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RESNET Now Offers Insurance Opportunity

September 01, 2004
September/October 2004
This article originally appeared in the September/October 2004 issue of Home Energy Magazine.
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RESNET Now Offers Insurance Opportunity

        With the attention given in the mass media to mold problems in buildings and the coverage of costly litigation regarding mold and indoor air quality over the past few years, more than a few contractors have thought long and hard about insurance coverage.A recent issue of Home Energy addressed this topic with articles about the challenges facing home energy raters and weatherization program providers who are seeking general liability insurance or professional liability insurance (see “Desperately Seeking Insurance,” Jan/Feb ’04, p. 28). General liability insurance is standard commercial insurance that covers property damage. Professional insurance covers errors and omissions on the part of the insured.
        The challenges facing raters and weatherization professionals looking for insurance include clients who require that raters and contractors have insurance; insurance companies that have no idea what home energy raters do; and the high cost of insurance. In California, for example, general liability insurance can cost up to $5,000 per year.Want professional liability insurance also? That will cost you up to $3,000 more in California. But thanks to efforts by the Residential Energy Services Network (RESNET), home energy raters from all over the country can now get reasonably priced, comprehensive insurance coverage.
        RESNET formed a Rater Insurance Task Force in 2004 to address the insurance concerns of its members and also hosted a meeting to discuss the issue at its 2004 annual conference.And these efforts have paid off. RESNET negotiated with Zurich North America, the second largest general insurer in the United States, to provide general liability insurance with an average annual premium of only $500 per year.And Chubb Specialty Insurance, the largest writer of U.S. package policies, now offers professional liability insurance for an average annual premium of $2,700 to RESNET members.The actual insurance premiums depend on the size of the insured business and the nature of the work done by an individual or company. The insurance is comprehensive; RESNET members who are raters, rating providers, rater trainers, and rater software developers all qualify for the insurance.
        “There are two important developments to come out of us offering our members insurance,” says Steve Baden,RESNET’s executive director.“Raters can now easily obtain insurance that is below the cost of what was previously available, and HERS and home energy raters are now recognized by the insurance industry.” So far RESNET is working with only two insurance companies.“We got two big ones,” says Baden.“Down the road we want to create a competitive environment where other insurance companies will get involved and the premiums will go down.”
        At press time, about 30 members have signed up for insurance; most for general liability insurance and only a few for professional liability insurance. Baden expected a greater interest in insurance for raters and cites two reasons for the slow start.“Many raters are waiting for their current insurance policies to run out,” says Baden.“And I think there is still not a complete understanding among raters of why insurance is so important.” For example, many raters may not know they should carry insurance until they actually need it.“What if a rater is sued by a client for a problem that he or she is not responsible for? Most raters don’t know that professional liability insurance will cover their legal costs,” says Baden.RESNET is putting together an education plan aimed at informing its members about the possible consequences of not having insurance—like big, fat bills for legal services that they didn’t think they would ever need.

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