heard of. Hedge funds and private equity firms now invest in lawsuits the way they invest in stocks. They put up the money for plaintiff attorneys to pursue cases, and in return they take a cut of the settlement or verdict. This is a $17 billion industry globally, with more than half of it deployed in the US. It means plaintiff lawyers can afford to pursue bigger cases, hire better experts, drag litigation out longer, and reject reasonable settlement offers that the plaintiff alone would have taken. There's no requirement to disclose this funding in most jurisdictions, so you often don't even know who you're really fighting.
Put those three forces together and you have an environment where a single bad incident can produce a verdict that exceeds anything you would have expected just a few years ago.

​Where your real exposure actually lives
Here is the part most contractors get wrong from the start.

If you're a concrete sidewalk contractor, your first instinct is probably, "what could I possibly do that ends up in a $10 million verdict? I'm pouring sidewalks." Fair question. The answer isn't the concrete. The answer is your trucks.

Every contractor I work with, no matter the trade, has the same fundamental exposure: vehicles on the road. Dump trucks. Pickup trucks. Crew vans. Flatbeds hauling equipment. Trailers loaded with mini excavators, skid steers, bulldozers, materials. A sidewalk contractor, a paving contractor, an excavator, a utility contractor, an irrigation outfit. They all have rigs running on the highway and on local roads every single day, sometimes ten or twelve at a time.

That is where the nuclear verdict exposure actually lives. It does not matter that your day-to-day work is pouring slabs or trenching for fiber. The moment one of your vehicles is on the road, you are carrying the same auto liability risk as a pure trucking company. Roughly one in four auto accident verdicts of $10 million or more involve a commercial truck of some kind, and "commercial truck" includes a lot more than long-haul carriers.

Let me make this concrete with what happened in Utah in July 2024. An improperly secured 31,000-pound bulldozer slid off the flatbed of a tow truck while the driver was negotiating a curve in Ogden Canyon. The bulldozer landed on top of an oncoming family vehicle, sheared off the top of the car, killed a father and his 16-year-old daughter, and seriously injured his other daughter. The civil exposure, with two deaths, a survivor with serious injuries, and the surviving family members as plaintiffs, is exactly the kind of case that produces a nuclear verdict.

Now picture the same scenario with a contractor's flatbed. A skid steer that was chained at three points instead of four. A mini excavator that shifted because the operator was in a hurry to make the next job. A pallet of materials that wasn't strapped tight. The mechanism doesn't care whose name is on the door of the truck.

This is the universal point that contractors need to internalize. Your trade defines what your workday looks like. Your fleet defines your worst-case verdict exposure. And every dirt-trade contractor in the country has fleet exposure, whether they think of themselves as "in trucking" or not.

The part that should really get your attention
Here's what most contractors miss when they read about nuclear verdicts. The cases that should worry you the most aren't the fatality cases. They're the survival cases.

Modern emergency medicine saves people who would have died twenty years ago. That is genuinely good news in every way except one. A surviving traumatic brain injury patient often needs lifetime nursing care, modified housing, ongoing therapy, plus thirty or forty years of lost earnings. A quadriplegic patient at age 27 needs roughly $20 million in medical care over the rest of their life, before you ever get to pain and suffering or lost income.

This is why a single bodily injury case can credibly produce $30 to $50 million in economic damages alone. No punitive damages required. No exotic legal theory needed. The life care plan does the work. A 35 year old who walks away from your accident with serious cognitive impairment has four decades of need ahead, and the math is straightforward.

Wrongful death cases produce big verdicts too. But a survival case with a major life care plan attached is, paradoxically, often the bigger financial exposure. The plaintiff is in the courtroom, in a wheelchair, with their family next to them, and the jury is looking at the person they are about to take care of for the rest of their life.

