What Kind of Insurance Should General Contractors Have ?
Liability issues are known to pop up when you’re least expecting them. Since there is a lot on the plate of general contractors, they usually oversee the coverages when signing an insurance policy. This combined with challenges, risks, and construction complications can stretch the already thin resources and cause general contractors to close their doors.
If you’re running a general contracting business, you should do everything in your power to protect your company’s interest, your employees, and your clients as well. Here are the most common types of insurance policies general contractors invest in:
Commercial General Liability
This insurance policy provides base coverage. It protects you from incidents that are related to events that happen on the construction site, your products and services, and independent contractors.
For instance, a commercial general liability policy can protect you from claims of alleged property mismanagement on the job site or bodily harm. This policy protects you from liability if one of your suppliers or contractors engages in misconduct or files a claim once you have completed your project on the site.
Professional liability will protect you from unhappy customers. For instance, if one of your employees does something that damages your customer in any way and that customer decides to sue you, professional liability insurance will get you covered. It is also known as Errors and Omissions coverage.
Commercial Auto Insurance
If you have a fleet of vehicles, it is a smart decision to insure them. Commercial auto insurance will protect all vehicles that you use for business purposes.
An excess liability insurance policy extends coverage of one policy in your insurance portfolio. You can decide which one to tie it to. You should assess all the risks and use excess liability coverage on the policy you are most likely to use.
The umbrella insurance policy is basically the same as excess liability, except you can tie to as many individual policies in your overall insurance portfolio as you want. If your risk assessment tells you that you need to extend the coverage on more than one underlying policy, umbrella insurance is a better option than the excess liability policy.
If your client requires you to state the deadline of your project and wants you to stick to the terms listed in the contract you have to protect your business. If something goes wrong, you will have to pay severe penalties. The bond insurance policy replaces you and your business can continue as usual.
Worker’s Compensation Insurance
You have to assess the risks your workers face on a day to day bases. If they get injured on the job, they will lose wages and will have to pay for medical bills. You will have to pay for this out of your company’s budget. Worker’s compensation insurance covers all these expenses.
The inland marine insurance policy covers damages materials, supplies, and tools sustain when transported from site to site.
The risks builders face are natural disasters, fire, and theft. This policy will cover expenses related to these risks if the incidents occur when you are working on a project.
Each one of these 9 insurance policies covers a specific aspect of general contractors business. They are designed to protect your contractor business and minimize the risk of having to shut the doors.
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