General Liability Insurance for Contractors

Are you a contractor, tradesman, or subcontractor looking for General Liability Insurance? If yes, you’re looking at the right website. We are going to talk about the comprehensive coverages of General Liability Insurance.

All things considered, there is a high risk of property damage and bodily injury on the path of your work. To be sure that your company is under security from liability because of these accidental hazards, have General Liability Insurance.

What is General Liability Insurance?

General Liability Insurance, also called Commercial General Liability Insurance, brings forth financial protection in many cases. Wherein your company harms a third party by accident or their property. It is a mandatory tool for small companies to global corporations.
It offers solutions to the problems of businesses that compensation and legal fees charge due to hazards. Suppose someone files a lawsuit against your company because of a cause that your insurance covers.
In this case, General Liability Insurance will recompense legal defense, settlements, and judgments against your business until the policy limit. It is essential for contractors because of unavoidable risks in their work to people’s property.

CALIFORNIA GENERAL LIABILITY INSURANCE COVERAGE

Bodily injury coverage saves your business if it causes another person’s injuries, except for a worker’s injury, which workers compensation insurance will cover.

For example, if one of your workers leaves his tools behind by accident at a customer’s house. The homeowner slips on the tools, and for this reason, it results in injury and expensive medical bills—also financial loss from not being able to go to work. The homeowner sues your company for the negligence of your worker.
Property damage insurance covers damages when your business causes damage to other people’s property, except for the property that belongs to others’ under your possession, custody, or authority. For example, a customer assigning you to remodel his living room, which an additional endorsement covers, namely voluntary property damage insurance. Property damage coverage will cover unintentional damage to a third party’s property while that property is under your supervision.

For example, one of your employees drops a screwdriver while repairing the ceiling and breaks a luxurious glass table. The customer sues your business for the expenses to replace the table and repair the floor tile.
Products and completed operations coverage are for protection after duty in the workplace. If you finish your work and it causes property damage or bodily injury, your business can still be liable. There is an essential restriction of products and completed operations insurance. That is only if the coverage you will receive from your General Liability Insurance is active when the hazard happens.

To demonstrate, when installing a drawer, your worker fails to secure one of the drawer attachments on the wall properly. The drawer for a while works okay. A month after installation, the drawer falls off, causing injury to a vice president and damaging your floor tile. The vice president sues your company for liability of bodily harm.
Personal and advertising injury covers non-physical injuries that your business can cause to third-parties or companies. Contracting companies may consider this hazard common as libel, slander, copyright, publications, violation of privacy, and infringement in advertising.

Medical expense coverage is a kind of policy that supplies medical remittance when someone sustains an injury in your workplace. In particular, the activities of your company. Not like bodily injury coverage, which pays only if your company can prove you guilty. Medical expense provides coverage to third-parties to recompense accidents whether your company is at fault or not.
Is General Liability Insurance a requirement?
General Liability Insurance is not a legal requirement in most matters. In some areas, General Liability Insurance is a requirement to have a license for several professional contractors. Such as electricians and plumbers, whereas some states may consider surety bonds to have a license.
It’s common for customers to require General Liability Insurance before they involve themselves in business with a builder. If a customer hires a contractor and a disaster happens, the customer may cover for damages, instead of the contractor who doesn’t have insurance. In that case, a lot of customers will require General Liability Insurance before employing your business.
Likewise, if your company works as a subcontractor to a general contractor, the general contractor can require you to have General Liability Insurance as well. It’s because the general contractor will sustain liability that their subcontractors’ accidents will cause.
General Liability Insurance Cost
The contractor’s General Liability Insurance average cost is around $1,000 yearly. It will depend on small companies with $500,000 and below their sales per year. Specifically, it’s essential to often take note of the increase of General Liability Insurance costs proportionately to revenue. Moreover, some kinds of contractors, such as roofing or general contractors, have higher risks. You can also consider exposures as high risks that can have two to three times the premium average cost or even more. Below are the types of risks your company encounters, depending on the costs of General Liability Insurance :
  • The size of the business
  • Location
  • Industry
  • Amount of workers
  • History claims
General Liability Insurance Premiums
Companies with higher risks will have higher premiums when you compare it to those that deem lower risk. For example, a circus will have higher liability premiums when comparing it to a graphic design company. Premiums rise as insurance limits increase. Different insurance businesses have different rating risk frameworks. Henceforth, comparing prices between different insurers is worth it.
For most small companies, $1 million per phenomenon and $2 million limit aggregate is appropriate in Commercial General Liability Insurance. Coupled with liability, providing strong security for your business is suitable for a commercial umbrella policy. That’s how much General Liability Insurance you need.
Below are the other types of policies that you can consider. For this reason, General Liability Insurance covers only the necessary contracting risks and constructions.
To cover medical bills of employees who sustain injuries in the workplace. It is a requirement for most states.
Covers vehicles to contracting or construction businesses. It usually covers damages and accidents due to robbery, vandalism, and bad weather.
Covers replacement or repairs of equipment and contractors’ equipment if they sustain damage, loss, or stolen.
In case a contractor passes a deadline for a project, he’ll benefit from coverage for professional oversights and mistakes.
Builder’s Risk Insurance covers ongoing damages under construction due to vandalism or fire on the construction workplace. In other words, damages happening during construction.
Overall, contracting and construction work is a job that cannot avoid risks. Accidents that cause injury to third parties to misfortunes that damage the properties of others. Such as property damage, bodily injury, advertising claims, and legal expenses.
General Liability Insurance provides the security that you need. Defense against other people’s claims of property damage, advertising, and personal injury. Accidents may happen even at a very unexpecting time. General Liability Insurance is a critical investment coverage because it ensures securing your business for its future. It is wise to get accurate pricing estimation from reputable insurance by getting a quote.