The construction-side exposure
Beyond the road, you have the work itself. Crews in active lanes with the traveling public a few feet away. Excavation near pedestrians and homes. Heavy equipment running in environments where one mistake puts someone in a wheelchair. A New York construction worker injured when a forklift struck a platform he was standing on resulted in a $102 million verdict. An improperly paved road in Kentucky led to $74 million. A Texas crane crash resulted in $860 million.

You also have completed operations exposure. A grading job from three years ago that drains funny. A concrete pad that cracks because a sub didn't compact the base correctly. A utility install that fails and floods a building. These claims don't always show up immediately, but when they do, the same dynamics apply.

The reptile theory map for a contractor case is almost always the same. The plaintiff lawyer won't focus on the accident itself. They'll focus on your safety program, your driver hiring practices, your training records, your subcontractor management, your prior OSHA history, and your documentation. The question they want in front of the jury isn't "what happened" but "does this company care about safety, or do they cut corners to make money?" If the answer your documents tell is anything less than airtight, the verdict can go anywhere.

What you can actually do about this
This is the part where most articles get preachy. I'm going to skip that and give you the things that actually move the needle.

Build a documentation habit, not a documentation file. A binder full of policies that nobody on your crew has ever read is worse than useless in litigation. What you want is a culture where the foreman runs a five minute safety talk every morning, somebody signs off, and that gets uploaded to your system. Daily, not weekly, not "when we remember." Twelve months of that beats any 200 page safety manual in front of a jury.

Pull MVRs on your drivers more than once a year. The standard practice of checking motor vehicle records at renewal is how contractors find out about a driver's DUI eighteen months after it happened, two months after that driver caused an accident. Continuous MVR monitoring services are cheap. The negligent entrustment argument, where a plaintiff attorney shows you should have known your driver was unsafe, is one of the most reliable paths to a nuclear verdict in the auto space.

Put telematics and dashcams in your fleet. The data does two things. It lets you coach drivers before something goes wrong. And when an incident does happen, the footage often shows what really occurred, which prevents the reptile narrative from filling in the blanks. Without it, you're arguing your driver's word against a plaintiff lawyer's story.

Build a load securement protocol and audit it. If you haul equipment or materials on a regular basis, the way that load gets chained, strapped, and verified before the truck leaves the yard is one of the highest-leverage things you do all week. The Ogden Canyon case turned on inadequate chains. A protocol that takes ten extra minutes per load and gets signed off on can be the difference between a routine trip and a courtroom.

Tighten up your subcontractor management. The same dynamics that produce nuclear verdicts against you can produce them against your subs. If your indemnification language is sloppy or your additional insured endorsements are missing, you can end up on the hook for someone else's catastrophic claim. COIs collected, contracts reviewed, the right endorsements in place. Not glamorous, but one of the most underrated forms of asset protection a contractor has.

Take incidents seriously from minute one. A minor injury on Tuesday can become a nuclear verdict three years from Tuesday if it gets mishandled in the first 48 hours. The phone calls you make, the photos you take, the statements you collect, the way you treat the injured person. All of it gets reviewed later. Build a protocol with your broker and your attorney now, before you need it.

​The umbrella conversation everybody is having wrong
Here's where the conversation usually goes sideways. A contractor doing $4 million in revenue hears "the median nuclear verdict is $51 million" and reaches one of two conclusions. Either they decide they need a $50 million umbrella, which isn't realistic for their size or their budget. Or they decide the whole conversation is absurd and stay at $1 million umbrella and call it a day. Both are wrong answers.

Let me lay out how to actually think about this.

Your revenue doesn't determine your verdict exposure. Your operations do. A four-person crew working in an active lane has the same fatal-accident potential as a forty-person crew working that same lane. A small contractor's dump truck on the highway has the same potential to hurt someone as a big contractor's dump truck on the highway. The injured plaintiff's life care plan does not care that your company is smaller. The verdict against your business will not be discounted because of your size.

