Contractors work in a sensitive line of duty where a small fault can lead to tremendous or permanent damage. Although contractors are professionals, they are humans who can make errors. Their tools, equipment, and machines can fail, and natural catastrophes can occur when they are on site. Due to these faults, contractors need a contractors liability insurance policy to protect them when such issues arise. Construction businesses are at high risk of being sued due to errors, accidents or events not in their control. Injury or damage lawsuits can attract large sums of money in the form of compensation. Furthermore, small or medium-sized businesses risk closing down. Their bigger counterparts can handle such claims, but an insurance policy can ensure their funds are channeled into other useful tasks. Insurance policies can save contractors from such difficult situations. Contractor insurance providers target carpenters, electricians, drywall contractors, general contractors, machinists, welders, fabricators, roofers, masonry & concrete professionals
1. General Liability Insurance (GLI)
This is a basic insurance policy that all professional in the construction industry should at least have. Many countries require all businesses to at least have this policy as it covers claims for injuries, property damages, and projects not satisfactorily completed.
The GL package consists of basic coverage which includes.
Medical Expenses – This is a cover that caters to medical expenses for a third party person. The contractor is not necessarily to be blamed for the accident, but the law requires the injured person to be compensated. The GL cover will save the contractor from servicing the claim which at times is not due to his/her faults.
Products-Completed Operations – A contractor may be sued for injuries to a third party resulted from their work. Errors occur, and construction can collapse and injure a person. The law requires the person to be compensated by the contractor on site and it will be a great loss if they have no insurance coverage.
Advertising and Personal Injury – A contractor can be sued from injuries inflicted on others due to their advert; compensations derived from copyright lawsuits will leave a non-insured company with a financial problem.
Bodily Injury Liability – GL insurance cover compensates a third party in case their client is sued for being the source of their injuries. A contractor may not be on site when the injuries happen, and the insurer will save the day. Apart from insurance settlements, The GL cover will pay for defense costs and judgments costs as awarded by the court.
Property Damage Liability – The GL cover pays for defense costs, judgments costs, and compensation claims when their client is sued of directly or indirectly damaging other person’s property.
2. Commercial Umbrella (CU)
Umbrella policies are necessary for when a contractor requires a higher protection limit than the one provided by the GL. The policy is affordable to most contractors and is more convenient as it accommodates any exposure subjected to them. A contractor who owns a small or medium company or one who operates as an individual is the one suited by this insurance policy. GU cover may not offer protection to an individual, their property and tools, equipment or machines. A CU policy will protect the contractor when accidents directly interfere with their operations.
The contractor should be keen to understand the policy terms to know to what extent they have covered as well as their property, tools, equipment, and machines.
Contractors Insurance policies are for all in the construction-related businesses. Contractors should at least get the insurance plans as required by the state they are in, and an additional policy plan is to their advantage. Honoring insurance premiums gives individuals or companies the peace of mind to concentrate on running their businesses as the insurer works to meet court demands.