‘I Don’t Do the Work. Do I Need Insurance?’

If you truly operate as a broker, consultant or sales company, never perform any pool work, never send employees to jobsites and subcontract all work to properly insured contractors, then you may not have the same exposure as a pool service company. However, general liability insurance can still protect you from claims such as a customer slipping and falling at your office, property damage allegedly caused while meeting with a client, advertising or personal injury claims (libel, slander, copyright issues) or other claims arising from your business operations unrelated to pool work. 

The bigger issue is your potential liability for the subcontractors you hire. Even if you don’t touch a pool yourself, a customer may still sue your company if you hired the contractor, the contract is with your company or the customer believes your company is responsible for the work. For that reason, many businesses that subcontract all labor still carry general liability insurance and require every subcontractor to carry their own GL policy, name the business as an additional insured and provide proof of insurance before work begins.

If you’re acting as a referral service and the customer contracts directly with the pool professional, your need for GL coverage may be less critical, but some business liability exposure still exists. The real question is this: Who is signing the contract with the customer? That makes a significant difference in your risk. Lawsuits don’t always depend on who actually did the work; they often target whoever has the relationship with the customer and appears to be responsible. 

For example, a customer hires your company for a heater installation. You subcontract the work to another company. If the heater is installed incorrectly and causes damage, the customer may sue both your company and the subcontractor, even though you never touched the equipment. The customer typically doesn’t care who performed the work; they look to the company they hired and paid. Even if you ultimately aren’t responsible, you may still have to hire an attorney and defend yourself. General liability insurance helps pay for that defense and any covered claims.

If your business is truly just a marketing, referral or lead-generation company — and you don’t perform the work, supervise the work, warranty the work or contract directly with the customer, then your exposure is much lower. However, you still have everyday business liability exposures (office visitors, advertising claims, etc.).

A good rule of thumb: If the customer’s contract and invoice are with your company, carry general liability insurance.

The cost of a GL policy is often far less than the cost of defending even a single lawsuit.