Trying to buy enough limit to cover the worst possible verdict isn't the goal. That number is unknowable, and the carriers won't write it for a smaller contractor anyway. The goal is to think clearly about three things.

First, what's a realistic worst case loss scenario for your specific operation? For most commercial dirt trade contractors with crews on the road and in active work zones, a verdict somewhere in the $5 million to $15 million range is realistic, not outlandish. That should be where your tower comfortably reaches.

Second, what does the next layer of protection actually cost? Most contractors are stunned when they see the pricing difference between a $5 million umbrella and a $10 million umbrella. The marginal premium is often a fraction of what people assume, because excess layers price differently than primary. The cost of moving from $10 million to $25 million is larger but still typically smaller than the gap it closes. The cost curve flattens fast in the middle range. This is exactly where most contractors are underbuying.

Third, what does it actually take to absorb a verdict and keep your business standing? A judgment that exceeds your limits doesn't just settle. It threatens the company you've built. Even when carriers and excess layers cover the bulk, you can end up with a business that becomes uninsurable for the next renewal cycle, which is its own form of going out of business. The right umbrella limit isn't about chasing an abstract number. It's about giving the business you've built a chance to absorb a bad day and keep operating.

For a $4 million revenue commercial contractor, the conversation isn't "you need $50 million." It might be "$1 million primary, $10 million in umbrella, and let's revisit when you grow." For a $15 million contractor doing more public work and more fleet operations, it might be "$1 million primary, $20 to 25 million layered above it." For a contractor doing tribal land work, DOT projects, or working near pedestrians regularly, the number moves up again.

The point isn't a specific dollar figure. The point is that the limit conversation needs to be based on what you actually do, not what you sell. And the contractor staying at $1 million in umbrella because "we're small" is making a decision based on the wrong frame entirely. That is the real conversation to have.

​5 conversations to have with your broker
If you want to make sure you've thought through this, here are the five things to walk through with your broker this quarter. Not as an interrogation, as a working session.

1. Where are my real exposure points across auto liability, general liability, completed operations, and contractual liability, and what's the realistic worst case loss scenario for each?
2. What does my current umbrella tower actually cover relative to that realistic worst case, and what does the next layer of protection cost compared to the gap it closes?
3. What loss control and risk management resources does my current carrier provide, and am I taking full advantage of them?
4. How does my safety documentation, training records, MVR monitoring practice, load securement protocol, and incident response plan look from an underwriter's perspective, and what would tighten that picture?
5. If a serious incident happened tomorrow, what's the play in the first 48 hours, and do I have the right people on speed dial?

If you walk through these five questions and come out the other side with clear answers and a real plan, you're ahead of probably 80% of contractors in your space. That's the goal here. Not to scare you. Not to sell you on bigger limits for the sake of bigger limits. To make sure that when the trend lines keep moving the way they have been, your business isn't the one that gets caught flat-footed.

The contractors who get through this environment intact will be the ones who treated nuclear verdicts as a real, current threat and built their operation and their insurance program accordingly. The ones who treat it as somebody else's problem will find out the hard way that it wasn't.

By Cole Rarrick Founder, President | Mountain View Insurance Services

Most contractors assume their premium is driven by payroll, revenue, and claims history. Those things matter. But there is a fourth factor that almost nobody thinks about, and it is sitting right there on your website for anyone to see.
Your photos and service descriptions are underwriting documents. Your carrier treats them that way even if you don't.

What underwriters actually do

When your policy comes up for renewal, or when a new carrier quotes your account, someone reviews your business. They look at your website. They check your social media. They read your project descriptions, your service pages, your "what we do" page. If you have photos of a crew running an excavator next to an open trench, a social media post about a complex underground utility install, a before-and-after of a major grading project, or photos from a solar farm site prep job you did years ago, they see all of it.

