Q&A: Does your solar business have the insurance coverage it needs?
With insurance (or the destruction of it) in the news so much lately, we figured we’d reach out to Christy Howley, solar program manager at ProSight Specialty Insurance, for some solar installation insurance advice. Recently, ProSight aligned with the North American Board of Certified Energy Practitioners (NABCEP) and became the group’s preferred insurance provider. As a result, companies with NABCEP certification or certified employees may be eligible for preferred rating.
Here’s how you can avoid being left high and dry by your solar business insurance.
Solar Builder: What is typically lacking in more general insurance programs that solar contractors get lumped into?
Christy Howley: Some policies may lack proper errors and omissions (E&O) coverage. This goes beyond general liability and can help protect against subjective claims like negligence, fair dealing and inaccurate advice.
Another coverage that solar contractors should look for is employment practices liability insurance (EPLI). This will help protect a business from claims that include: wrongful termination, discrimination, sexual harassment and retaliation.
At ProSight, we are tapped into the solar industry and that allows us to create specific coverages designed to solve business obstacles that are unique to the solar industry. Examples are operational systems coverage and obstruction of premise supplemental (OOPS) coverage. The former provides liability coverage for operational solar systems. The latter, OOPS coverage, helps protect businesses from paying out of pocket to compensate clients when an installation accident leaves living quarters uninhabitable. Both coverages can provide a contractor with peace of mind while working on projects.
SB: What coverages in particular should solar contractors be seeking out? And what scenarios are covered by these programs?
Howley: What’s lacking in a policy differs in every situation. Insurance policies are not one-size-fits-all, so business owners should make sure they are very explicit with the capabilities and direction of a company. This will allow the agent to find a policy that best fits the company’s needs.
In the solar and energy efficiency field, there are so many different business models that you will rarely find two companies that are doing the exact same thing. So, where a certain coverage might be important to a business that procures and sells solar systems, that same coverage might not be necessary for a company that solely installs.
Contractors should also evaluate their policy for any problematic exclusions in their policies that may be critical to their business model. If they are not careful, they could undertake a job that is not covered by their insurance. If an incident were to occur, the company would be liable for the damages.
SB: Is there anything you see as over-coverage that should be avoided to save costs?
Howley: Insurance is peace of mind. If specific coverages give a solar practitioner the comfort to do business, it’s well worth the price of the premium. And, it’s not only the individual company that benefits. The entire solar industry benefits when businesses are properly insured and conducting installations safely. When an insurance carrier has to pay a large loss, it impacts the policies and premiums that are subsequently written. So, if each solar provider gets properly covered and goes the extra mile to install properly and keep their employees safe, it will help maintain cost stability across the industry.
SB: Are those coverages available across the country or just in certain solar-heavy regions?
Howley: ProSight has the ability to provide our exclusive coverages nationwide. Whether your company operates in a solar-heavy region like New York City or you are one of the first solar businesses in your area, we can give you access to Operational System coverage, OOPS coverage and much more.
SB: Does size and scope of a business matter? Like, what if someone wants to get into solar + storage, or maybe start doing small commercial instead of just residential?
Howley: The size and scope matters most when the business moves into arenas that the current insurance policy excludes or doesn’t currently contemplate. If a company does commercial but wants to get into residential, even if it’s only a small percentage of the business, it is crucial to be sure there isn’t a residential exclusion on the policy.
The same goes for solar + storage; if a policy is set up for coverage on installations and the business wants to start providing storage options to their customers, be sure to re-examine the insurance policy before taking the steps into expansion. If a customer files a claim against the company for something that isn’t covered under the current policy, the business and the owner could be on the hook for all the damages.
SB: What’s an example of how a specific coverage saved a customer?
Howley: One of our insureds utilized our worker’s compensation coverage for an unfortunate incident that happened during an installation. In a total fluke situation, a plank gave out while a worker was walking on it. The worker fell about 30 ft and was severely injured. With ProSight’s WC, the worker’s injuries and lost time at work were covered for as long as the injury lasted. We want our insureds and their employees to go home safely each night, but if an accident happens, our policy covers medical expenses and time missed from work.
SB: Is there anything a solar contractor can do personally or in their business to further lower costs on premiums?
Howley: The main thing solar contractors can do is treat their people well. Make sure they get proper training, allow them to attend industry conferences, get them the most updated equipment and do whatever it takes to prepare employees to be the best at their jobs.
Industry certifications can also help offset long-term costs as well. The education received while undergoing and maintaining the certifications from NABCEP can signal to insurers and customers alike that your business is compliant with the highest level of certification and scrutiny.
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