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.
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 :