Underwriters are not admiring your work. They are classifying your risk.
​
Every trade has a classification code, and those codes carry different rates. Concrete sidewalk is priced differently than tract development slabs. Grading a parking lot reads differently than grading around a live utility corridor. If your website suggests you're doing higher-complexity work, you'll be priced accordingly, whether or not that job represents your typical scope today.

The mismatch that creates problems

Here is a real scenario. You're a concrete contractor. Seven years ago you took on a tribal land project. It went well, you're proud of it, and the writeup is still on your website. What you may not realize is that tribal land work triggers a specific set of underwriter questions around jurisdiction, liability, and bonding requirements. They're not going to automatically call and ask for context. They're going to price for the exposure they see.

Maybe that's fine with you. Maybe that project accurately represents where you want to take the business. But if it doesn't reflect your actual current scope, you're being underwritten on work that's no longer part of your story, and underwriters are too busy to investigate.

The same thing happens with specialty work across the dirt trades. One photo of a crew working inside a confined space structure. A "Services" page including deep excavation. A project writeup that casually mentions blasting or dewatering. A photo of your crew working in an active lane with flaggers visible tells an underwriter there's a traffic control exposure, even if that was one job on one road three summers ago. Each of those is a data point that an underwriter uses to build a picture of who you are as a risk.

The other side of this coin

It is worth saying clearly: there is nothing wrong with doing complex, specialized, impressive work. If you run crews that can handle the jobs most contractors turn down, that is a competitive advantage worth marketing. The goal here isn't to tell you to hide your best work.

The goal is to make sure your broker knows your story before the underwriter starts writing their own version of it.

Underwriters deal with incomplete information all day. They make decisions based on what they can see, and they are appropriately skeptical because they've seen people misrepresent their operations plenty of times. If a broker presents a submission and proactively explains, "here's a tribal land job from seven years ago, that was outside their normal scope, here's what they actually run day to day," that lands very differently than an underwriter spotting it themselves and wondering what else they're not being told.

Getting ahead of the narrative is everything. Trying to change an underwriter's perception after they've already formed it is like turning the Titanic. It's not impossible, but it's slow, it's hard, and there's a real chance they stay suspicious regardless of what you say.

Before your next renewal
You don't need to audit your website and scrub it clean. That's not the point. Some of you should leave every photo exactly where it is, because the work you've done tells the right story for where your business is headed.

What you do need is a broker who knows the full picture before the submission goes out. Walk through your website with them. Point out the jobs that don't reflect your current mix. Explain the context behind the work that looks unusual. Let them build the narrative that matches reality.

A good broker can tell a great story about a complicated operation. But they can only do that if you give them the information before it becomes a question.

By Cole Rarrick President, Mountain View Insurance Services
​
You did the work. You paid your premiums all year. And now your carrier is sending you a bill for thousands of dollars you didn't budget for. Welcome to the audit.

Most contractors know audits exist in theory. Few are prepared for what actually shows up. Here's what's catching people off guard and what you can do about it before the auditor calls.

Your subcontractors can become your problem
When you hire subs, your carrier wants to know how much you paid them. That's because if a sub doesn't carry their own insurance, your policy may end up covering them by default.

Here's where it gets expensive. If you don't have a certificate of insurance on file for a sub, the carrier will typically pick up their full payment as an auditable exposure. Not just labor. Labor plus materials, combined, as one number. That landscaping sub you paid $40,000 to? If you can't produce their COI, that $40,000 gets counted as your exposure and you get charged on all of it.

Some carriers will let you strip out materials if you have detailed records separating labor from materials. Most contractors don't keep it that clean. One line item on an invoice is the norm, and one line item means the whole amount is fair game.

The fix is straightforward: collect a certificate of insurance from every sub before they set foot on your job. Not once a year in January. Every project, every time. A sub can have active insurance in January and get canceled for non-payment by June. The COI you collected six months ago doesn't protect you today.

Best practice is to check every project. If that feels like too much process to build yourself, ask your broker to help you set up a simple system. It doesn't have to be complicated, and it's far less painful than paying an audit bill for someone else's work.

