Sauna Installation Business Insurance
There are particular hazards and risks involved in installation of special facilities like steam rooms and saunas, and you should make sure you have proper Sauna Installation insurance before you step foot into your customer’s home domain to do your work.
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The first thing to remember is that you are introducing yourself, your tools and equipment and some large physical equipment into a new area.
You have to get it through the front door, locate it in place, connect it up, test it and instruct the users how to make use of it properly and safely.
At every step of the way, you are legally required to be exercising full care and due diligence with expertise and if anything goes wrong, you could be held liable for substantial claims.
The first thing to check, before you accept a contract to supply and do a dry sauna installation, a steam room installation, a wet room installation or any of the other popular kinds of hot tubs and saunas, is whether the location is right, has good access to power, water, drainage and cover.
The customer has a legal right to claim that if any of these things were not in place and adequate for their need, you should have notified them and either refused the work, or stipulated in the contract that it was not your responsibility.
As soon as you have accepted the work, the responsibility for all of this is on your head, and unless you have enough Professional Indemnity (also called Errors & Omissions) insurance, a claim could ruin your business and dig deep into your personal finances if a judge and jury decides you were at fault.
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Now, think about how much disruption you are about to bring into your customers’ homes.
Doing a barrel sauna installation, or a wet room installation means you will have to be bringing substantial, heavy and bulky items right into the middle of their premises.
You may have to rip up floors, interrupt water and electricity supplies, and when you are busy working, completely ensure the safety of everyone around you.
Even with the greatest degree of care, accidents can happen, but in the case of the sauna installation operation, there are many points at which your due care can fail.
This is why you need enough General Liability insurance to protect you in even the most extreme cases.
When you are doing specialized work like outdoor sauna installation, dry sauna installation and all the other kinds of sauna installations, you are also responsible for how the products match the buyers’ expectations and your recommendations.
\In case there is some dispute where the customer claims either that once you have finished the installation it did not work as specified, or that some features that you had promised are missing, you should cover the possibility of any lawsuit by having Product Liability insurance.
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The three classes of potential disputes all are covered by liability insurance policies.
Below we will explain how they work and what they offer in more detail.
Business Liability Insurance for Sauna Installers
General Liability business insurance
In case a claim is made by a third party (some other person except your own workers) that they were injured, or their property was damaged, by some event that happened while you were engaged in sauna installation activity, a General liability insurance policy protects your business.
General liability cover is usually called “trips-and-falls” insurance, because it covers you in case at the place where you are working someone trips over something lying on the floor or falls into an open hole.
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This is especially important for a sauna installer because you may have to bring large and bulky packages onsite and you cannot safely store them out of the way.
You may have to dig holes for the sauna, channels for water inlets, drainage and power cables etc and all of this can create an extremely hazardous environment.
Until the work is completed, it is impossible to completely secure the workplace, and accidental trips or falls cannot be avoided totally.
Third parties injured from a fall at any time during or after you started working may claim that your tools, power cables, workbenches or work tables were placed dangerously, or workholes were not properly guarded causing them to injure themselves.
In such a case, you could be regarded in a court as being responsible for the consequences and if you lose the case you would be required to pay substantial damages as well as legal costs.
General liability insurance can cover all these potential claims.
Professional Liability (E & O) insurance for sauna installers
Especially for sauna installation professionals, professional liability insurance is important because your customers can claim that they did not get exactly the result that you promised or contracted for, or that your work was inadequate or unprofessional.
Suppose that something went wrong during the installation and the area of work or some space around it was damaged.
One possible case could be where you have been contracted to install a wet sauna inside an older home.
If later on there is some leakage or water from the room into the walls around it, it could seep right down to the foundations of the house and result in a collapse of the building.
Your liability in such a case could run to hundreds of thousands of dollars when the customer sues your business for rebuilding or replacement of the whole structure.
Errors & Omissions insurance is a vital form of cover for your sauna installation business because your customers have placed a great deal of faith in you to perform your services properly and professionally.
Professional Liability insurance gives you protection in case customers claim that you performed your services without proper attention and due care, or with the required levels of skill.
They can even claim that the service was not what you were hired to do.
If it turns into a lawsuit, even if you win, the cost of defending your business can be substantial.
While it is going on, it can have a damaging effect on your reputation so it is better to have it dealt with properly and quickly.
Even if you are not working for individual customers, but are working as a sub-contractor to builders or other companies, you should have Errors & Omissions insurance cover.
For example, if you have agreed to complete a sauna installation in a hotel by a specific date, there may be penalties in the contract for non-performance.
Suppose by accident that the parts you are relying on to finish the job don’t arrive in time to complete the contract on time because of supply chain problems.
You could then be sued for negligence and could even have the builder claiming that they suffered severe financial damages because of your lapse.
In such a case, Errors & Omissions insurance will cover the claim.
It is important to know that professional liability insurance does not protect you in case of payment disputes.
When a customer refuses to pay for work done, claiming that the work was not satisfactory, the dispute is not covered by liability insurance.
Product Liability insurance
When your sauna installation business is also supplying the ancillary products necessary for the installation like piping, pumps, and heaters then you should have product liability insurance in case these are faulty and the customer claims for repairs or replacement.
Another risk is when you are installing high-pressure water piping or hot-air vents leading out of a heated sauna.
An accident like a pipe bursting or a vent jamming can flood the area, or cause a fire, resulting in damage to floors, carpeting and furniture throughout the home.
