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What is the Action Over Insurance and Action Over Insured Contractor ?

Action over insurance, also known as “contractor’s protective professional indemnity insurance,” is a type of liability insurance that provides coverage to contractors in the event of a claim arising from the actions of subcontractors or other parties working on behalf of the insured contractor. It is typically an extension of the contractor’s professional liability insurance.Yes, action over insurance can be quite expensive and not all contractors have it.

Here are some key points to understand about action over insurance:

Purpose: The purpose of action over insurance is to protect the contractor from potential legal liabilities that may arise from the actions or negligence of subcontractors or other parties working on the contractor’s behalf. It covers claims related to errors, omissions, or negligence in the services provided by subcontractors.
Coverage: Action over insurance generally provides coverage for legal defense costs, settlement payments, and judgments related to claims arising from the actions of subcontractors. It may cover a wide range of professional services within the scope of the contractor’s work.
Requirements: In some cases, certain project owners, general contractors, or property managers may require contractors to carry action over insurance as a condition of working on a project. This requirement is often seen in complex construction projects or in locations where the risk of subcontractor errors or negligence is high.
Cost: Action over insurance can be relatively expensive compared to other types of insurance coverage. The cost depends on various factors, including the size of the contractor’s operations, the type of projects undertaken, the limits and deductibles chosen, and the contractor’s claims history.It is true that some management, particularly in areas like Manhattan, may require contractors to have this type of insurance in order to protect themselves from potential liabilities. This requirement can make it exclusive to contractors who have obtained action over insurance.
Availability: Not all contractors carry action over insurance. It may be more common among larger contractors or those who frequently work on projects where the coverage is required. Smaller contractors or those specializing in specific trades may be less likely to have this insurance.