It isn’t always easy for independent contractors and builders to discern the right insurance products you need for effective protection and risk management. The current housing market is smoking hot and the demand for new construction is high. This can be dangerous if you don’t have the proper liability coverage in place to protect yourself and the other protection for the people who work for you.
There are many different types of contractors. Each different type of contractor has different needs when it comes to getting insurance protection for your business. The first step is determining which type of construction professional you are. Then you can move on to determine the right type of insurance protection to meet your needs.
General contractors are responsible for the day-today oversight of a construction site. You may do some or all of the work or you may hire sub-contractors to complete the project.
Trade contractors include plumbers, carpenters, electricians, painters, etc. that may work independently or under a general contractor as a sub-contractor.
Repair people and generalists. You may not have specialized training in a single field but are knowledgeable in many.
Insurance is all about managing risks and minimizing your financial exposure for liability and other insurance problems. Depending on local laws, you may need additional liability protection as well as worker’s compensation insurance for the people who work for you. The bottom line is that there are a lot of moving parts on any construction project. Having the right liability protection and the proper amount of coverage offers you protection long after the project is complete.
Builders and contractors often have liability issues that come up years, even decades after the completion of their building projects. Because these liability issues are so complex and compounded by the age of the building project as well, the right liability protection can be essential for helping you to manage the costs of your legal representation as well as the costs of any judgments awarded against you or settlements you reach.
For contractors and builders alike, the odds are good that you will need multiple types of liability insurance protection, including one or more of the products listed below. Without the right types and amount of coverage, your business could suffer financially — even go under as the result of a single complaint filed against you. Here’s what you need to know to protect yourself.
Your general liability insurance typically offers two types of protection for your business.
Bodily Injury: Offers protection in the event that someone working for you or the work you do causes injury or death to a third party as your work commences. This protection provides for the medical care of the injured party as well as your legal defense if you are sued for damages.
Property Damage: Offers protection should someone you employ cause damage to the property of others in the course of your work. This includes the property on which you are currently working.
This is typically included within the general liability insurance and is critical protection for forward-thinking builders and construction contractors. It offers protection when completed projects have issues, injure others, or cause damage to the property of others.
Because contractors often hire subcontractors to complete specific components of a larger project, this liability insurance offers protection to you should a contract dispute arise.
Most contractors have General Liability but these policies exclude property damage to “your work” and “impaired property”. Errors & Omissions Coverage can fill that gap by covering potential liability exposures resulting from allegations of negligence and errors in your work.
Construction is a risky business. There is a lot that can go wrong. Having the right liability insurance as well as other insurance products for effective risk management can be the difference-maker for your business someday. Working with the knowledgeable team at Arnold Insurance can help you avoid critical coverage gaps that could cost you big if something ever goes wrong. Contact us today to learn more about your insurance coverage and protection needs.