Members of the United Pool Association got a scare in February when the group’s insurance broker sent out a letter denying coverage for installing drain covers and SVRS devices.
Citing the myriad enforcement policies, entrapment liability and structural damage from draining, USI Holdings Corp. urged its clients to defer any VGB-related installation work to subcontractors. The new policy was largely met with confusion and anger.
“We’re told we’re not being covered, so therefore nothing is being done. [Meanwhile], our commercial customers are in violation of federal law,” said Scott Freitas, owner of S&C Pool Service in Vallejo, Calif. “It’s very confusing.”
Hundreds of phone calls from concerned UPA members ultimately led USI to re-examine its policy. Fireman’s Fund, which covers the group’s claims, likely will honor claims arising out of the installation of drain covers and SVRS devices as long as the pool isn’t drained, according to Ron Carlson, a USI account manager in Woodland Hills, Calif.
“I think that’s a compromise everyone can live with,” he said. “On the one hand, we’re trying to maintain the program, and on the other we’re trying to make sure we’re not leaving anyone flapping in the breeze.”
The draining stipulation was created in part because of the potential for thousands of popped pool claims, Carlson added.
The allowance of VGB-compliant installations comes as welcome news to UPA members because some were prepared for litigation against USI for misrepresentation of contract.
“They have the right to adjust the policy according to the coverage that is there — not to the coverage that isn’t,” said Dave Robinson, insurance chairman at UPA. “If you stop and think about it, realistically, USI has been covering us for draining pools and putting on covers anyway. It’s nothing new.”
Regardless of how it’s interpreted, the new federal law has created the potential for more litigation for anyone working in the pool and spa industry.
“The requirements of compliance under the Virginia Graeme Baker Act do raise some liability issues — there’s no question about it. But there are some liabilities we have to accept,” said Ray Arouesty, owner of Arrow Insurance Services in Simi Valley, Calif., who insures fellow trade group IPSSA.
The need for work in a hurting industry and the widespread impact of the mandate are reason enough to accept the risk, he added.