Contractors Insurances From A to Z
Construction and contracting occupations involve some of the most diverse and risky work. Some contractors and construction businesses have storefronts that clients can visit, and if clients get hurt on the property, their medical bills could become the business’s responsibility. Others install drywall or kitchen cabinets in homes and could be held liable for the products that cause physical harm.
Contracting and construction business owners rely on General Liability Insurance to address these risks. This type of contractors insurance can offer lawsuit coverage for accidents, injuries, and some work mistakes. That protection can be invaluable in helping your small contracting business survive an otherwise expensive setback.
Let’s see how General Liability Insurance helps protect your business from events beyond your control.
Contractors Insurances – How General Liability Insurance Protects Contractors and Construction Businesses
Contractor liability insurance benefits your business in three ways:
- Asset protection. If a third party alleges your business caused bodily harm or property damage, and you don’t have General Liability coverage, you would have to pay for those damages out of pocket. As you can imagine, that can really hurt your bottom line.
- Survival plan when things go wrong. Accidents are unpredictable and happen to even the most careful business owners. General Liability coverage helps ensure you can handle these unexpected expenses without jeopardizing your ability to stay in business.
- Protection for your business and employees. With this coverage, you can carry out daily work knowing you and your employees are protected from uncertainty. General Liability coverage protects your business against claims brought against the company as a whole, as well as claims brought against individuals employed by the company.
This policy can cover the legal fees that can easily bankrupt a small contracting or construction business, such as attorney fees, witness fees, court expenses, and more. After a lawsuit, General Liability can be the difference between never opening your business doors again and weathering the storm still on your feet.
Contractors Insurances – General Liability Insurance for Contractors and Construction Businesses: Key Details
As you consider your coverage needs, it’s helpful to know the kind of claims General Liability Insurance safeguards your contracting or construction business against – and what it doesn’t. Take a look at the types of third-party claims typically covered by General Liability Insurance for contractors.
Bodily Injury Claims
As professionals in a labor-intensive industry, builders, and contractors know that no matter how careful a business is, accidents happen, especially when untrained visitors enter a worksite. With General Liability Insurance, though, you have the protection your small contracting business requires against these all-too-common accidents and lawsuits.
If someone is injured on your business premises (like your office or showroom), this policy may pay for the third party’s ongoing medical expenses and court-awarded compensation. While General Liability covers injury-related expenses for third parties, your own employees’ on-the-job injuries are not covered under this policy. For that protection, consider purchasing Workers’ Compensation Insurance as well.
Property Damage Claims
General Liability Insurance helps protect your contracting or construction business against the high cost of a lawsuit if someone alleges that your business damaged their property. For contractors who work in remodeling, it’s important to note that property damage liability coverage typically does not cover damage caused to client property you are working on.
Completed Products Claims
General Liability Insurance can help pay for claims related to services you’ve completed and products you’ve produced. So if, for example, your business inadvertently installs kitchen cabinetry with unstable shelving that ends up injuring the homeowner, your contracting company could be found liable for the injury. With the proper coverage, however, your legal expenses and damages can be covered up to your policy limits.
Faulty Workmanship Claims
Some General Liability policies include Faulty Workmanship coverage (also called Contractors Errors and Omissions Insurance). Depending on your industry, you may need this coverage to address claims over negligent work. For example, this part of your policy may cover lawsuits that allege you didn’t complete the project on time or went over budget. This protection isn’t included in all General Liability policies, so talk to your agent to see if it’s is available and appropriate for your line of work.
Personal and Advertising Injury Claims
If you advertise for your contracting or construction business, you may want to consider a General Liability policy that covers libel, slander, privacy invasion, and copyright infringement. These mistakes are especially easy to make when you advertise on social media and don’t have much time to spend on compliance research.
Immediate Medical Expense Claims
This part of your General Liability policy can kick in as soon as a visitor or client is injured on your property. If they require immediate medical attention, your policy may help cover that cost. From an insurance standpoint, it’s better to compensate for immediate medical costs, such as a trip to the ER, rather than risk the lawsuit for not attending to the situation right away.
Contractors Insurances – When Do Contractors Need General Liability Insurance?
You may need General Liability Insurance if you…
- Work with clients who require this coverage. Most clients want some proof of liability coverage before you begin work on a project. That way, they have assurance that if your work causes physical harm, they can recoup their losses.
- Offer design-build services. Offering more services in house means you take on additional risks. If you’re sued over professional mistakes in your design work, you likely need Faulty Workmanship coverage. It’s the part of a General Liability policy that can address financial losses your work causes clients or business partners.
- Are hired by a general contractor as part of a larger project. General contractors often require subcontractors to carry their own insurance to address potential issues with their work.
This list isn’t exhaustive. When in doubt, show your insurance agent your client contract and describe your services. They can help you figure out what coverage you need to fulfill your obligations and appropriately protect your business.
Protect Your Construction or Contracting Business
Don’t leave your contracting business vulnerable to chance. Contact an AmeriAgency agent today, and one of our licensed agents can help ensure your contracting or construction business has the protection it needs to land new contracts and thrive.