5 Types of Insurance for Joisted Masonry

Every Masonry Business should have consider the follow types of insurance

What is joisted masonry construction in insurance? Joisted Masonry is a specific type of niche within the construction industry that deals with the exterior walls of materials including adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials. These materials have combustible floor and roof that insurance carriers assign a specific code that indicates the ranking of the fire restrictiveness of the material. The rankings are determined by Insurance Services Office, Inc. (ISO) on a scale of 1-6. Because masonry businesses have elevated risks, insurance carriers charge more for several different types of commercial insurance. Because of this cost, business owners in the Joisted Masonry Niche need to make sure they have precisely the right mix of insurance policies for their unique business. Here are five types of insurance all business owners operating in this should consider.

General Liability

A General Liability Insurance Policy covers bodily injury and property damage to outside third parties. These damages include customer injuries, customer property damage, and lawsuits related to these claims. The GL Policy will pay expenses related to third-party injuries and property damage up to the limits of the policy. This type of insurance is frequently required for leases and other contracts.

Workers Compensation

Workers’ compensation insurance helps protect masons, contractors, carpenters, roofers, electricians, deck builders, siding installers, and other construction workers. This specific type of insurance covers construction businesses by providing medical, disability, survivor, burial, and rehabilitation benefits to employees who are hurt on the job or die in a work-related accident.

Commercial Auto

Commercial Automobile Insurance is different from a personal auto policy.
Commercial auto policies tend to have higher coverage limits compared to personal policies, because business vehicles need more protection in case of accidents. A Commercial Auto Policy provides coverage for vehicles used by a business and covers damage to the businesses vehicle, driver injury, injury to outside third parties, and damage to other people’s property. An additional Hired and Non-Owned Auto Policy can be added if a business has employees who drive their own car for business purposes.

Inland Marine

An Inland Marine Insurance Policy is a specialized type of property insurance. ALso referred to as ‘Equipment Coverage’, Inland Marine covers property that is likely to be moved or in transit. It also can be used for highly specialized property. The most commoon types of equipment that need inland marine coverage are construction equipment, transportation cargo, mobile medical equipment, cameras and movie equipment, musical instruments, fine arts, solar panels and other related equipment.

Surety Bond

A Surety Bond is a Contractual Agreement between three parties, the principal (business), the surety (the insurance carrier), and the oblige (the party requiring the bond). Bonds are usually issued between two businesses or a business and a contractor. The Surety Bond protects against financial loss due to the principals’ failure to complete a project or failure to meet contract specifications. The bond guarantees the principal performs in accordance to the contract obligations and if they do not, the bond pays up to the limits of the policy.

Joisted Masonry (5022)

Joisted Masonry is a part of NCCI Class Code 5022. Joisted Masonry is also one of six building construction categories established by Insurance Services Office, Inc. (ISO). These six categories are part of the Commercial Lines Manual (CLM) and is designed for the purpose of developing rates for insuring commercial property based upon the likelihood of damage by fire. The CLM description of Joisted Masonry (5022) Construction is considered a building with exterior walls of masonry or fire-resistive construction equipment rated for not less than one hour and with combustible floors and roofs.

This classification includes worked done on exterior walls with combustible floor and roof. The types of materials used in these walls include adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or other similar materials. The code associated with Joisted Masonry (5022) Construction ranks a facility 1-6 based upon how fire resistant the facility is that the business is located or is working on.

ISO Class 1 is Called Frame.

Exterior walls of wood, brick veneer, stone veneer, wood ironclad, or stucco on wood. (Construction Code 1)

ISO Class 2 is Called Joisted Masonry (5022).

Exterior walls of masonry material (adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials) with combustible floor and roof.

ISO Class 3 is Called Non Combustible

Exterior walls, floor, and supports made of metal, asbestos, gypsum, or other noncombustible materials.

ISO Class 4 is Called Masonry Non Combustible.

Same as joisted masonry except that the floors and roof are of metal or other noncombustible materials.

ISO Class 5 is Called Modified or Semi Fire Resistive.

Exterior walls, floors, and roof of masonry or fire-resistive material with a fire resistance rating of at least 1 hour but less than 2 hours.

ISO Class 6 is Called Fire Resistive.

Exterior walls, floors, and roof of masonry or fire-resistive materials with a fire resistance rating of at least 2 hours.*

Masonry

Insurance Needs for a Masonry Small Business

With a booming economy comes a booming construction industry. One essential part of the construction industry is enough masonry companies to fill the needs of builders. Masonry contractors install and repair brick, block, stone, veneer and other masonry items onto and inside of buildings or structures. Their work may include fencing or retaining walls, outside signs and other related structures. The masonry industry consists of more than 41,000 businesses in the United States. The industry generates $23 billion in revenue each year and employs more than 147,500 people. Masons practice a craft that has been handed down for centuries and takes years of careful study working with a master craftsman.

As a small-business owner (or even a person considering starting a small business), your mind is more than likely spinning over all the types of insurance you have to choose from. It is important to not take this part of running a business lightly. Each type of insurance covers a different risk your business may or may not face. Here is some information about the risks Masons face and the types of insurance coverage a business within this industry should consider.

Unique Risks within the Masonry Industry

Masons work with heavy materials which elevates the risk of bodily injury. Working in the Masonry Industry requires bending frequently bending and lifting heavy objects. This can cause excessive wear and tear on the body. Wearing a back brace and lifting with the knees instead of the back should be a common part of any businesses protocol. Implementing a safety program and including the workers in the development and implementation of the program is the best way to create a company culture focused on safety.

