In the insurance business, situations often arise that provide opportunities to educate our valued clients. This is why I firmly believe that insurance is, at its core, a relationship business. Open communication and honest dialogue allow us to fulfill our role as trusted advisors to those we insure.
Last week, I was following up on a renewal for a valued client who owns a swimming pool contracting business. Like many business owners, he wanted to explore the market to ensure he was getting the best service—a step I fully support, as it allows me to demonstrate my value. Interestingly, his conversation with another broker brought up an opportunity to discuss a critical coverage detail in his general liability policy that might have otherwise gone unnoticed. Much of our work happens behind the scenes, and although we strive to cover these essential topics with our clients, time constraints sometimes make it challenging.
A Response That Opened the Door to Important Insights
Without using any names, here is how the text conversation went:
“Hey [Client Name], how’s it going? Since it expires in a week, I wanted to make sure you received the DocuSign for your General Liability renewal. Let me know; thanks, Mike.”
“Hey Mike, I got a quote for way less, brotha. If you think you can beat it, I can send it over.”
“Hey [Client Name], did you read the coverage forms? There are a lot of risky exclusions on pool contractor policies.”
“Yeah, it matched everything.”
It’s rare for long-term clients to shop around with other brokers, but this exchange made me realize my client didn’t fully understand that “matching” coverage is about much more than just policy limits and deductibles. When I asked about the coverage forms, I knew I’d have an opportunity to educate. As insurance professionals, we can’t expect our clients to grasp the complexities of a general liability policy. The truth is, 99% of consumers don’t read through their policies, and very few know which exclusions they should be looking for in the forms. When the client forwarded me the proposal he’d received from another agency, my intuition was confirmed.
When Price Isn’t Everything: The Cost of Overlooking Key Exclusions
I knew what to expect and exactly where to focus my attention.
At Fusco Orsini & Associates, when we design coverage for swimming pool contractors, we avoid offers from insurers that include a ‘subsidence exclusion’ in their policies. In our experience, few exclusions are as potentially damaging to a swimming pool builder as this one (I’ll explain the details of the subsidence exclusion in the following section). In addition to ensuring the removal of this exclusion, we also request a ‘pool pop-up endorsement.’ While these endorsements may come with sub-limits, some coverage is far better than none. I’ll go over pool pop-up coverage later in this post.
The coverage offered to my client was from a highly reputable, national carrier that I respect immensely. I won’t name the company here.
As I opened the documents, I skipped over the pricing page and went straight to the forms list.
And there it was—the words no swimming pool contractor (or most contractors, for that matter) should ever see: EXCLUSION – SUBSIDENCE.
The Danger of Subsidence Exclusions for Contractors
I knew my client valued both his protection and his business. As a responsible business owner, he was understandably looking for ways to cut costs in a slowing market.
I promptly pulled the exclusion from the policy, emailed it to him, and sent a quick text to make sure he took a look. He couldn’t believe the broker did not point out the exclusion.
SUBSIDENCE EXCLUSION
A. The following exclusion is added to Paragraph
B.1. Exclusions applicable to Business Liability Coverage and applies to the state of California:
This insurance does not apply to “property damage” included in the “products-completed
operations hazard” arising out of the subsidence of land. This exclusion applies whether such “property damage” arises solely from subsidence or from subsidence in combination with other causes, whether natural or man made.
B. With respect to this Paragraph 1. of this endorsement, subsidence means earth movement including but not limited to:
a. Landslide;
b. Mudflow;
c. Earth sinking;
d. Earth rising;
e. Collapse or movement of fill;
f. Improper compaction;
g. Earth settling, slipping, falling away, caving
in, eroding or tilting;
h. Earthquake; or
i. Any other movement of land or earth
For swimming pool contractors, the subsidence exclusion can be particularly harmful. Pool installations often involve extensive excavation and land modification, which can inadvertently lead to issues like settling, sinking, or even landslides. If any property damage occurs due to these subsidence-related events, this exclusion means the contractor would have no coverage under their general liability policy for claims or lawsuits. In practical terms, a single instance of land movement could result in costly out-of-pocket expenses, potentially putting the contractor’s business and assets at risk. This is why carefully reviewing and understanding these exclusions is essential to protect their work and livelihood.
What Is Pool Pop-Up Coverage and Why Does It Matter?
Pool pop-up coverage is a crucial endorsement for swimming pool contractors, designed to protect against a unique and costly risk. A ‘pop-up’ occurs when a pool, typically due to pressure from groundwater, is lifted or pushed up from its foundation—a situation that can cause extensive structural damage. Standard general liability policies don’t always account for this risk, which is why pool pop-up coverage is essential for contractors who want to ensure their work and their clients’ investments are fully protected. While these endorsements may come with sublimits, having some level of coverage can make a significant difference if an unexpected issue arises.
Here is sample pool pop-up language:
Final Thoughts: The Importance of Knowing Your Policy
Ensuring Comprehensive Coverage for Pool Contractors
My client now truly understands what it means to ‘match’ coverage on general liability policies. I’m grateful he trusted me enough to share what he found in the marketplace, giving me the chance to further earn his trust and strengthen our relationship.
To say he was shocked by the SUBSIDENCE EXCLUSION and its potential impact on his business is an understatement. After discussing the exclusion’s language and the importance of pool pop-up coverage, the cost of the policies wasn’t even a topic. It was an eye-opening moment for him, underscoring the dangers of focusing too heavily on premium alone.
At Fusco Orsini & Associates, we bring over 100 years of combined experience in insuring swimming pool contractors. We pay close attention to policy forms, and because of this diligence, we’ve had clients who faced subsidence losses and received crucial protection from their insurance. This attention to detail can mean the difference between a thriving construction business and one facing bankruptcy.
If you’d like assistance with coverage for your swimming pool contracting business—or any related trades, such as gunite and shotcrete, hardscape, plumbing, electrical, and more—please complete the form below. An experienced broker will reach out promptly. Thank you for visiting!
