Estimated reading time: 6 minutes
- What Is General Liability Insurance And Why Do Contractors Need It?
- How Much Coverage Do You Need As A Contractor?
- What Does General Liability Insurance Cover?
- How Much Does General Liability Insurance Cost For Contractors?
- How To Get The Best Deal On General Liability Insurance For Your Contracting Business
- The Final Verdict – General Liability Insurance For Contractors
As a contractor, having the right insurance is important to protect your business. With that in mind, what kind of insurance do you need? General liability insurance is a must for any contractor, and in this blog post, we’ll explain why.
In this article, we will learn about contractors’ general liability insurance, what it covers, how much it costs, and how to get a quote.
What Is General Liability Insurance And Why Do Contractors Need It?
General liability insurance is an important type of insurance for contractors.
A properly structured coverage plan can help protect against a wide variety of potential risks and liabilities, such as injury to others or damage to property caused by contractor operations or products.
Having contractor general liability coverage can provide economic protection in the event of legal action that may arise from injuries, incidents, or accidents related to a contractor’s services.
It is highly recommended that contractors secure this type of insurance policy before starting a job, as it can help mitigate the risk of lawsuits and other financial hardships associated with consequential damages that may occur due to contracting work.
How Much Coverage Do You Need As A Contractor?
A General Contractor, Construction Business, or other small businesses that hire sub-contractors will require contractor insurance with Per Occurrence Liability Limits of $1 Million and General Aggregate Liability Coverage of $2 Million.
Construction Companies That Should Carry $1 Million Liability Coverage
- Plumbing Contractor (Plumbers)
- Electrical Contractor (Electricians)
- Heating & Air Contractor (HVAC)
- Painting Contractor (Painter)
- Carpentry Contractor (Carpenters)
- Flooring Contractor
- Roofing Contractor (Roofers)
When deciding how much liability coverage your business needs, a number of factors should be taken into account. However, the main factor should be the size and scope of the projects you work on.
Example: If you are an Electrician and are doing a $40,000 renovation project for a home that is valued at $1.5 Million Dollars, you should make sure that your construction insurance is at least $1.5 Million.
Why? Although your revenue on the project is only $40,000, if an accident occurred that could be linked to you or your operations at the home, that caused the home to burn down…you would be responsible for the costs associated with the property damage of $1.5 Million.
Ultimately, contractors need to decide which type of coverage is best suited to their individual needs – but contractors general liability insurance is a must-have for contractors looking to add an extra layer of security against accidents and damages.
What Does General Liability Insurance Cover?
General liability insurance is an essential form of protection for contractors and other businesses. It provides financial protection in the event that a business is held legally responsible for bodily injury, property damage, medical payments, or personal injuries caused to another party.
The coverage typically extends to any legal fees associated with defending the claim and settlement costs if the suit finds in favor of the party filing the claim.
In some cases, contractors’ general liability policies have been endorsed to provide additional coverage related to:
- Faulty Workmanship (Contractor’s Errors And Ommissions)
- Products And Completed Operations
- Ongoing Operations
- Personal And Advertising Injury
- Additional Insured Status
- Waiver Of Subrogation
No matter what type of trade contractors are engaged in, they should be sure to take out a contractor’s general liability policy to protect their business interests.
How Much Does General Liability Insurance Cost For Contractors?
Contractor’s General Liability Insurance typically costs between $500 and $2,400 a year ($40 a month – $200 a month).
The cost of contractors’ business liability insurance depends on several factors:
- Contractor’s Experience
- Scope Of Work
- Additional Coverages Required
- Limits Of Liability
Construction Businesses should always consult with an Independent Insurance Agent that specializes in Contractors Insurance. A local insurance agent has access to multiple insurance carriers, but can also help you find ways to reduce your Total Cost Of Risk.
Discounts Available To Contractors
|Discount Type||Discount Description|
|Multi-Policy Discount | Bundling Discount||Many insurance companies offer discounts for contractors who bundle their liability policies with other forms of insurance such as Worker’s compensation, commercial auto, property, and any specialized coverage. Bundling multiple policies with one carrier can save up to 15|
|Loss Free Discount||Insurance Carrier typically provide larger discounts for businesses that have little to no claims|
|Formalized Safety & Loss Control||Insurance Companies recognize that small businesses that have formal safety and loss control programs have less losses and should have lower premiums|
How To Get The Best Deal On General Liability Insurance For Your Contracting Business
As contractors, liability insurance coverage is essential for protecting your business.
Finding the best deal on contractors’ insurance can be a challenge. The key to getting the best deal is to work with an independent insurance agent that can compare coverage and pricing from several different carriers.
Make sure to review the construction contracts you have. Often, general contractors have stringent requirements of their subcontractors. Depending upon the types of insurance requirements, certain carriers may not be able to provide your construction business with the coverages that are required.
While insurance pricing may be important, if you purchase a cheap policy that doesn’t provide the coverages you need to do jobs for your contractors, your revenue and reputation will take a hit.
Always looks for an insurance agent that has access to insurance carriers that specialize in construction insurance.
With thoughtful research and informed decisions, contractors can feel secure in knowing that they have secured the best deal on contractors’ general liability insurance for their businesses.
The Final Verdict – General Liability Insurance For Contractors
General liability insurance is an important type of insurance for contractors to have.
It provides protection in the event that someone is injured or their property is damaged as a result of your work. The amount of coverage you need will vary based on the size and scope of your business, but it’s important to make sure you have enough to cover any potential claims.
General liability insurance typically covers medical expenses, legal fees, and damages awarded to the plaintiff. It can also help protect your business from bankruptcy if you are sued and found liable for damages.
Because every business is different, there is no one-size-fits-all answer when it comes to how much general liability insurance costs for contractors.
However, there are some ways you can get the best deal on coverage for your business. By working with an independent insurance agency that specializes in construction insurance, you can be sure you’re getting the most bang for your buck.
Lastly, be sure to read through all the fine print before buying a policy so that you know exactly what’s covered. Do you have more questions about general liability insurance for contractors, reach out to an ALLCHOICE Insurance Advisor today.