Masons rely on their chisels, mallets, and metal straightedges to perform their work. If those tools are lost, damaged, or stolen the mason is not able to do their work. Depending upon how expensive or how specialized these tools are, an inland marine insurance policy may be needed to help replace the tools quickly in the event of damage or theft.

Recommended Insurance for Masons

General Liability Insurance
Inland Marine Coverage
Property Insurance
Hired and Non-Owned Auto (full commercial auto if vehicles owned)
Workers Compensation

General Liability Insurance

General Liability Insurance is required by law for most masonry businesses. Contractors will need it to enter into most contracts. General Liability protects masons from common property damage and bodily injury claims. It is important to remember that it is not all-encompassing. There are exclusions in every policy and it is important to discuss with your independent insurance agent what additional coverages your business may need.

Inland Marine Coverage

Inland Marine Insurance is designed for businesses that have specialized equipment and tools that are frequently in transit away from the businesses location. It can also cover equipment that is stored at a third party location. If your business has a trailer you use to haul necessary equipment or if you store equipment off-site, this coverage may be necessary to adequately protect the business.

Property Insurance

Commercial Property Insurance is needed whether you own or lease the property your business is located. It will cover the structure of the business and some additional equipment like cabinets, and desks. There are exclusions to each policy. Take an additional few minutes before purchasing to understand exactly within your business is and is not covered by a commercial property insurance policy.

Hired and Non-Owned Auto

Hired and Non-Owned Auto Insurance is a type of commercial auto insurance for businesses that have employees drive their personal vehicles for business purposes or leased vehicles. If your employees are driving as a result of work and they cause an accident, the business is responsible for the damages to third parties. This can be extremely costly if it is not properly covered.

Workers Compensation

Workers Compensation Insurance is required by law for most businesses in most states. Some states have exclusions depending upon the industry, the number of employees, or the revenue of a business. Even if a business is allowed to not carry coverage, it is usually in the best interest of the business to still carry some form of coverage. Even if the business has one employee who is the owner, there is a ghost policy that is offered at a much lower rate that can meet the requirements for most contracts.

Additional Coverages Masonry Businesses Should consider:

General Liability
Inland Marine Coverage
Commercial Auto
Business Income with Extra Expense
Umbrella

Masonry Contractors and Construction

SIC Business Insurance Codes:

1741: Masonry, Stone Setting and Other Stone work

NAICS Liability Classifications:

238140: Masonry Contractors
327310: Cement Manufacturers

Business ISO General Liability:

97447: Mason Contractors

NCCI Class Codes:

5022: Mason Contractors and Masonry Construction
5222: Concrete Construction—Bridges and Culverts

Construction Industry

Why is Workers Compensation Insurance so difficult to purchase?

The construction industry in general is very difficult to locate multiple options when quoting workers compensation insurance. A large majority of workers compensation providers do not have an appetite for small construction or high hazard construction businesses. These insurance companies feel the construction industry suffers too frequent and severe claims. Therefore, a lot of construction businesses default to the appropriate state fund or assigned risk pool for workers compensation coverage. The state fund or assigned risk is the most expensive option with the least flexible payment plan. It is simply not the best option. The state fund, also known as the pool or assigned risk, often becomes the only option for small businesses with a high risk and a low amount of revenue. When businesses travel into other states to perform work, there are additional difficulties if they are insured through a state workers compensation fund. In most cases this creates a gap in coverage when the employees are working out of state. Several state workers compensation funds do not extend coverage outside of that state. It’s best for business owners to contact their agent or the insurance provider to verify if coverage extends to the job site that is outside of the state boundaries.

Factors that cause difficulty for the construction industry to find workers compensation insurance quotes:

General Construction Services – not specializing in 1 or 2 specific trades. When a business does the same trade everyday the chances of a workers compensation claim is less likely. Construction businesses that perform multiple trades are more difficult to find multiple workers compensation solutions for.

Heights – historically workers compensation claims pay out considerably more when an employee falls from a height above 15 feet. Most workers compensation insurance carriers limit heights to 15 feet. Any heights slightly above 15 feet must show proper safety precautions taken. Business owners that require proper safety equipment to be attached and written procedures in-place for the underwriter to review generally are given more competitive options. It’s important for your insurance agent to give the proper information to the insurance company underwriter so they have a clear and comfortable picture. Most insurance agents do not take the time to gather the right information therefore the underwriter doesn’t feel comfortable and declines to offer coverage.

Unstable Industry – when the U.S. economy fell in mid-2000’s, the construction industry suffered the most. Workers Compensation insurance carriers who insure construction businesses suffered claims combined with reduced premiums paid by employers due to fewer employees. Insurance companies must be able to somewhat predict the amount of money they are collecting for each risk they insure. Businesses that produce a consistent payroll are easier to predict, businesses that process payroll randomly throughout the year are not, therefore less likely to have multiple insurance companies willing to quote.

Sub-contractors or 1099’s – construction businesses commonly use 1099 or sub-contract labor. Businesses do not specialize in some construction services that are connected to a job therefore must sub-contract to another business that does specialize in that service. The use of 1099 sub-contractors in this way is acceptable by most insurance providers as long as the business owner is collecting a workers compensation certificate of insurance from the sub-contractor. Businesses that choose to pay their labor by 1099 instead of w-4 are viewed negatively by workers compensation providers. Most workers compensation providers have a very limited appetite for businesses that use a significant amount of 1099 labor. If a sub-contractor fails to pay their workers compensation premiums and the General Contractor is not aware their policy cancelled, most likely the General Contractor’s workers compensation policy will be required to cover the claim. Therefore, Workers Compensation providers do NOT like a large sub-contractor or 1099 exposure even if certificates of insurance are collected.