In such a case, the owner of the property can sue for the costs of repairs.
No matter where you are in the supply chain, you may have to face a court case for defective products.
Even if the supplied products were manufactured by another company, you can be liable in case of defective design or undeclared dangers.
Benefits of all three liability insurances
With these three liability policies, you get the benefit that the insurance company must defend themselves and you, whether or not you were at fault.
This means that you are not required to mount the defense, to find and fund your own legal defense team, and in case the jury or judge awards the claim against you, to have to pay the amount awarded and maybe even the other party’s own legal costs.
Commercial insurance for sauna installers
As well as the liability insurance types mentioned above, you need to protect your business’ assets and your workers.
For this, you need to take out the specific types of insurance like:
Commercial property insurance
If your sauna installation business has offices or workshops in owned or rented premises, you carry a substantial risk in case of damage.
Natural events like storms, floods, earthquakes or fires, or man-made vandalism and sabotage can damage or totally destroy the value.
Especially if you are liable under a rental or mortgage agreement, the improved value of the property should be covered.
As well as the value of the buildings, commercial insurance covers the business contents of the premises, such as business equipment and furniture, computers, etc.
Policies from some insurance companies may also cover your stock and inventory, but in cases of businesses like yours, where individual stock items have a very high individual value ($5000 per sauna), you should otherwise take out separate inventory insurance that covers the stock and goods held inside your buildings protecting against those same risks, as well as theft and burglary.
Commercial vehicle insurance
It is a natural part of sauna installation operations to be moving bulky items into sites, as well as collecting parts from suppliers and delivering them to your customers’ sites.
This means you must have proper Commercial vehicle insurance.
You are not insured if you use a private auto for collections or deliveries, or for any other business activity like transporting workers to worksites.
You may completely void your private auto cover if the insurance company claims that it was being used in commercial activities.
Commercial auto cover also gives higher protections in case of a major claim compared to private vehicle insurance.
You can get between $1 million to $2 million in all-risks insurance because the levels of risk for business are generally higher.
Most sauna installation operators invest a lot of money in the dedicated equipment and tools that this specialized business needs to meet customers’ requirements.
Often, this equipment is not guarded because it needs to be left at the workplace.
This leaves you with risk of damages, loss or theft.
To protect your investment and your ongoing operations you need Equipment insurance that gives you the ability to replace any missing equipment quickly and get the money back from your equipment insurance policy at once.
Business Owners Policy cover for sauna installers?
Some insurance companies sell a Business Owner Policy (BOP) policy that combines general liability insurance, commercial property insurance and other kinds of business-related covers such as Directors Liability.
You can also decide to take business interruption cover.
BOP provides increased coverage and is generally cheaper than separate policies.
How much insurance should a sauna installation business have?
The required levels of insurance depend mainly on the features of your own business, such as the size of the business, the types of saunas you install, where business activity is located, your claims history and so on.
One important feature is whether you are doing large contract work with building contractors, or mostly doing installations for private homeowners.
In the following table, we show some general guidelines of the best levels and costs for sauna installation insurance that we can give based on our own experience dealing with businesses that deal in similar sectors, such as Handyman Liability, Solar panel contractor, Roofing, Freelancer, Fence Installation, General Contractors, Pressure Washing, Plumbers, Painter, Electricians, Glaziers, Carpenters, and Groundskeeping and Landscaping.
You should talk to insurance brokers and agents to get the right deal that suits your exact needs.
The following are the general levels of cover recommended for these kinds of businesses, with rough estimates of the range of expected costs for annual premiums:
|Insurance type||Level of cover suggested||Expected range of annual premium|
|General Liability||Contractors: $5 million full year, $1 million for a single claim||$1100 – $2100|
|Private homes: $1 million full year, $250,000 for a single claim||$350 – $580|
|Professional Liability (Errors & Omissions)||Contractors: $500,000 full year
$100,000 single claim with $2500 deductible
$900 – $1400
|$900 – $1400|
|Private homes: $250,000 full year, $50,000 for a single claim with $500 deductible||$600 – $950|
|Product liability insurance||Contractors: $1 million for the full year, $250,000 single claim with $1000 deductible||$1200 – $1500|
|Private homes: $250,000 full year, $50,000 for a single claim with $500 deductible||$700 – $900|
|Commercial auto insurance||Based on replacement cost||$1650 – $2900 per vehicle|
|Commercial property insurance||Calculated on insurable value (IV) of improvements||$0.40 – $0.50 per $100 IV|
|BOP insurance||$5 million general liability + calculated commercial property cover||$350 – $500 & $0.30 – $0.45 per $100 IV|
What does insurance deductible mean?
A policy can have a deductible amount as a way to reduce premiums.
It means that you pay the first part of any claim up to the agreed deductible amount, after which the rest of the claim is covered by the policy. Insurance companies like to avoid “nuisance” claims because they mean high administration expenses.
Talk about this with your insurance agent, or insurance broker to see how much you can save.
Should you get temporary insurance for a seasonal sauna installation business?
If your sauna installation business is seasonal, like only doing outdoor saunas in summer months, it means that you don’t have continuous levels of activity over the whole year.
In such a case, short-term insurance may be a good choice.
You can get a policy that specifies cover for a defined period, for example, the six summer months.
This will give you the same risk cover at lower premium cost because you are paying only for the period you need.