Contractor Insurance All Risk – How to choose the right general liability insurance policy for your contracting business
Having general liability insurance offers several benefits beyond financial protection. Here are some key advantages:
1. Peace of Mind: Knowing that you have insurance coverage in place can provide peace of mind, allowing you to focus on your work without worrying about potential legal or financial consequences.
2. Enhanced Professional Reputation: Clients and business partners feel more confident working with contractors who carry general liability insurance. It demonstrates your commitment to professionalism and your ability to handle unforeseen circumstances.
3. Expanded Business Opportunities: Many contracts and jobs require contractors to have general liability insurance as a prerequisite for consideration. By having this coverage, you can access a broader range of projects and increase your chances of securing lucrative contracts.
4. Protection Against Unforeseen Circumstances: Construction projects can be unpredictable, and even the most meticulous planning cannot account for every eventuality. General liability insurance provides a safety net, protecting contractors from unexpected claims and lawsuits. Contractor insurance that is all risk is a myth. Read on.
Benefits
A good construction liability policy protects your business from lawsuits or damages made by claims during the construction process. The most important advantages of the benefits of having liability insurance are:
- It will protect your business against injury and/or property damage.
- Liability insurance will assist you in covering costs and damages after a judgment has passed.
- It provides a certain level of value and security, knowing that your assets and employees are protected.
- It can be used to cover the cost of attorney fees, witness fees, court expenses, and more.
- The construction liability will protect in many ways: your company as a whole and individual claims against the company.
The policy can be taken out in the joint names of the contractor and the owner to cover construction projects ranging from small houses to construction of roads, bridges, dams, tunnels, energy power units and many others. Remember, contractor insurance that is all risk is a myth.
The Material Damage Section of our policy provides cover for the contract price, the cost of the materials or items to be supplied by the principal, the construction plant and equipment, the construction machinery and clearance of debris.
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How Type of Construction Materials Affects Builders Insurance Rates
The higher quality the construction, the lower the risk and relative insurance premiums on the project. For example, a construction with a steel frame can withstand damaging perils like wind and fire compared to a wood structure. Although most residential projects are wood construction, they are also typically the most expensive to cover.
Additional factors that can impact the cost of builders risk insurance include duration of the project and your deductible amount. For example, a construction time beyond 12 months will increase your cost due to paying premiums over a longer period of time. Low deductibles can also increase your premium. Contractor insurance that is all risk is a myth.
All of these factors will determine the ultimate cost of insuring your project and where it falls on the one to four percent of project cost range. For example, if you are building a $1 million home located in a flood zone, you use low quality materials, and the duration of the project is 12 months, your premium could reach the high end of the range at four percent, or $40,000. However, a $100,000 home built with high quality materials, and not in a flood zone, might be one percent, or $1,000.
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