The double whammy you don't see coming
Here is the part that frustrates contractors most. An audit isn't just about last year.

Say your audit closes and the carrier determines you owe an additional $8,000 because your payroll came in higher than estimated. You write the check and assume you're done. You're not. The carrier now has real numbers on your operation, and they update your current policy to reflect them. If you have nine months left on your policy period, your remaining payments increase to spread the updated payroll across those months.

You pay for the past and the future adjusts at the same time. That's the double whammy. Most contractors only brace for one hit and get surprised by the second.

If you're on ACH, pay extra attention. The carrier isn't going to send a separate invoice and wait for you to respond. They'll automatically deduct the audit balance and the new payment amount directly from your account. If your cash flow is tight, that can catch you off guard fast.
​
When you add new trades mid-year
Your policy is built around what you told the carrier you do. If that changes, your premium should change with it, and the audit is how the carrier finds out it didn't.

A good example is a landscape contractor who starts picking up concrete flatwork, masonry, or paving. Those aren't the same risk classification as general landscaping. If you're running crews doing meaningful amounts of that work and it wasn't on your original submission, the auditor will find it. The rate for the new trade applies, retroactively, to the work you already did.

This isn't about hiding anything. It's about making sure your broker knows your scope before the underwriter figures it out themselves. The conversation is much easier when you're the one bringing it up.

One thing the audit doesn't touch: your umbrella
This one actually cuts both ways, and it's worth knowing. Your umbrella policy generally doesn't participate in the audit process. If your payroll went up and you owe money on your general liability or workers' comp, the umbrella doesn't add to that bill. But if your payroll went down and you're expecting a refund, the umbrella won't contribute one either. It sits outside the audit entirely.

Switching carriers doesn't erase the audit
A lot of contractors switch insurance companies because they found a better price. That's a legitimate reason to move. But one thing doesn't go away when you leave: the final audit from your old carrier.

It doesn't matter whether you left mid-term or at renewal. Your previous carrier will still conduct a final audit for the period you were with them. That bill can show up months after you've moved on, and if you weren't expecting it, it hits like a surprise you thought you'd avoided.

There's another risk with switching that's easy to miss. A new carrier might classify your trades in a way that looks favorable at quote time. You assume you're saving money, you bind the policy, and the year goes on. Then the audit happens. If your operation involves gray-area work, masonry that could read as concrete, concrete that could read as flatwork, the new carrier's auditor may land on a different classification than what you were originally quoted. You saved money on paper and gave some of it back at audit time.

None of this means switching carriers is a bad idea. It means you should ask your broker exactly how the new carrier is going to classify your work before you bind, not after.

If a large audit bill shows up
One last thing worth knowing: you don't always have to pay a large audit balance in one shot. Most carriers will work with you on stretching the payment out, typically at least three months, sometimes longer. It requires your broker to make the ask, but it's negotiable more often than people realize. If you're staring at a number that doesn't fit your cash flow right now, call your broker before you assume you have no options.
​
Questions to bring to your broker before your next audit

1. Ask your broker to help you build a simple system for tracking COIs from every sub you use. It doesn't have to be complicated, and having it in place before the audit is infinitely better than scrambling after.
2. Keep your broker informed any time you add new trades or take on work outside your normal scope. They need to know before the auditor does.
3. If you're considering switching carriers, ask your broker how the new carrier will classify your work, and make sure you understand any audit risks before you bind.
4. If you still have an outstanding audit due from a previous carrier, loop your broker in. They may be able to help negotiate the payment terms.

The audit is not the enemy. The surprise is. Spend thirty minutes with your broker going through these before the auditor does it for you.

Your Truck Got Totaled. Now What About the $20,000 in Tools That Were Inside?
Cole Rarrick | Founder, President. Mountain View Insurance Services
​
This is the kind of thing nobody thinks about until it happens, and by then it is too late to fix.

