Insurance Issues for Renewable Energy Installers

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Insurance Issues for Renewable Energy Installers

• Chris Sinton - CW Sinton Consulting, Middlebury,
  Vermont
• Joel Gordes NYSEIA
• Roy Butler Four Winds Renewable Energy
• Kathy Weinheimer Independent Insurance Agents
  and Brokers of New York, Inc.

Project funded by the NYS Energy Research and
Development Authority
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Outline

• Overview of insurance requirements
• Problems faced by installers
• Summary of installer survey
• Next steps
• Discussion

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Insurance Types

• Liability
• Workers Compensation
• Property and Vehicle

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Liability Insurance

• Covers your liability for property or bodily
  injury caused during operation or from completed
  work
• Blanket additional insured added to the policy
  to cover customers and others, such as NYSERDA

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Liability Insurance

• Obtained from private carrier through insurance
  agent
• Carrier uses classification code to help
  determine rate
• Many (most?) carriers do not have a solar
  installer classification
• ISO (www.iso.com) has code 99080 Solar Energy
  Contractors

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NYS Workers Comp

• The NYS Workers Compensation Law requires that
  every covered employer have workers compensation
  coverage for all employees (including part-time
  employees and employed family members).
• Employees are entitled to workers compensation
  benefits for job-related injuries or illnesses,
  without regard to fault as a cause of the injury.
  In turn, if a workers compensation policy is in
  place, employees cannot sue employers for a
  work-related injury or illness in most cases.

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NYS Workers Comp

• Workers Comp coverage can be obtained by
• Private insurance carrier
• The State Insurance Fund or
• A Self-insured trust need permission from
  Workers Compensation Board

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NYS Workers Comp

• Classification codes are determined by state,
  which may follow classification set by NCCI
  (www.ncci.com).
• Rates are based on percentage of employee payroll
• Single owners without employees do not need
  coverage

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NYS Labor Law Sections 240 and 241

• Safe Place to Work Law
• Absolute liability holds contractors solely
  responsible for all accidents that occur on a
  site, regardless of fault
• A problem for all contractors, resulting in
  higher liability rates for NYS employers

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NYSERDA Requirements

• PON 716 and 792
• NYSERDA and the State of New York as additional
  insured refer to PONs in policy
• Commercial general liability minimum 1 million
  each personal injury and property damage
• Commercial auto coverage of 500,000 personal
  injury per person, 1,000,000 personal injury per
  accident, and 500,000 property damage per
  accident.

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Problems?

• Liability coverage difficult or impossible to
  find
• Premiums are too high can add 0.10 per
  installed watt PV
• Lack of understanding by the insurance industry
  height issue
• Nationwide problem see Home Power Magazine
  issue 103 Oct-Nov 2004

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Survey of Installers

• Part of a larger survey contracted by NYSERDA
• Of a total of 68 installers invited to
  participate by email, 34 responded
• Most NYS, but some from MA and VT

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How are you classified for insurance
purposes? __solar installer __electrician __
other (Please describe ____________________)
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Are you or one or your employees or co-workers a
licensed electrician? Yes 12 No 19 Did not
respond 3 Do you ever hire an electrician as a
subcontractor for PV projects? Yes 21 No 9 Did
not respond 4
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Please provide your annual premiums for both
Liability and Workers Compensation insurance.

• fifteen installers responded, of which four did
  not report workers compensation
• The total annual premium amounts range from
  2,200 to 50,000 with an average of 10,600 and
  a median value of 7,000
• Normalized per employee range of 580 to 6,000
  - average is 3,208 (2,800 excluding the highest
  value) and the median is 2,917

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Have you ever experienced any of the following
(relating to insurance)?
Auto coverage is too high a common problem
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Next Steps

• Discussion with insurance carriers
• Guide book describing the activities of the
  installer
• Value of certification and training - NABCEP,
  OSHA, programs, manufacturers, etc
• Business opportunity for the carriers
• Group coverage through trade group such as SEIA
  and NABCEP

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Contacts

• Chris Sinton sinton_at_verizon.net 802-989-8287
• Alan Virgil South Bay Risk Management
  alanvirgil_at_southbayriskmanagement.com
  310-791-9855