As an independent contractor, having the right contractor insurance limits is essential to protect your livelihood. Understanding exactly what is and isn’t covered by your policy, as well as other best practices for proper insurance coverage, will help you stay secure and successful in any job.
What is Insurance?
Insurance is a system of protection against financial loss. When you purchase an insurance policy, your insurer agrees to compensate you if certain events occur. This could include paying out for medical expenses, legal costs, and other losses resulting from an insured event. Different types of policies cover different types of incidents and offer varying levels of coverage depending on certain conditions or exclusions. Click here for the Board for Contractor Licenses.
What Are The Types of Contractor Insurance Limits?
As a contractor, it’s important to understand the different types of insurance that may be required or beneficial for your business. The specific types of coverage you will need to depend on the type of contracting services you provide, but in general, contractors should consider having general liability insurance and professional liability insurance at minimum. General liability insurance provides coverage for bodily injury, property damage or personal injury sustained by third parties due to your negligent actions or products. Professional liability insurance provides coverage for errors and omissions which can occur during the development or performance of a contract.
How Much Coverage Should You Have?
When determining how much insurance coverage you need, it’s essential to consider the work you do and the risks associated. Every contractor will have different coverage requires to be based upon their specific field, but here are some tips for understanding what amounts to buy. First, take into account the scope of your services as well as the standard of due care in your field. Next, evaluate potential liability expenses associated with accidents, errors, or omissions that could occur during performance of your services. These considerations should be combined with an assessment of regular business liabilities to determine appropriate limits for your policies.
How Can You Make Sure You’re Getting the Right Contractor Insurance Limits?
When choosing a policy, it’s important to know the limits of your coverage. Consider the amount of protection you require by evaluating the scope of services and potential business risks associated with your work. Depending on your specific contract and industry, there are different packages available that may include both general liability insurance and professional liability insurance with varying levels of coverage. Shop around to compare these options and make sure you understand each one’s limitations before purchasing a policy. Additionally, confirm that your insurer is properly licensed and forms part of an accredited risk management program. This can provide added protection in case of disputes or claims.
What Are Common Exclusions or Limitations With Your Policy?
Before buying a policy, understand the common exclusions and limitations for each type of coverage. Different insurer packages will have different ranges, and your premiums may be affected if you request higher limits than the package offers. Most policies exclude worker’s compensation and property damage from their coverage and do not offer protection in cases of fraud or simple errors in judgment while executing on projects. Depending on your specific policy, it might also exclude personal injury, contractual liability, bodily injury, employment-related disputes, pollution or environmental clean up costs. Be sure to read through the fine print before committing to a policy.
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