Picture it. You are standing in a parking lot, staring at where your work truck used to be, trying to figure out how you are going to finish Monday's job. You are already mentally past the truck. You know you have auto insurance to handle the vehicle, even if the depreciated payout makes you grumble. What stops you cold is the next conversation, the one where you find out your tools are a completely separate problem.

So let's talk about that problem before it becomes yours.

The auto policy covers the truck, not what's in it

Your commercial auto policy is built to cover the vehicle. The metal, the engine, the seats. If it gets stolen or totaled, the carrier pays out the actual cash value, which is almost always less than you think it should be because of depreciation. That part stings, but most business owners at least understand the concept.

What surprises people is what happens to everything that was inside. The table saw, the impact drivers, the laser level, the ladders strapped to the rack, the bins of bits and blades and fasteners. None of that is part of the auto claim. The auto policy does not care about your tools. It covers the truck.

And before you ask, no, your property policy will not pick up the slack either. A standard commercial property policy generally covers things at your location. Once your tools leave the building and head out into the world, they fall into a coverage gap.

​Enter the inland marine policy

The fix lives inside a policy called inland marine. The name is confusing because it has nothing to do with boats or oceans. Inland marine is the bucket of coverage built specifically for property that moves around. Tools, equipment, materials in transit, stuff at a jobsite, stuff in your vehicle. That is what inland marine is designed to handle.

If you own tools and you take them anywhere other than your shop, you need an inland marine policy. Full stop. Some people call it a tools and equipment policy or a contractor's equipment policy. Same idea.

​The second surprise: per item limits

Here is where the next gut punch lives. You think you have a $20,000 inland marine policy, and you assume that means $20,000 of coverage when something goes wrong. Then a claim happens, and the carrier says, sure, here is $500 per tool.

That is not a typo. A lot of these policies have a per item sublimit. The total limit might be $20,000, but if any single tool is capped at $500, your $1,400 track saw just became a $500 track saw. Your $1,800 rotary hammer just became a $500 rotary hammer. You see where this is going.

The fix is simple. You raise the per item limit, or you schedule the expensive tools individually so they are covered for their actual value. For high dollar items, scheduling is the way to go. The carrier knows exactly what the tool is, what it is worth, and you do not have to argue about it later.

Here is the best part. Fixing this is cheap and easy. Bumping a per item limit or scheduling a few pricey tools usually costs almost nothing relative to what you would lose in a claim. It is one of the easiest wins in a commercial insurance program, and it just takes a broker who is paying attention and not passing along the default quote from the insurance company.

​5 questions to take to your broker

If you want to make sure this is buttoned up, here are the questions to ask. Copy these, send them in an
email, and ask for written answers.

1. Do I have an inland marine policy in place, and what is the total limit?
2. What is the per item sublimit, and which of my tools would get capped under it?
3. Which of my higher value tools should be scheduled individually, and at what values?
4. Is coverage on a replacement cost basis or actual cash value?
5. Does the policy cover my tools everywhere they go, including in the vehicle, at the jobsite, and
in transit?

If your broker cannot answer these quickly and clearly, that is information too.

The truck getting totaled is bad enough. Losing the contents on top of that and then finding out your policy only covers a fraction of what you assumed, is the kind of avoidable pain that ends careers. Spend twenty minutes with your broker this month. Future you will be grateful.

Welcome to our new insurance agency blog!
 
This is our very first post. We're not quite sure what we're going to write about here, but the plan is to create helpful content for customers and prospective clients about information that is relevant to you.
 
We hope you'll come to view this as a top resource for keeping your family and your finances safe.
 
Here are a few of the topics we may be writing about:

• Answers to clients' frequently asked questions.
• Helpful information about insurance shopping.
• Safety and Health Tips and Ideas.
• Local Community Information.

 
Stay Tuned!