Contractor Liability Insurance: Why You Should Never Go Without

As a contractor, it is important to have the proper contractor liability insurance. Contractor liability insurance was designed to protect a contractor against legal claims. Some of the items that are covered are personal injury, property damage, or negligence. In most states, contractors can bid for commercial or residential work without contractor liability insurance, however, the work can not be performed without it. The amount of insurance you will need as a contractor will vary based on the work you will be doing, among other factors.

The Responsibility of the Contractor

If you are a general contractor, it is important to make sure all your subcontractors are covered by a general liability insurance policy. Your insurance premium will drop significantly if you ensure that all others are also covered. As a business owner, it is your responsibility to reduce your own risk of being held liable in the event a job does not go exactly as planned or in the case of accident.

The Cost of the Insurance

The cost of general contractor liability insurance will depend on the liability coverages you choose for your policy. As with automobile insurance, a premium must be made and subsequent monthly installment payments are arranged to follow. If you are concerned about whether or not it will cost too much, obtain insurance premium quotes from many different insurance companies before you decide to purchase a general contractor liability insurance policy.  Compare your quotes and insurance coverage amounts to review the overall picture.

Review the Terms

Checking on the terms and conditions of a variety of insurance carriers will help you choose the right policy.  Also, by comparing policies and asking questions, you can gain a better understanding of your specific contract needs. Make sure you read the fine print and understand any exclusions on your policy. It is the responsibility of the general contractor on any job to ensure that the subcontractors working on-site are also covered by general contractor liability insurance in order to protect all parties involved.

A smart strategy to find a solid insurance policy is to compare at several insurance companies and ask other contractors in your industry which insurance carrier’s they have used. You should research the ratings of insurance companies you are interest in using because all insurance carriers are not equal.

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