What Does General Liability Insurance Cover For Contractors?
Insurance is essential for people in every line of business. Unfortunately, all businesses are different and have different insurance needs. The same holds true for contractors. The better you understand your insurance coverage and protection needs, the better you can protect your business interests.
What Kind of Insurance Should a Contractor Have?
You have probably found yourself asking many questions about your insurance needs, such as “Do contractors need professional liability insurance?” Or, “What is construction general liability insurance?”
Just as all businesses and industries have specific and unique insurance coverage and protection needs, so do all contractors. Different contractors will have different needs from their insurance protection. Some coverage types that are fairly universal among contractors, though, include the following:
Business owner’s policy. A standard business coverage that includes property insurance, general liability insurance (fundamental coverage), and business interruption protection.
Professional liability insurance for contractors. Protects you from legal expenses and penalties resulting from negligence claims made against you.
Workers’ compensation insurance. Provides employees with reimbursement for medical bills and lost wages due to work-related injuries and illnesses.
Commercial auto insurance. Provides protection from costs related to damage caused by or to vehicles your construction business owns.
Builders risk insurance. Offers protection for structures in the process of being built along with equipment and materials kept on construction sites against covered events during the construction process.
Contractor equipment insurance. While there are policies that specifically protect equipment on business property and construction sites, this coverage protects your equipment while in transit from one location to another.
There may be other types of insurance you need due to the nature of your business and the area where you work.
For instance, some construction businesses need flood insurance, umbrella insurance, and specific rider policies for expensive equipment. Working with an organization that specializes in insurance and bonding can help you get the right protection for your business, whether it involves insurance, bonds, or (more than likely) a combination of the two.
Why Do Contractors Need General Liability Insurance?
The bottom line is that all businesses need general liability insurance. We live in a litigious society, and even if you do everything right to ensure there are no accidents on your property, the odds are still alarmingly high that your business will be sued at some point along the way.
The problem is one lawsuit can cripple a business, financially, in legal fees alone. In the construction industry, there is an inherent risk in the work you do that makes general liability protection even more necessary.
Because many construction companies are small businesses without large cash reserves, operating without adequate general liability protection places your personal assets at risk as well.
In other words, it is well within your interests to invest in larger amounts of general liability protection as well as umbrella liability coverage to broaden the scope of your coverage and protect your personal assets should a judgment exceed your insurance protection.
What Kind of Protection Does General Liability Insurance Provide?
General liability is important for many reasons. It protects from the following:
- - Property damage
- - Bodily injuries
- - Legal fees and judgments
That means that if someone is on your business property and slips on the ice in the winter, your liability coverage will cover their medical costs. It also means that if you’re installing a piece of heavy cabinetry and drop it damaging a client’s hardwood floors, you’re covered for the damage you did to the customer’s property – up to the limits of your liability protection.
What Does Professional Liability Insurance for Contractors Protect?
While you seek always to do your best work, there is still the risk that something will go wrong, either by accident or mistake. As a contractor responsible for the structural integrity of buildings and homes, that can cause disastrous results leading to catastrophic injuries.
Although it doesn’t require injuries to be catastrophic to result in a lawsuit, professional liability insurance for contractors helps to protect you from financial ruin if you or one of your employees makes a mistake that results in a lawsuit. The risks for contractors who not only build projects but design them as well are even more significant when it comes to lawsuits claiming negligence. It only takes one lawsuit to devastate you personally as well as professionally financially.
What About Workers Compensation Insurance?
Most states require businesses operating within their borders to provide workers with workers compensation insurance protection. This protection covers the costs of medical fees and helps to replace lost wages while patients recover from injuries and illnesses contracted while carrying out their job responsibilities. It will even pay families if those injuries or illnesses result in the death of your employees, and it critical for business owners in high-risk industries like construction.
Contact Coverage Specialists for Your Contractor's General Liability Insurance Needs
Getting the right insurance protection is important for any business. In high-risk industries, like construction, it carries even greater importance and can make a huge difference in your ability to remain in business if claims are filed against you. Work with Coverage Specialists, Inc. to make sure you get the protection your business needs.
Contact us through our contact form or at 973-831-2787, and we will find the best general liability insurance for you.