The market has a wide range of insurance packages for contractors and figuring out what to look for while choosing an insurance policy can be a hard task. Given the industry that contractors work in, several elements of the work expose them to numerous liabilities.
Whether it’s a small, medium-sized, or a large company, contracting involves exposing employees to hazardous work, which requires the business to protect itself against liabilities. The equipment contractors use also needs to be insured.
Different industries have specific insurance needs, but there are common general contractor insurance areas that every contractor should pay attention to keenly.
Every general contractor needs to have an insurance policy, and here are a few things that you, as a contractor, need to know about the general contractors’ insurance.
A contractor is only human; therefore, mistakes can happen on the job. For example, a painter who has been contracted by a client could spill paint on an expensive carpet. If the client demands payment over the damages, a general liability policy should cover such claims.
The general liability policy also covers third-parties. Third-party claims can cause severe financial implications to a business, depending on the claim. In some contracts, body injuries may happen to third parties. General liability insurance will cover these medical bills.
Anything could happen to your tools of work. You could lose your materials for the job in your storage facility as a result of theft or fire. Transporting your tools of trade to the workplace could also result in damages and loss. If such a loss occurs, then your business suffers a setback. By getting insurance coverage for your tools, you will be spared from covering these costs.
If the company owns a vehicle(s), they should have a comprehensive insurance cover that protects the business against liabilities. You require a non-owned auto policy for your employees in case they get into an accident while on the job.
Typically, most general contracts demand that the contractor has liability insurance, and the policy should name the owner as an additional insured. Subcontractors also require that the general contractor be named as an additional insured.
This additional insured clause of the policy on a general contractor’s insurance ensures that if a third-party claim arises from the subcontractor’s work, then the general contractor can claim the subcontractor’s policy.
A general contractor must ensure that the additional insured is part of the insurance policy that they purchase.
The size and kind of contractor work that you engage in determine your insurance needs. General contractor’s insurance coverage protects a company from a financial loss or crisis brought about by legal claims. Insurance also allows the contractor to conduct business because some clients don’t work with contractors who don’t have an insurance policy.
Besides the financial gains that comprehensive insurance cover gives the contractor, it also assures your employees that you can take care of them in case of an injury on the job. Having a policy that works gives you peace of mind, and you can focus on other areas of growth in the business.